Breaking: John Smedley Talks Gold Subscription Changes

Written by Feldon on . Posted in Daybreak Cash, Player Studio

SOE President John Smedley has taken to his favorite “bypass the Marketing/PR Machine” venue Reddit and posted some personal thoughts on the Subscription changes recently announced for EverQuest, EverQuest II, Planetside 2, DCUO, and all of SOE’s games under the All Access umbrella. It’s written from a PlanetSide 2 angle, but it is applicable to EQ2 as well.

From Reddit:

Hello everyone,

I hope you all had a Happy New Year! we’re here back working hard to make cool stuff.

I wanted to give a little more insight into our thinking regarding the changes to the upcoming subscription plan.

I have been personally reading every post I can find about it and I understand there is a lot of FUD out there around it. So let me clear some things up and let you in on some of our thinking process.

Goals

The goals of our plan are very simple. Let players buy anything they want up to 2000 SC. It’s fair to say that there aren’t a lot of high priced items in the Planetside 2 shop, but that’s kind of a good thing too. It’s just when you look at it from the perspective of someone who’s plan is changing they are right to ask “why is this good for me?”.

We are discussing the feedback we’ve been getting and we are making some decisions regarding this today. Particularly around Player Studio items (yeah that was a bad idea) and we’re talking about bundles as well. I promise that we are listening.

Why did we make this change? There were a few reasons really. First and foremost we wanted to let players get some of the larger items on the marketplace. People complain the other way on this all the time – they complain that the 500SC isn’t enough for them to buy enough stuff. So we thought this would be a positive change.

Second – it helps us deal with some internal issues regarding accrual of balances of SC for people who aren’t playing or spending. There are a lot of people who play and have SC in their wallets and don’t spend it ever.. this accrues over time and it’s a problem. Before the jaded among you cry out that this is really the most important reason – please don’t judge just yet. It’s actually not but I don’t want to hide the fact that it’s a part of it.

Third – we have a problem with a disparity between our console titles (which can’t use Station Cash) and our PC Games. We can’t do the same kind of promotions as easily on the PS3 and PS4. We’re a lot more limited because we can’t use Station Cash on there. So when we have a 3x sale on SC we have to do something different for our console titles. It’s a pain in the neck to deal with this.

Forth – And this is very important -

We are considering (and are likely going to move forward with) a plan that means if you subscribe to one of our games you are a subscriber to all our games (this applies to PC titles only btw).. all for the current $14.99 a month. That’s a benefit most companies simply can’t offer because they don’t have our portfolio of games. The goal would be to let you pick an item in each game you play. Some of you might say “well who cares..I only play Planetside 2. How is that a benefit to me?” My answer is simple – we’ve got a great lineup of games, some of which aren’t announced yet that cater to a lot of players. We have EQN and EQNL coming along with other….. games… that PS2 players might just like :)

I will do my best to keep up with this thread and answer questions as much as I can (a bit AMA style).

Smed

Smedley is treating this as an impromptu “Ask Me Anything” and has been answering questions posed on Reddit, including this one about whether players will be able to receive refunds for 3, 6, or 12 month subscriptions purchased in advance which will no longer have the 500SC/month credit:

subscription500sc_refund

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Comments (14)

  • striinger

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    Increased player exposure to content they may not have now, balance sheet and console influence; no surprises. I expect the winds of change will blow until SOE is integrated into the PSN ecosystem.
    New consoles are like specialized PC and the new PC flagship EQN is listing steeply toward game pad style controls and the more static and limited graphics found in consoles.
    I hope their strategy to integrate the fantasy MMO with console doesn’t end with the likely outcome of a shortened life span.
    Can a console game last 10 or 15 years? Do modern consoles have the ability to evolve as pc hardware does? Do games want to last that long?

    Reply

    • Jrral

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      I just hope that if they’re aiming for console-style controls on PC games that they think about how that worked for DCUO. One of the biggest complaints there, big enough to drive players away, was that the controls just didn’t work in a natural way. It was natural for a console controller, but DCUO didn’t support console controllers on the PC and it didn’t map well to a keyboard and mouse. If they go the same route again in an MMORPG-type game, I don’t expect a different outcome.

      They really should’ve separated the Player Studio items out up front. SOE-created items cost absolutely nothing to sell in the Marketplace (the fraction of a penny for the storage of a new instance is negligible compared to the fixed costs of the game server farm), but player-created items need to have the royalty factored into the price. And I sometimes think someone needs to remind the business people driving the Marketplace of the concept of “funny money”. When the IT department buys a box of printer paper from Supply, the company doesn’t make any money. It’s just a transfer from one ledger column to another. Same with the Marketplace. The money is made when people buy SC, not when they buy stuff in the Marketplace. So price things looking not at Marketplace purchases but at maximizing purchases of SC. PSN has it right, as do grocery stores. The grocery store doesn’t price candy bars at the checkout counter to maximize how much profit they make on a bar or how much they get per bar, they price it so people don’t have to think about whether they can afford to grab a candy bar or two on the way through. If people don’t have to twitch and debate before buying, they’re more likely to use up their SC and have to buy more. And since they perceive that they’re getting a lot for their money, they won’t twitch so much at reloading their SC balance. Player Studio only causes a problem with that if the royalties aren’t figured in, and there you can do it in part by letting the creators set the price. It can’t hurt SOE since royalties are a percentage of price, not a fixed amount. I get the feeling though that the added complications of having to pay royalties weren’t well-thought-out beforehand (they were thought out, but as happened so often at my job management was optimistic and handwaved away the hairier aspects and it came back to bite them (things like that being why in software development “experienced” is synonymous with “jaded, cynical and pessimistic”)) and that’s caused issues.

