The virtual goods business model is much older than most people think– certainly much older than this blog. Neopets helped take the model big in 1999. Now Neopets founders Adam and Donna Powell are now making the move into social gaming with their new venture, Meteor Games.
Meteor Games's first big project, the Facebook and browser RPG Vikings
Pirates Ninjas (VPN), does not currently have an in-game item shop where
users can spend money on virtual goods… but it will soon. The design
process is ongoing with a launch scheduled to take place at an
indeterminate time later this year.
Current Meteor Games VP of Business Development David Kaye also comes from a virtual goods background, launching a text-based MUD company called Iron Realms Entertainment in 1996 that monetized through what would now be called microtransactions. Another Iron Realms founder, Matt Mihaly, is currently CEO of Sparkplay Media. Iron Realms Entertainment is still successfully in business.
VPN's item shop is very important to the game's future. The project was designed to monetize purely through virtual goods, though Kaye mentions that VIP subscriber content may be possible on down the line. Meteor Games is expecting conversion rates of around 5% when the item shop is launched, which Kaye says is more than enough to make a game profitable.
Because VPN was conceived as a microtransaction game, Meteor already has a clear idea of what kind of virtual items they want to sell. Kaye specifies that Meteor isn't
planning on selling "power items," things users can buy to advance in
the game more quickly. Instead Meteor's focus will be luxury items,
like more clothing options for customizing your avatar and virtual pets
whose role in the game will slowly expand over time. Meteor also plans
to offer a very lucrative type of convenience item.
successful casual free-to-play MMORPGs, VPN gameplay is designed around
a point-based "energy" mechanic that essentially limits how many
actions your character can take before he or she is tired. Once tired
out, a player has to wait through a cooldown period before gaining more
energy points to spend. When the VPN item shop goes live, players will
be able to buy items that restore energy instantly. It's a perfect
impulse buy for a really engaged player who desperately needs to see
what happens next.
Kaye notes that power items might become part of VPN down the line, but right now Meteor wants to be very careful about establishing VPN's in-game balance. A big part of VPN's planned viability as a virtual goods platform is going to be tied into the perceived quality of the game. VPN wants to build up positive buzz and expand the playerbase. Kaye firmly believes that long-term success comes from building up a game that is appealing on its own gameplay merits.
"I think there's a huge amount of buzz right now around some of these
social gaming companies, it's amazing the scale of the audiences being reached
on those social networks, but I think it's fair to say that there's
been more of a focus on the marketing aspects and conversion rates and
that sort of thing and less focus on the actual content. There's only
so far that can take you," said Kaye. "Our focus is overwhelmingly on producing the best possible experience for people. My experience is that when you focus on that everything else tends to sort itself out."
Building For Sustainability
As a result of Meteor's interest in building up a reputation for
good community and solid gameplay, Kaye mentions that Meteor is very
selective about how they're promoting the title. What is clearly
desired is word of mouth. While you can opt to invite friends to play
through the Facebook version of the app, VPN doesn't require you to do
so as a core game mechanic.
Many other social network games do
require this, some even locking away game content or tying in-game
advancement to how many friends you can recruit. While these kinds of
game mechanics do ensure rapid virality, Kaye sees a downside to their
strongarm method of player recruitment.
"It would be silly to
ignore the interesting and novel techniques being used to drive user
acquisition and there's nothing inherently wrong with making use of
them. But the danger is that you end up building a game that is
essentially a kind of engine to grind through people as quickly as
possible. I'm not sure that's really necessarily the best approach,"
While users can gain virtual currency now
through gameplay, Meteor plans to launch a second RMT currency for use
in the item shop. Users can now sell items earned through gameplay to
each other, but it's undecided as to whether VPN will have its own
secondary item market for virtual goods purchased with real money. Kaye
has plenty of good things to say about secondary markets in MMORPGs,
but notes that a focus on a secondary market that involves real money
in any way makes managing a game's economy more difficult.
VPN is Meteor's first project but not the only one it currently has in the works. Two more games that will probably have virtual goods components, the horror-themed Bitten and fantasy-themed Twin Skies, are in the works. Kaye also mentions that Meteor is at work on a game that would be able to support branded virtual goods as part of its gameplay, though the project is so early in its development cycle that he can't even name it at this point.
Social games are still an emergent space, so it's doubtful that many of the start-ups jumping into it now are really thinking about what their business will be doing in five or even ten years. A studio of veterans like Meteor Games has clearly considered the value of long-term player commitment to a game that is going to monetize through microtransactions. It's a bit of maturity from experienced developers in the often volatile and fad-oriented social gaming scene.
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