As software as a service becomes mainstreamed, I’ve been watching how startups monetize their applications. The straight subscription model is the default. However, the recurring costs of a subscription model seem to annoy people as time goes on. If you aren’t using too many SaaS products, one or two subscriptions are tolerable. When you move up to 5 or 6 products you begin to get subscription fatigue.
In-game economies is one answer to subscription fatigue. Evony is a massively multiplayer real time strategy game that’s made a quiet entrance, but has amassed an impressive user base. It’s “always free” motto promises complete game play, but monetizes objects in the game. This gives the game player the freedom to buy into the game as much or as little as they wish. For Evony, the price can be free to whatever they’d like to spend.
Individual players in the game can join alliances which provide mutual support, protection and reinforcement in battle. As the communities solidify, Evony has made several game elements exchangeable, but several others are not. This creates an internal economy of need. If your team needs your participation and that requires an object you might be able to find, that puts creates a social need for that object.
Playing alone, the gamer might wait for a few days or even weeks until they find that object. The social need becomes a powerful element in the Evony business model. In light of this, it seems that Evony would benefit from creating functional groups of their buyable objects.
For example, when starting a new city in Evony, players need to quickly establish a lot of easily constructed structures and populate the city. Some of the things you can buy are “guidelines” that hasten construction and “boxes” or “packages” that can have people or resources. A “new city” package that included people, resources and guidelines would be what I’d expect to come next.
The communities grow quickly in Evony and can determine whether someone will make it in the game at all. They should be the first aspect of the game to leverage for Evony success. So, the next area I’d go for if I were Evony would be to provide community discounts. So if you are part of an alliance that spent a certain amount on Evony, the entire alliance gets either a kickback of game currency, a discount or a package of some type.
The next thing I’d do is monetize game participation. If you have a 100 member alliance but only 10 of them actually participate, that’s not worth much. But 100 members where 80 regularly participate is impressive and should be rewarded.
SaaS products outside the gaming world can learn from this as well. It’s not necessarily the software that is being monetized, it’s the performance of the user. Counter-intuitively the product becomes more valuable to the individual as their usage increases. This value increases exponentially as the network of users increases (Reed’s Law).
We’ve seen that networks don’t make an application sticky, but the activity of a network does. Evony has been interesting to watch as the activity of the alliances have brought people back to the game. This makes it “coopertainment” – entertainment that required cooperation in order to enjoy (and monetize) fully.