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If you were in charge of deciding whether the game had a cash shop or did not have a cash shop what would you choose?


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3 hours ago, Khisanth.2948 said:

"enough money"? ūü§£

In an environment where investors expect continuous exponential growth? ūü§£

 

No such thing as a business making enough money and then they stop like someone becoming full when eating and then they stop.

 

Due to the existence of the gem exchange, everything in the gem store is already obtainable in game. A 700gem store skin is around 200 gold. This both more and less expensive than skins that are not from the gem store

In an environment where the game was making enough money, the company wouldn't need investors.

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50 minutes ago, nosleepdemon.1368 said:

In an environment where the game was making enough money, the company wouldn't need investors.

This makes me realize how alien the world of finance is to normal people.

This absolutely is a reasonable statement from a normal perspective (no sarcasm).  It is absolutely reasonable to say there is such a thing as an upper limit, i.e. a point of satiation.

Unfortunately, that is not at all how corporate finance works.  In the world of corporate finance, a business must exceed RoI (Return on Investment, the common metric to measure a business's growth rate).

In this world of finance, zero growth means your business is dead and might as well not exist.  Not meeting the RoI means the business is failing and will be dead soon.  Meeting the RoI means the business is doing the bare minimum to get by, and if nothing is done about it it will eventually fail and die.  Exceeding the RoI is the normal state of business.

ArenaNet is owned by NCSoft, which is a very conservatively-minded corporation.  If ArenaNet is not exceeding expected growth, NCSoft will start to intervene.  If ArenaNet is even slightly below expected growth, NCSoft is intervening whether ArenaNet likes it or not.

Whether this is a horrible mindset for the general global business community to have is often debated.  

 

I'm mentioning this to put things in perspective that corporate finance is very very different from the rest of the normal world.

 

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2 hours ago, Southerncarl.2740 said:

 

Basically I'm trying to see whether people genuinely actually like having a cash shop where you can purchase armour, boosts, convenience items etc or do we all just tolerate it because we really like the game and a shop is just a standard feature of MMO's now.   

 

With all the variables about generating cash and profit removed we would as consumers still choose to have a cash shop in the game or would we not?

 

I'm phrasing it in this way to avoid people talking about the reasons why it has to be done but whether generally us as consumers would still choose to include it in the game if we had the choice. This isn't a gotcha question I'm genuinely interested.

For me, the GW2 cash shop is much better than most cash shops I've seen.  It neither contains things I have to have to enjoy the game, nor does ANet wave it in my face at every opportunity.  I do like being able to purchase some things, especially if I can garner the gems by exchange.  Since I don't like half of the "tasks" that ANet deems worthy of gaining rewards in play, but can get gold by playing most anything I do want to do, I see that as a plus.  So, yes, I'd choose to keep it.

 

I also believe that there is a process by which game developers set standards for what they believe to be sufficient in-game rewards to keep people interested.  Most MMO's make reward acquisition take time, so there is going to be a sweet spot in the continuum of players, with some players finding rewards to take too much "grind," while others believe there aren't enough.  Since it makes sense for a developer to try to keep people engaged, it would make sense for them to set that sweet spot as best they can, while avoiding a situation where they put "enough" stuff in to please the high-play-time end of the continuum, which runs the risk of cheesing off the low-lay-time end and maybe even the middle.  So, I don't believe that even without the shop, and assuming no financial impact, that we'd see much more rewards put into the game.

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12 hours ago, Southerncarl.2740 said:

 

 

Man it's a hypothetical question read it and answer it's not hard.

It's a question, so hypothetical that it ignores reality. But sure, let's do this...

 

In a world, where companies can develop games for free, no one has to pay rent, no one has to pay taxes or has expenses for food or housing. In this hypothetical world that does not and will never exist. I want ANet to make the game so, that it does my laundry and cooks me food along witheverything else being unlocked for free w/o effort or anything. Just install and have all legendaries, all skins, all everything unlocked. Stuff's free, right, so it doesn't matter. Also, since I like pinball games, sims and gta, all those games would be implemented to GW2 perfectly. Let's put Fifa in there too. Maybe, hypothetically speaking, ANet could make the game so, that it also takes care of my social life. I want to order food and wares in game that get delivered to my home, for free of course, because no one has any expenses, right? I want GW2 to solve climate change and the conflict in the middle east as I play. I want the game,to bring people to mars, since everything is free, this isn't too much to ask imho. GW2 should also cure all diseases while it's at it. World hunger no longer is an issues, since in this hypothetical world everything is free so no one has to hunger, free McD's for everyone, yay! Maybe, since scarcity is no longer an issue, I want GW2 to solve the energy crisis as well and maybe develop time travel on the way. Like this, GW2 could solve all the problems of the past as well...well if there ever were any problems to begin with. We're still speaking hypothetically so if scarcity, costs and the likes are not an issue right now, chances are they never were issues to begin with. Yep answering this hypothetical question was really worth my time. 3/10 made me reply twice.

