MMORPGs and Real Money Transactions: Shifts to F2P Revenue Models

MMORPGs started out subscription only, but I believe with the success of LOTRO and EQ2 in their respective F2P models, that part of a subscription MMORPGs “aging process” will almost always include F2P at some point, depending on how the game does, revenue-wise. On one hand, WoW took many years to reach its current free-play offer (which is still restricted in a lot of ways), whereas SWTOR has only been out eight months and will hit its “F2P” coming of age sooner this Fall.

With the ease of access and the prevalence of high-speed internet, we increasingly see a lot of companies that sell DLCs for triple A titles after retail launch. Whereas before people were buying full-on expansion packs and sequels, DLCs require a lot less man-power and development time between releases. As such, people have become accustomed to paying for smaller bits and pieces of content, and this plays into Real Money Transaction (RMT) stores for MMOs and other online games. People are willing to pay a little money for things they want to improve their game experience.
The argument for this is that whereas a subscription is a regular payment without choice (you either pay and play or you don’t and quit), you have a choice as to what you pay, and for what you are paying it for. The draw here is a wider user-base, more people will be playing if your game is F2P than if it weren’t, and thus the company has more opportunities to potentially make money on a user through RMT over the course of a game’s lifetime.
In a subscription model, you’re faced with a regular monthly bill for $15+ and you may weigh the thought “am I enjoying myself? Do I want to keep paying this subscription?” on a regular basis. Once you stop paying, the barrier for re-entry into the game is to sign on for another month at $15. With an F2P model, that player can come back at any time (no “barrier to re-entry” feeling), and paying for a few dollars here or there irregularly does not really play strongly into people’s minds as a significant tangible cost as a subscription. Look at TF2 as an example here. They regularly release new weapons and hats and people will go ahead and spend a few bucks to obtain.
My personal opinion is that subscription based revenue models for MMOs will eventually be overtaken by the “F2P” model, although maybe not completely replaced. There will always be room for at least one subscription MMO on the market (the current one being WoW), but the rest will become F2P. Currently, DLCs and RMT stores are being viewed as ways to widen revenue streams a game can potentially generate after retailing, but in the future they will be seen as the only viable revenue stream for most games.
A way I could see the environment going is that a game starts out as requiring a game purchase, but is free to play online, with an RMT. After a period of time, the game no longer has a purchase requirement, and is free to get, free to play online, and has an RMT. More enthusiastic gamers will pay to adopt the game earlier with the purchase price, and by giving the game away free later, would capture users who would not be playing before because they didn’t want to pay for the game. This widens the RMT customer base over time. TF2 and Heroes of Newerth are both examples of this. Both used to be sold with a initial purchase price and had RMT stores. Both eventually moved to a model where it was free to obtain. In Team Fortress 2’s case, it has been a great move on Valve’s part to greatly enhance the revenue seen from the game, and they’re considering using the same model for the next game they’re releasing, Defense of the Ancients 2 (DotA2).