A curious question to the Devs: Viability of the PoE Business Model?

Dear developers,

This is really not to critically attack your business model - but merely meant as a curious question as to how a game like this secures a proper cost/benefit model.

I myself, work as a project manager, which might be where my curiosity comes from.. but I can't help wonder how companies like your own, secures funding to spend 5 years in development with a team of (now 16-17?), and the culmination of the completion is to launch a completely free game, which only has the income based of the few supportive/donations for the beta access, and then ethical micro-transactions.

For me - Who admittedly don't know much about game development - that seems like a very unlikely scenario to create a surplus in the other end.

So - I was wondering if you could share some more details on your funding approach and business model with those of us who might also have an interest in this.

Best regards,
Allan - aka Raam.
Denmark

Its the same principals as green companies work under. They are restricting some of their profit potential in the hopes that people respect that and will donate some excess income.

Its not that complicated even if you doubt whether its viable.

Currently, there are around 60 Diamond Supporters. Several of those have paid more than Diamond status alone.
There are at least 2000 people playing at any given time now, many of who "bought in" by paying $10, or someone paid on their behalf. Of those, a good number are higher supporters, including quite a few gold and silver supporters at any one time. Assuming it follows a normal distribution, you can guess that there are more Gold than Diamond, more Silver than Gold, and there are *definitely* more Bronze than Silver... and further down the line.

GGG has made over $800,000 USD from this game before the game has even reached *open* beta. Clearly there is enough interest in the design that the business model is succeeding.

And in a capitalist structure (like the internet is, by and large), interest and business model make or break a product. People like GGG's game because of the quality and care put into it; it garners interest. GGG does not allow the game to become Pay2Win; people like GGG's business model. The game becomes successful.

I too don't understand how the business model is profitable. The game is free to download and there's no monthly subscription. There are no ads on this website or in the game. Since this is not a pay-to-win game and the micro-transactions are only for cosmetic purposes that won't generate much revenue. At least with other free games on facebook or the iphone, there are ads that generate $1/user per year and multiply that with 100+ million players and that's 100M+ in revenue. If Path of Exile is a commercial success it'll top out at 1M active players which may not cover the costs of a 20 person company.

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Caliboy wrote:

I too don't understand how the business model is profitable. The game is free to download and there's no monthly subscription. There are no ads on this website or in the game. Since this is not a pay-to-win game and the micro-transactions are only for cosmetic purposes that won't generate much revenue. At least with other free games on facebook or the iphone, there are ads that generate $1/user per year and multiply that with 100+ million players and that's 100M+ in revenue. If Path of Exile is a commercial success it'll top out at 1M active players which may not cover the costs of a 20 person company.

Trust me, people buy heaps of cosmetics. Look at Dota 2 or TF2, how many crates are opened just to find a hat with a glow effect? People are willing to spend hundreds on unusuals, and they certainly don't affect gameplay. In games such as LoL, every game I play has at least two or more skins, commonly going up to 5-8.

I have my doubts as well.

I do not doubt that PoE will be a crashing success. That's not the point, although if the number of 'freeloaders' far exceeds the number of supporters, then 'crashing' might be the perfect term for it.

And I think it'd be naive to believe that the devs haven't had stronger doubts than any of us -- their future is on the line here, not ours. So while I can appreciate some people asking directly, 'how will you make this work?', I think that it'd be very poor business sense for GGG to answer just as directly.

All I have to work with is the evidence at hand, and others have sufficiently provided that.

Probably the most important fact we have right now is that there's no real obligation to 'buy in' -- if you choose to support, that's awesome; if not, you can still reap the benefits once this game goes Open.

Or watch as it burns to the ground.

The point being, I don't think anyone should be quite so concerned with how Path of Exile will do financially as those who made it and invested their life's savings into it.

And that's not us. We'll be fine either way, compared to them. Either we get an awesome new ARPG to enjoy, for free or otherwise, or it's Flagship 2.0 and we move on to whatever else there is, and there'll always be Something Else To Move Onto.

...I've resisted responding to this thread since first seeing it for precisely this reason: it's a good question...hypothetically.

The model has been notably successful with Team Fortress 2, League of Legends, and less, but still notably successful, with games like Lord of the Rings Online and Company of Heroes.

GGG has been paying for 10-18 employees full time for several years making this game. I can assure you, that while an up-front $20 price tag for this game would net GGG a substantial profit, microtransactions will bring in substantially more money over time.

The standard business model of purchasing a game for a flat sum is defunct in many cases now. Games as a service and not as a product, are what big major corporations are trying to do or already done with Call of Duty Elite, and World of Warcraft.

The major difference here - is that you cannot become Call of Duty or World of Warcraft just by making an FPS or an MMO, so it is much more easy to make a free to play game, reducing the barrier of entry and allowing for stronger market penetration.

Compare Heroes of Newerth (only successful enough for the company that made it to keep running) and League of Legends (too successful for its own good). Compare HoN charging $10-30 for its game at various points in its first year, to League of Legends, which has always been free.

Also, I do not think there is such a thing as a "freeloader" in a massively multiplayer game. ALthough bandwidth might be outrageous in New Zealand, it's cheap everywhere else -- GGG can make substantial profits, and continue to update the game, with at least 90% of the population being a "freeloader" - and that will be fine. Great for them, honestly.

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anubite wrote:

Also, I do not think there is such a thing as a "freeloader" in a massively multiplayer game. ALthough bandwidth might be outrageous in New Zealand, it's cheap everywhere else -- GGG can make substantial profits, and continue to update the game, with at least 90% of the population being a "freeloader" - and that will be fine. Great for them, honestly.

Fair enough. I'm not entirely convinced that PoE is a 'massively multiplayer' game in most respects, but given that it's mostly about instances, I wonder if that's easier or harder on the server load compared to a large, persistent open world. That query is earnest: I really don't know. :)

And yes, naturally I agree with your last sentiment, given that I'm a very avid member of that remaining 10%. ;)

I think it will work with the following

1) People who are willing to pay them for their great game even without the need of visual options.

2) Continuing new options to buy (pets, leagues)

3) Growing game (acts, instances, loot, leagues) --> leading to the "need" of more charater slots and such.

4) Micro transactions which need monthly refreshments (guilds?)

just my thoughts ^^

Dennis

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Daijanus wrote:

4) Micro transactions which need monthly refreshments (guilds?)

Likely guilds and, more PoE-centric, custom league hire. That's where I'll be 'monthly-subscribing', as it were.