 

Your question is, as has been mentioned many times now, flawed. Calling it hypothetical, won't change that. It's still a borked premiss.

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19 hours ago, Southerncarl.2740 said:

As the title says if Arena put you in charge of deciding whether there was a cash shop in the game or not what would be your decision?

 

The current system is fine. What's the purpose of this thread? They have to make money somehow apart from the very rare expansion releases.

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11 hours ago, Rogue.8235 said:

This makes me realize how alien the world of finance is to normal people.

This absolutely is a reasonable statement from a normal perspective (no sarcasm).  It is absolutely reasonable to say there is such a thing as an upper limit, i.e. a point of satiation.

Unfortunately, that is not at all how corporate finance works.  In the world of corporate finance, a business must exceed RoI (Return on Investment, the common metric to measure a business's growth rate).

In this world of finance, zero growth means your business is dead and might as well not exist.  Not meeting the RoI means the business is failing and will be dead soon.  Meeting the RoI means the business is doing the bare minimum to get by, and if nothing is done about it it will eventually fail and die.  Exceeding the RoI is the normal state of business.

ArenaNet is owned by NCSoft, which is a very conservatively-minded corporation.  If ArenaNet is not exceeding expected growth, NCSoft will start to intervene.  If ArenaNet is even slightly below expected growth, NCSoft is intervening whether ArenaNet likes it or not.

Whether this is a horrible mindset for the general global business community to have is often debated.  

 

I'm mentioning this to put things in perspective that corporate finance is very very different from the rest of the normal world.

 

The point I was making is that ANet could have remained a privately owned company if it were making enough money.

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7 minutes ago, nosleepdemon.1368 said:

The point I was making is that ANet could have remained a privately owned company if it were making enough money.

Although at that point the company was making no money. NCSoft bought Anet early in the development process for GW1 (which was the studios first game), so at that time they had no products to sell and hadn't made any income, let alone profit.

 

I suppose in the OP's hypothetical world where they don't need money they could have carried on developing the game with no investment - no money coming in from anywhere at all - because apparently in this world game developers don't need money to live.

 

But back in the real world they didn't sell to NCSoft because they'd tried and failed to make enough money on their own. I assume they knew from the start they'd need outside investment and got their game concept to the point where they could pitch it to potential companies then started shopping around for a suitable investor, which ended up being NCSoft.

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Let's take 2020 as baseline.

 

In 2020, NCsoft's revenue from Guild Wars 2 amounted to around 61 billion South Korean won, a slight increase compared to the previous year. Converted at the current exchange rate, that is around 52 million US dollars. Let's make it an even 50 million dollars.

 

Let's also assume that 50 million dollars in revenue is needed for continued development in the same amount we have seen in the past.

 

This leads us to following calculation:

At 30 dollars for an expansion, the game would have to sell 1.6 million times per year.

 

Now we know that yearly expansions while supporting a living world is not possible resource wise currently (in fact not even living world and an expansion every 2 years is possible). So let's assume a 2 year expansion release schedule.

 

At 30 dollars for an expansion, the game would have to sell 3.2 million times every 2 years.

Or

if we increase expansion price to 60 dollars, the game would again have to sell 1.6 million copies every 2 years.

 

Expansions would have to be mandatory, which again might lead to part of the player base leaving.

 

Would this be possible? Maybe, certainly not with a part of this player base (and it's questionable that the current active player base would be large enough to begin with). Past communication has clearly shown that a lot of players are not financially able or willing to invest such money on a regular basis.

 

There is also another alternative: 30 dollars per year amounts to 2.5 dollars per month. That is what the monthly subscription fee would have to be, at 1.6 million players, to reach current revenue amounts.