      Reply

  • Noctew

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    The second point is interesting. Imagine you have a player subscribing for a year, but never spending any of the SC, and nothing is ever heard from him again.

    SOE then forever has to keep some amount on their books as provisions because some day, maybe in 10 years, that player could return and spend the SC on Player Studio items and SOE would have to pay out that money.

    In theory (!) they could even go bankrupt despite having enough cash because the amount of provisions could be higher than those cash amounts. I don’t know about US accounting rules, but by European standards, then they’d have to file for bankruptcy immediately.

    Reply

  • Anaogi

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    Why on God’s green earth do they always seem to announce these things just as everyone’s going out of the office for an extended period, thus allowing a s***storm to swirl unaddressed and amplify with neglect? This could have been dealt with last week, but instead it just cooked until now.

    Honestly, whoever is in charge of SOE’s PR and customer relations should either be screaming at those responsible for this round robin Charlie Foxtrot, or looking for employment elsewhere…this is just pathetic…

    Reply

  • Fievall

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    I wish he would just be honest, and stop pulling this run around. They have been loosing their arse with all the station cash sales, and with EQN, and EQNL coming they understand that there is a ton of free obtained station cash out there that might be used to buy items in EQN, and EQNL. This means for months, if not longer, they would not see the influx of cash that players purchasing from the market place would normally bring.

    For a newly launched game that will be set up, and geared to make money from station cash purchases, it will be a big hit to their pockets, when people bring large piles of freely obtained station cash to the game with them, when they need to be showing a strong profit from the new game to make investors not freak.

    Captain Smith (Titanic) has been running their station cash department, and they have only just now started to turn the ship.

    Personally the change doesn’t bother me, its that fact they don’t just come out and be up front about the mistake that even a blind man could see is my problem.

    Reply

    • Loch

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      I don’t know. From Smed’s responses in that reddit thread, it really did seem like he was pretty forthright in SOE’s reasoning behind all of this. He explained it in much greater detail when asked by players.

      I was also pretty impressed with how quickly he said “Yes” about the refunds to those players who purchased subs under the impression that they would receive SC.

      Reply

      • Fievall

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        I’d like to believe that but if you would like I’d point out where I see the glaring errors, and non-statements he made.

        …First and foremost we wanted to let players get some of the larger items on the marketplace. People complain the other way on this all the time – they complain that the 500SC isn’t enough for them to buy enough stuff. So we thought this would be a positive change.

        Ok so their first reason why they made the change was because 500 station cash a month wasn’t enough for people to buy enough stuff. Lets look at that statement, and the logic of the statement. Currently your station cash rolls over every month. Meaning if you want to buy a large item you just wait a few months, and you can buy a large item. So the complaint that 500 free station cash a month isn’t enough just doesn’t make any sense. If they were really concerned about people’s ability to buy a lot of stuff, often with the free station cash, then the logical thing would be to reduce the cost of items in the market place. Something many people have agreed on since the market place went live has been the prices of the items in the market place are far to high for most of the items. If he were really concerned then lowering the prices would be the best thing to do in this case.

        Second – it helps us deal with some internal issues regarding accrual of balances of SC for people who aren’t playing or spending. There are a lot of people who play and have SC in their wallets and don’t spend it ever.. this accrues over time and it’s a problem.

        Ok. He says there is a internal issue with people who collect station cash, but don’t either play, or spend the station cash. Ok what does that mean, and how is that a problem? Station cash is just data in the system, that is backed up multiple ways, so the issue isn’t fear of losing that data. So what else would be a problem? Occam’s razor would suggest the simplest solution to be the correct solution. Since the collecting stock piles of station cash can’t be used to flood the system, as it is already claimed for an account, then it isn’t a problem of market inflation. Then what is the problem? The only one that comes to mind to me, is the one I already said above in my first post. EQN/L is coming out soon, and the only concern they would be having internally would be the concern that butt loads of station cash is being stocked piled that can, and will be used in EQN/L . The best solution for them is to first stop the free station cash so they can stop those piles from getting larger every month, and to also insure that in the future people aren’t using their eq2 sub to play EQNL completely for free.

        That’s the meat of it. Point three has nothing to do with the station cash market, or rewards gained from paying for a subscription based pc game. As he pointed out they don’t use station cash on the console. So i’m confused by the pain in the neck comment. Because they do bonus station cash days for the people playing the pc games it’s a problem for people playing consoles how? None I can see. Sony owns their market, and set prices. It’s apples and oranges, and they are trying to sell us rotten fruit while telling us it is good for us, and it will make the apples more orange like, and the oranges more apple like.

