Thursday, June 30, 2011

My monocle theory

You might have noticed that my blog post on the monocle affair was extremely short. That was a typical case where I didn't say everything I had to say because of the obvious possibility that the combination of two very contentious subjects, EVE and RMT, would result in a flame war in the comment section. Now with comments turned off, I can say what I believe happened. I think that the EVE item shop is not a sudden decision, but a natural result from previous decisions by CCP on RMT.

In my opinion the whole story started years ago, when CCP introduced their PLEX RMT. For the players the PLEX system looks like an indirect way to buy any item in the game with cash: You buy a PLEX from CCP, exchange that PLEX for ISK in game, and buy whatever you want with the ISK. The obvious advantage is that the players who buy virtual goods for real cash this way support the in-game economy.

So does this make the PLEX system the ideal RMT system? Well, not from the point of view of the company: The PLEX system has the curious effect that regardless of how many players engage in RMT, CCP doesn't make any more money from their game than if they had no RMT at all. All they actually sell is subscriptions in advance. That increases the short term cash flow, but in the long term they still only make as much money as they would have with a regular subscription system. Originally there was no way for PLEX to disappear from the economy except for somebody paying his subscription with one. The more PLEX accumulate in game, the less likely it becomes that somebody pays for his subscription with cash. It's a bit like a mortgage: Get money now, but the obligation sticks with you for a long time. A PLEX is basically an IOU from CCP.

For CCP to make money, the PLEX had to be removed from the in-game economy. Their first attempt at that was making them destructible. That obviously wasn't a very reliable method of removing PLEX, and it tended to very much upset the player who got shot down with over $1,000 dollars worth of PLEX in his cargo hold.

So what CCP needed was a way for players to voluntarily destroy their PLEX. And that is where the item shop and the monocle come into play. The fundamental feature of EVE's new item shop is not that you can buy a monocle for $68. It is that to pay for items from the shop, you need to destroy PLEX by turning them into Aurum. Every PLEX destroyed means somebody at some point will have to pay for his subscription instead of using that PLEX.

I think that the plan in itself is a good one. What CCP failed at was the implementation. On the one side the vanity items are overpriced, on the other side they don't fulfill the most basic function of a vanity item: Showing off in front of other players. Nobody but you can see your avatar running around in the space station, so it doesn't really matter what he wears.

According to the leaked memo from CCP the next step will be selling items with some use in game for Aurum, like ships or modules. From the point of view of the buyer, that doesn't change much: Instead of exchanging PLEX for ISK and then the item you want, you now exchange PLEX for Aurum and then the item you want. From the point of view of CCP that is a huge difference: Any item bought via Aurum is an actual income for the company. CCP will finally be able to financially profit from the RMT they had going on already for a long time.

So why the outrage? Well, money tends to be a zero-sum game. If CCP gains more money from their RMT, somebody else has to be on the losing end. In this case the people who lose are those who used to pay for their subscription with PLEX they bought with ISK they earned in game, effectively the "Free2Play" players of EVE. Remove a lot of PLEX from the game, and their price in ISK goes up. It will become more difficult to finance your EVE subscription strictly through ISK earned in game.

Is that the end of EVE? Not bloody likely. As Raph Koster once pointed out, every MMORPG has the same shape of curve of subscriber numbers over time. Just the height of the peak and the width of the timescale changes. It is likely that EVE has peaked, and will now begin a slow decline, just like it is likely that WoW is now on the decline. But for games who took years to peak, it will also take years to decline. And it is rather common for companies with a product that already paid off its development cost and is slowly declining to milk that cash cow to the maximum. It isn't the milking that causes the decline, but the decline that causes the milking. The fans would like EVE to be a special snowflake, but in the end CCP is a company like any other and has to make money.

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