 

EDIT:

Forgot to add what my personal opinion on the matter is. I don't mind subscription fees and I certainly mind them a lot less than having more and more content/rewards be shoved behind a gem store (even if I have no issue with purchasing what I want).

 

That said, both this game and its predecessor have built on in part a financially weak player base (which is no judgement on work ethic or anything, there are enough countries where people earn less than in western countries). To ignore these players or decide to drop them is not a decision to be made lightly.

Edited by Cyninja.2954
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At this point the game has to have a cash shop. The content delivered pales in comparison to sub games like wow and ff14. Whenever these comparisons are made, the white knights hide behind the defense that the game is made by a small studio making a buy once free to play game and you should compare it to games similar to those. 

Now at this point i would think we need a optional subscription system, income appears appears to be stagnating, which lead to the layoffs and the mid term aborted IBS. This is the risk from your whole marketing model is making good content for free and selling over priced add ons to happy participants.  This is similar to novie theaters, $6 tickets and $12 pop corn. But just like theaters, if the movies are bad and noone wants to see them, there is no income to make.

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9 minutes ago, Shadowmoon.7986 said:

At this point the game has to have a cash shop. The content delivered pales in comparison to sub games like wow and ff14. Whenever these comparisons are made, the white knights hide behind the defense that the game is made by a small studio making a buy once free to play game and you should compare it to games similar to those. 

Now at this point i would think we need a optional subscription system, income appears appears to be stagnating, which lead to the layoffs and the mid term aborted IBS. This is the risk from your whole marketing model is making good content for free and selling over priced add ons to happy participants.  This is similar to novie theaters, $6 tickets and $12 pop corn. But just like theaters, if the movies are bad and noone wants to see them, there is no income to make.

If you want an optional sub, I'd have good news for you, but I won't reiterate what has been said hundreds of times in hundreds of "SuBfEe NaO!"-threads over the years. I'm sure you'll figure it out.

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The layoffs were due to resource mismanagement.

Even if they did make a profit, it wouldn't matter as the money was reinvested in projects which never bore fruit and drained the company of it's budget and talent. We have to remember that a good number of people laid offs were equally working on said projects.

The reason NCSoft likely intervened was that those projects cut too deeply into ANET's funds without  short term returns. Hence the company may have been running on fumes.

It's not all based on income. It's also what part of that income has to be reinvested for the system to keep going and still make a profit for the parent company.

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1 hour ago, Cyninja.2954 said:

Let's take 2020 as baseline.

 

In 2020, NCsoft's revenue from Guild Wars 2 amounted to around 61 billion South Korean won, a slight increase compared to the previous year. Converted at the current exchange rate, that is around 52 million US dollars. Let's make it an even 50 million dollars.

 

Let's also assume that 50 million dollars in revenue is needed for continued development in the same amount we have seen in the past.

 

This leads us to following calculation:

At 30 dollars for an expansion, the game would have to sell 1.6 million times per year.

I remember discussing this with Vayne I believe (not the one that posts a lot currently but the other one) and we came up with a baseline per month based on the amount of people that were employed by Anet (after the layoffs) and an educated guess of what each person would make (we took a range of what game devs make in the seattle area) on average plus the cost of the building, utilities, etc. We came up with about 3-5 million per month.

 

That amounts to 36-60 million dollars per year just to keep the doors open. So you're on the right track and it shows that even at 52 million dollars, the profit isn't as much as people think and they need to make this amount every year. So that's just showing to from a different angle.

 

In 2020 it was 52 million but in 2019 it was 50 million and that was the lowest ever in GW2 history. The years before 2019 were a lot better. So far this year, in the first two quarters, GW2 brought in around 27 million dollars so they should improve this year easily with the pre-orders already, but they kinda need to I think. NcSoft won't stand for the 50 million area without making more cuts I think and that led to massive cuts in staff in 2019 as we know. Of course developing an expansion does come with extra costs. So it will need to do really well. Before 2019 GW2 brought in revenues between 66 million dollars and up to 140 million dollars (in 2012 when the game launched). So 50 million dollars is not that great for Anet.

 

I think that many here don't really appreciate the pressure that Anet are under to just keep afloat, particularly the last couple of years.

 

And yes, I do have a spreadsheet with all the quarterly numbers for GW2 lol.

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35 minutes ago, Naxos.2503 said:

The layoffs were due to resource mismanagement.