        As for his forth point I actually laughed. The truth of the matter is people are going to feel cheated. I’m not one as I don’t buy much from station cash, so I’ll likely be fine with the one free item a month. But smed is trying real hard to sell ice to Eskimos. It just irks me that either A) he is really poor with english, and doesn’t know how to clearly state in words how good this is for us, and that this really is something that is only a boon for the players, and in no way has anything to do with the fluster cuck that they have made with station cash, and their attempt to fix, on the low, a problem that that should have never happened. Or B) the typical politician like white wash of nothing wrong here move along,

        As for the refund. Good on him if he keeps to his word. I never said he wasn’t a good guy, I just said he wasn’t being honest.

        Reply

        • Froak

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          i dont understand the argument that the bonus 500 sc is terrible because its free, like they are making no profit off it whatsoever. you have to pay a sub to get it, they are not giving 500sc to every F2P player. it is an incentive to buy not a handout.

          the fact that they decided to continue using the same currency for a game that they might have to actually pay players was the mistake IMO.

          Reply

          • Fievall

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            The problem comes in like so. A sub cost 15 a month (something I’ve been doing for eq2 for like 9 years or so). While Sony controls their own market they don’t control inflation of the dollar. So the price to play the game has remained the same even as the value of the dollar has dropped. So they are getting less out of the 15 dollars already. So when they give you 500 station cash a month they are devaluing their subscription price to that of 10 dollars a month. 500 station cash is worth 5 dollars. I know most will be saying “wait it cost them nothing to give you a currency they create.” And you are only somewhat correct. It costs them nothing to make the money for sure. But the services the SC pays for have a returned investment amount that the company relies on to budget for the development of new content, along with the current subscription money. You may understand where I’m coming from now on that point, but I’ll try to explain even further in case not.

            If sony creates an item for the market place it costs them time. Not much for sure but they are investing money into the development of a virtual item that will cost them nothing to reproduce as much as they want, but it costs them the time meant to make the item. They create these products because they have a hope, and idea on how many that item may sale to make it worth the real world cash it cost the company to make. If people use only freely obtained station cash from their gold membership to buy the item then the return on the investment is lowered. The value they are getting from the monthly sub has already been diminished by the inclusion of the free station cash so this skews the return on investment that creating a SC should return. The whole idea behind SC for the company is to provide a revenue stream separate from the monthly subscription fee to boost the bottom line, and allow them to make games like EQN/L and keep developing contend for current games. If they have a large influx of SC that is in the system that comes not from new money, but from current subscriptions, then the problem they are seeing is a lower return on the investment they have made into producing SC items. Which affects their bottom line. The company projects their profit for the year, and they either meet it, exceed it, or fall short. What is happening is they didn’t account that the free station cash would be causing a shortfall in the amount of profits they would be receiving from SC, and now it has them worried. There will be tens of thousands per person of this SC out there when EQN/L goes live, and its going to create a short fall that they can’t account for. This is likely causing quite a lot of internal problems. Making mmo’s is not cheap, and if the game doesn’t generate the kind of profits they are projecting it will, then it affect their bottom line, meaning the company doesn’t make the money it said it would. Which causes their stock price to be devalued, because it didn’t meet market expectations, which pisses off investors. This can cause all sorts of things like smed being fired, to the whole mmo side of soe being dropped because its to risky of an investment. That’s not likely to happen, but I hope it gives you some idea on how something that seems simple, and harmless can lead to many problems for a company.

            I’m personally all for free station cash. But I think they are slitting their own throats while trying to find a way to get people to invest in a monthly sub. It’s a volatile market and they want to keep the player base happy, but they are juggling live grenades doing so like they are. It’s just how I see things. I could be wrong, but that is how the market works.

            Reply

      • Fievall

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        I see they reversed their choice of doing away with the 500 station cash. I must say I’m surprised they reversed their decision. They really are causing themselves harm that will either lead to them raising the cost of items in EQN/L to offset the 500 SC or they will attempt to stop it once again closer to the release of EQNL. Baa either way it doesn’t matter it is a non-issue once again =)

        Reply

  • Anaogi

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    And now it’s mostly walked back. You’ll have to /claim it each month and it won’t accumulate if you don’t, like how LoN cards are now, but other than that it’s reverting to prior.

    Reply

  • badcat

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    So what about those of us who do multi month subs. I noticed it was the monthly only subs were mentioned.

    Reply

    • Feldon

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      This is subject to confirmation, but my understanding of all these changes is, this is what qualifies as a Gold Subscription going forward:

      • Month-to-month (credit card)
      • Month-to-month (30 days game card)
      • 3, 6, or 12 months paid in advance
      • Sub paid for with a Krono

      So there’s no longer a distinction. Subs paid without a credit card will likely still be subject to additional fraud prevention with regard to Server Transfers.

      Reply

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