Accounting for Revenue

posted by on 5th June 2022, at 1:01am | Discuss Article

When Jagex announced they would be launching their own launcher (no pun intended), including support for multiple accounts, hopes immediately went up. Somehow, the belief that multiple characters per account would be supported made its way into the world. Soon after, this was debunked on stream. Still, we knew from the get-go that Jagex wasn’t going to support multiple characters per account, at least not without making you pay extra for it.

To understand this, we need to look at monetization for videogames more generally. For decades, publishers sold games for a fixed price. Perhaps there would be one or more DLC released afterwards, but that would be it. Unless you’re The Sims, then it would be dozens of DLC: even back then EA was squeezing every single penny out of its audience. Over time, virtual distribution of games become more commonplace. No longer did releasing a DLC come with the overhead of creating physical disk images and distributing those.

At the same time, prices of AAA games kept rising, until eventually hitting the important $60 mark. While we are starting to see more breaks with the trend, games more expensive than $60 were very rare for a long time. It is one of these magical numbers where we perceive any number bigger than that as way more expensive. So releasing a game for $70 would actively harm sales.

DLC proved to game publishers that different people are willing to spend different amounts of money on a single game. When EA released DLC after DLC for The Sims, they were onto something. Not only are some players willing to spend more money, some people have almost no limit in how much money they spend on a game. The industry calls these people “whales”. As the miniaturization of DLC continued to the point of micro-transactions, a new golden rule developed: always be creating spending opportunities.

The relation to RuneScape is clear. In the world where spending opportunities are the key to success, subscription-based games suffer a large disadvantage: either you have access to the game, or you don’t. Before RuneScape introduced micro-transactions, even if you wanted to spend more on the game, there isn’t really a good thing to spend it on. Multiple characters have limited value, because the replay value of RuneScape is limited, but it was the only way Jagex could ever see more than a single subscription fee per month from a single person.

When Old School came out, having people pay a separate subscription for both was an option that was on the table. Within the context sketched above, you can see why. Jagex must have realised that the overlap of people who play both would be limited, and having players be able to jump ship to the other RuneScape when they get bored of their current RuneScape must’ve been too big of an advantage to split up the subscriptions.

Fastforward to today, we have Treasure Hunter, Solomon’s Store, and RuneMetrics bringing in auxiliary revenue streams besides subscription fees. At the same time, many of the players who play actively often have at least one alt (an ironman for example). Paying for membership of an alt through bonds is not uncommon, but every bond is still paid for in real money at some point up the chain, so it makes little difference to Jagex’s bottom line. With subscriptions still being a significant portion of the overall revenue, all the revenue in case of Old School RuneScape, cutting that revenue in roughly half makes no sense from a business perspective. Making players’ second character free would do exactly that.

The world of monetization is complicated, and it is not unlikely that at least some of the lost revenue would be made up by increased sales elsewhere as people’s budgets clear up. However, the history of monetization in videogames has shown that budgets are either non-existent – in case of the whales – or that budgets are less important than perceived value in purchasing decisions.

We have seen many studios release their own launchers in the past few years, often to the detriment of the user experience. Yet, even if we aren’t getting multiple characters per account on RuneScape, I believe the Jagex Launcher will be a step forward. Account management for RuneScape has been a thorn in the side for anybody playing more than one character, and third party tools wrapping the RuneScape client are more popular than ever. Jagex can bring some of those benefits to their own launcher, providing a better experience for everyone without sacrificing account security. Most importantly though, there will be no change to the account structure, because risking a major revenue stream is a much bigger decision, and likely one that would have a negative outcome.

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