Even if they did make a profit, it wouldn't matter as the money was reinvested in projects which never bore fruit and drained the company of it's budget and talent. We have to remember that a good number of people laid offs were equally working on said projects.

The reason NCSoft likely intervened was that those projects cut too deeply into ANET's funds without  short term returns. Hence the company may have been running on fumes.

It's not all based on income. It's also what part of that income has to be reinvested for the system to keep going and still make a profit for the parent company.

Though I would argue that the mismanagement of resources did lead to Anet not taking care of GW2 properly. They said as much in 2018 I think it was, that they weren't going to do more expansion but that they would make sagas instead. Players didn't care for that much and down went the revenue, so those things kinda go hand in hand.

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1 hour ago, Danikat.8537 said:

Although at that point the company was making no money. NCSoft bought Anet early in the development process for GW1 (which was the studios first game), so at that time they had no products to sell and hadn't made any income, let alone profit.

 

I suppose in the OP's hypothetical world where they don't need money they could have carried on developing the game with no investment - no money coming in from anywhere at all - because apparently in this world game developers don't need money to live.

 

But back in the real world they didn't sell to NCSoft because they'd tried and failed to make enough money on their own. I assume they knew from the start they'd need outside investment and got their game concept to the point where they could pitch it to potential companies then started shopping around for a suitable investor, which ended up being NCSoft.

Ah thanks, I did not know they had been owned by NCSoft practically from the get-go. That's pretty good going then IMO!

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1 minute ago, nosleepdemon.1368 said:

Ah thanks, I did not know they had been owned by NCSoft practically from the get-go. That's pretty good going then IMO!

I don't think it's very well known because a lot of people like to talk about how NCSoft's involvement has affected GW2 as if there was a 'before' to compare it to.

 

Apparently Anet was founded in 2000, shortly after the founders left Blizzard, and bought by NCSoft in 2002. GW1 was released in 2005. There's not a lot of details about the process because new game studios being set up, developing a concept for a game and pitching it to investors is something that happens every day, so it's rarely news-worthy.

 

I do remember before that hearing there had been a 'major schism' at Blizzard with lots of senior people quitting work on their upcoming MMO to found their own studio instead...followed by news that actually it was only 3 people and wasn't expected to have a major effect on the game. Much later (around 2006) I was kicking myself for not paying more attention to what happened to those people because it turned out their game was much closer to my ideal MMO than the one Blizzard made and I'd missed it's release and had to catch up after Factions came out.

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21 hours ago, Naxos.2503 said:

Cash shop. 

The way they've handled it so far is very balanced from what I can see. Quite a lot of neat stuff can be accessed in the game and not in the cash shop.

ANet are now offering free Living World episodes for those who didn't log in when it was possible to get those for free (or didn't want to buy Gems to purchase those packages). This is a catch up mechanism they now offer for free which should at least show that even when they can monetize something like LW episode, they also do offer ways to get around to spend large sum of (real) money.  It is also quite often sales where those items are cheaper to buy in Gem Store, so it is possible to buy things like LW episodes for reduced price or anything else if one just keep an eye out for larger sales which happens during certain periods during a year.

If one play this game on regular basis one will also accumulate Achievements Points (AP) which are listed in Achievements tab for Hero window where one can see which level one have to be to get some free Gems. So all in all there are more way to both earn and motivate to get those items then just from buying with real money items in Gem Shop.

Removing cash shop will cause a very steep increase to purchase access to this game as then the initial price would have to compensate for this loss in income. It will not be a mere ‚ā¨ 30 or $ 30 for getting into next Expansion pack (XP) or get the base game for some reasonable price. Another issue would be the quality of each new XP and how this will be use to motivate new as old player to stay in game.

The way it works now player can feel secure that if they would take a break from game and return later they will not have missed out very large potion of game or that when they create groups that some members are closed off from doing things (I don't talk about those that try out this game for free which is possible today as those players have some limitations). As long you watch out for when there is a new Living World episodes time frame and log in, you will not lack any content as far as story line have worked until a new XP have been published.
 

The main problem with these types of threads are that they only look at Gem Store in isolation vs subscription and miss out to understand how things in game actually work to both get players to get free items or even in game currencies (Gold or Gems) which translate into items that player owns (can be purchased in GS) not to forget that its also a part of player progression in game world. AP rewards that give you some Gems for free, Map completion that give keys for BL chest (and token which can be used to buy some GS items from special BL vendors and so on).

