GW2 and Virtual Value

Recently an online game called Guild Wars 2 released an expansion. Somehow it managed to cause a fair bit of anger and dismay for some, while for others it was all perfectly fine and normal.

Why?

To set the scene, GuildWars2 (GW2), an online multiplayer game was due for an expansion to be released. As you’d expect a fair bit of hype and interest was generated by the game company Anet. However when it was released, it was released as an all in one package with the original game which was of absolutely no use to anyone who already had the game.

The initial reaction can best be summed up by the very first response to the expansion release on the GW2 Forums: “But I already have the game”.

It was a feeling shared by many and it’s very logical. A gamer has owned and been playing this game for months or possibly years. They’ve seen the build up for the coming expansion and been looking forward to it’s release. However, when it appears, it’s priced at the same cost as the original game, and includes the game they already have … so … “But I already have the game” is a perfectly fair comment.

The original game contains somewhere around 35 maps, hundreds of quests, numerous jumping puzzes, several dungeon instances, a range of character professions and 5 “character slots” to make new characters.

The expansion (as far as anyone knows), contains around 6 maps, one new profession, a few more skills and an upgrade to player guilds.

The expansion is clearly not at the same content level as the original game, so there was a reasonable expectation it would be priced at less than the original game as an expansion that could be added to what players already had.

In summary: #

• New player, buys in, gets the original game plus the expansion at the same cost as an existing player paid for the game (if they got it from Anet at full price).
• Existing player buys in, gets just the expansion, for the same cost. In effect they’ve paid full cost twice.

That’s why it caused problems.

But it’s stranger than that…

“What is the actual value of the game?” #

Well it’s hard to say. The full listed price was £35, but Anet often discounted this to as low as £6 to encourage new players to join up. They make a fair amount of revenue from in game sales of items, so growing the player base makes economic sense.

So that doesn’t give us a fair picture of what an expansion might cost. Somewhere below £35 if we refer to full price .. and somewhere less than £6! If we refer to the discount sales.

Note that neither of these were presented in Anets initial expansion release deals. The absolute minimum cost was £35, the same as the original game.

Ok so why is that fine with some players?

Many players just don’t mind spending £35 on a game they like. If you’re in a budget bracket where you can spend £100 a month on computer games, then this is a huge fuss about nothing. Or rather .. it’s possible to entirely ignore the question of actual value, because it’s not relevant to your budget.

Some players argue that they love the game so much, they would happily pay more to support it’s development. As a side note here, Anet and other game companies should look in to setting up “Donation” pages, to allow these players with big wallets and hearts to throw money at them for nothing.

But back to the question of true value in computer game terms.

“There is none”.

When it comes to pricing value to something like an expansion pack, or in game item, it becomes very difficult.

Take the base cost of developing the GW2 expansion. It’s the actual cost of paying games designers and artists for the hours they spent producing, testing and packaging the expansion. That’s the fixed cost. Beyond that, there’s the cost of hosting the data on a server and paying for bandwidth.

So lets take a year of expansion development plus a year of hosting the game in to account. Say 5 people, working flat out for a year on only this project on £30k salaries. £150,000 labour costs, and lets chuck in £5k for server space, bandwidth and infrastructure support.

£155,000 / £35 = 4,428

They need 4,428 people to buy the expansion at £35 to cover the cost.
We can estimate GW2’s regular user base to currently be around 250,000 based on Twitter and forum account numbers. Could be more, could be less, but 250k seems like a reasonable start point.

Let’s say two thirds of those users upgrade = 166,667 users.

166,667 x £35 = £5,833,333

Which is ever so slightly more than the cost of development and deployment we put together above.

On those numbers, the “just cover the costs” price of giving the content to all users for a year is £155,000 / 166,667 users = £0.93p

So the actual value of the expansion pack in terms of covering costs is roughly around £1 per user that upgrades in the first year. Of course nobody is going to give something away at cost. But it does highlight the shock a lot of players got from the £35 price tag for a minimal expansion.

Let’s say I’m wildly out on the development costs and it is nearer £300,000 to put together the expansion and host it. That’s still only around £2 per pack to cover costs. So for 50% return on your costs, £3 would be a fair price for the expansion. For 100% return (a profit of £300k), then £4 would be the price. So … £35? It looks like an attempt at around 1000% return on the development cost. I spell that Greed. Especially when just about every player out there would have been totally fine with an £8 price tag for just the expansion (200% return or £600,000 clear profit, even more since nearer 100% of your user base would have paid up).

So what is actual value in computer game terms? #

“It’s what the market is willing to pay for it”
That is what actually defines acceptable price.

Since the gaming world is so full of people who are susceptible to hype marketing, that factor of price vs. actual cost can be really quite large. Take the high end weapon skins in CS:GO. They can be worth hundreds of £ to the gaming community, while the actual cost is probably a few pence to the developers.

Where you personally decide to put your money, which hype trains you decide to jump on, are up to you. The paying public. Sadly, the paying public can be blind to many faults, marketing strategies, and plain lies when it suits them. More people need to vote by not opening their wallets, not playing the games that exhibit extreme greed, and supporting other gamers who try to take those approaches.

Will it happen?
No.

Hype makes money when you have a huge potential market.
Value is not a factor.