Microtransactions “Way of the Future”?

Microtransactions "Way of the Future"?

Although new to the microtransaction scene, Petroglyph is optimistic that the free-to-play business model, in some shape or form, is part of the future of the games industry.

Petroglyph’s upcoming free-to-play action strategy RPG Mytheon is unique in that it comes from a developer with a history of traditional boxed products like Star Wars: Empire at War and Universe at War. Chuck Kroegel, general manager at Petroglyph and producer for Mytheon made the argument for microtransactions, a business model that is still largely unproven in Western territories.

Petroglyph has always been a company that does the triple-A, boxed, traditionally-distributed games. Why have you decided to go with the free-to-play model? Is this some kind of experiment? How deep does this go?

This is a serious commitment on our part. We’re really excited about this game that we’ve been developing over the last months here. It’s not the only project we’re working on. But we find it intriguing because we do feel that there is a notion of how this could be the way of the future. And if not, it’s certainly going to be part of the future. It may not be the only way things are done in regards to the model, but right now it looks to be viable.

The thing that’s most intriguing to us is the notion of a real-time relationship with your audience. The game is set up so it’s a living game. It’s where your financial model is based on what the customers want, what they’re interested in, so you’re geared to provide that to them. To me, it’s a model that really gets us closer to the end user, and that’s the way things need to be in the future, online.

People are looking for an immediate response to their needs, and that’s hard to accomplish with a boxed product. Yes, you can do expansions and sequels, but that’s not as immediate as the microtransaction model. And with the RTS genre, clearly, Blizzard has done well with the StarCraft and Warcraft series where they constantly update their games and kept their audiences very in tune with what’s going on. This microtransaction model is sort of an evolved way of doing that.

But the difference with what online companies like Blizzard and Valve do with their games is outside of paid expansions, they do the incremental updates for free [or at least the cost is absorbed by regular subscription fees - ed].

That’s correct. That’s a basic level that shows how people are attracted to [regular updates]. But I’m not so sure that’s as rewarding to the publisher, Valve or Blizzard. They have a following and their model has paid off for them. With the microtransaction model though, the notion, as far as we’re concerned, is what you normally get in an expansion, we’d still give you for free. We’d give you new lands and areas for free. The microtransaction part really has to do with other things that are associated with gameplay. … We want everybody [including non-paying players] to go where anybody else can go and not have to pay to get there. But people are willing to pay for vanity items and the like.

The whole pay-as-you-go model that lets you add on options to a product is a marketing mechanism that’s been around for a long time, it’s just a matter of applying it to the online arena.

The difference is that [Blizzard and Valve] provide their incrementals for free, and we plan to do the same. But it’s the different things that we would charge for. And quite frankly, in other MMOs out there, people do buy things and broker things between each other. They go to farmers for gold and things like that. There’s a great demand for products and services to enhance gameplay. To me, this microtransaction model is a way to address what already appears to be a need.