Considering that ANet also have kept Gem Store prices the same on items (the base price when there is no sale offering on items) over a rather long time scale which also is important. There are other in game stores where those prices have been increasing, so there are more ways to make things more expensive for players then just what you charge for in game currencies like Gems.

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21 minutes ago, nosleepdemon.1368 said:

Ah thanks, I did not know they had been owned by NCSoft practically from the get-go. That's pretty good going then IMO!

To be exact, the company was founded in 2000 (first under the name Triforge but quickly it changed to Arenanet).

NcSoft acquired them in 2002 and Anet became part of NcSoft West in 2008. That move is what people tend to refer to when NcSoft got more involved and Anet lost a degree of their independence that they had before.

 

The year before that in 2007 Anet announced GW2 and at that time they were wanting to create "everything you love about GW and putting that in a persistant world". So for me it's clear that something changed during the production time of GW2 because it became anything but that...and then we see that a year-and-a-half after that the reorganization of Anet into NcSoft West happened. So did it have to do with the changes? I think so, but it's just my opinion. I can't prove it.

 

 

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20 minutes ago, Danikat.8537 said:

I don't think it's very well known because a lot of people like to talk about how NCSoft's involvement has affected GW2 as if there was a 'before' to compare it to.

 

Apparently Anet was founded in 2000, shortly after the founders left Blizzard, and bought by NCSoft in 2002. GW1 was released in 2005. There's not a lot of details about the process because new game studios being set up, developing a concept for a game and pitching it to investors is something that happens every day, so it's rarely news-worthy.

 

I do remember before that hearing there had been a 'major schism' at Blizzard with lots of senior people quitting work on their upcoming MMO to found their own studio instead...followed by news that actually it was only 3 people and wasn't expected to have a major effect on the game. Much later (around 2006) I was kicking myself for not paying more attention to what happened to those people because it turned out their game was much closer to my ideal MMO than the one Blizzard made and I'd missed it's release and had to catch up after Factions came out.

 

Ha! I had no idea they had forked from Blizzard, that's pretty interesting. Although I did enjoy WoW up to the release of Burning Crusade and later, the story elements of Wrath of the Lich King. I wasn't a particular fan of how the game turned out though and when Classic launched I checked it out to see if I was just remembering things too fondly. I quit shortly after because I had quickly become addicted. There was a magic and meaningfulness to the original game lost over successive level increases and mechanics added to Keep You Playing. GW2 has never really lost its appeal to me, ANet have stuck fast --more or less-- to their original design principles. A cash shop is kind of a balancing weight in my eyes, it's necessary so that the game can exist in the state that has made it so unique. My first and only legendary Bolt is still as useful (if not moreso) than when I first acquired it 5 years ago. A few days ago I realised one of my fantasies from when the game first released and acquired (and found a use for) Aether. All these little things endure, and I find other MMOs simply do not.

Edited by nosleepdemon.1368
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5 minutes ago, Gehenna.3625 said:

To be exact, the company was founded in 2000 (first under the name Triforge but quickly it changed to Arenanet).

NcSoft acquired them in 2002 and Anet became part of NcSoft West in 2008. That move is what people tend to refer to when NcSoft got more involved and Anet lost a degree of their independence that they had before.

 

The year before that in 2007 Anet announced GW2 and at that time they were wanting to create "everything you love about GW and putting that in a persistant world". So for me it's clear that something changed during the production time of GW2 because it became anything but that...and then we see that a year-and-a-half after that the reorganization of Anet into NcSoft West happened. So did it have to do with the changes? I think so, but it's just my opinion. I can't prove it.

 

 

 

I come from a rare line of players who had interest in GW but didn't play it, yet followed the development of GW2 with great interest. I played in the beta(s) and was active at launch, and found that there was a great deal of innovation in the game that did make it the sort of MMO I had always dreamed of. The Karka Queen event drove me away though, because it was just so badly implemented and Living World did not hold interest for me. I returned when HoT came out and once again found something exceptional. I'm one of those people who enjoyed the difficulty of Orr and HoT very much. All this is to say that I don't think ANet really lost their way, they did make adjustments necessary to keep the game afloat though. I'm curious - what changes do you think NCSoft's greater involvement in GW2s development were brought about?

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