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On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis.
The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there.
The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays.
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On April 13 2013 00:36 Plansix wrote:Show nested quote +On April 13 2013 00:20 Irre wrote:
I am a big fan of JP and the show, but I really wish that they would get rid of Catz as a "pillar". The rest of the guests have achievements and credibility to their names. Catz doesn't fit well with the show at all, and is basically there to be the NA drama portion that was left out by a much better pillar Incontrol. He is a really poor replacement. QXC, Tyler, TheOgnis, Wolf, were all really great, and I would much rather see these more reasonable,rationale and accomplished people on the show. Some progamer or casting credentials would help. Catz seems more interested in promoting his team or own fame/drama rather than contributing to what makes the show so great over the years. As someone who is invested in the NA scene, I have to completely disagree with you. Catz is the guy doing to the hard job of building up an NA team and trying to get talented players the opportunity to succeed. A lot of people see what he is saying as whining, but he really passionate about the scene and building something in NA. He has also put a lot of his own time and money into doing so. Much like Alex Garfield from EG or Total Biscuit, I fully expect Catz to be very grumpy about anything that is disadvantageous to his players and team. It is his job to stick up for his players and I respect him for doing so. He is doing something much harder than going out and signing the most winning Korean players an NA team. He is not as professional as someone like Artosis or JP, but the is growing to the that role and I enjoy having him on the show. A lot of what he is saying is simply fact, that the rules for WCS have made his job harder in the short term and made setting up a team house more of risk. I completely believe him on that front and starting any NA team is going to be a risk. But Catz is the only one that is willing to commit to the NA scene right now and he has earned my support for doing so. I also agree with him that the rules for WCS currently benefit Korean players who do not want to commit to playing to the NA scene. Going offline for the both the NA code and NA code S will fix this problem, because many of the Koreans will not be willing to get the work visas or pay the high taxes on their prize money. Koreans who want to come over, live in NA and play in the NA will be awesome. They can join teams, play in team leagues and generally grown the NA scene. But the current system where the Koreans can qualify and play more of the event offline and then go back to GSTL and Proleague does not help the NA scene. But this is only season 1 and it ends in June. I am sure it will be smoothed out at time goes on.
Thats why he has Yugioh and Sage now.....
Sorry but while what he is trying to do for the NA scene and his thoughts on it may or may not be good, I don't see how that is the reason he is a great show pillar . Maybe on a guest spot talking about WCS sure, but in general no. ROOT was a clan before a team and its more about making him and his friends careers in Esports rather than building up the NA scene. Not saying he doesnt deserve credit for that, but hes not exactly in the position yet to be someone trying to build the NA esports scene, like Alex Garfield or Jason Lake or Razer/Redbull. He is also about the worst person on the planet to discuss balance. And you are right, having Alex or TB on would be just as effective for that role and they are much more intelligent and well spoken. Neither of them would be particularly great "pillars" either. (TB would maybe I am a huge fan of him and his contributions to gaming).
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On April 13 2013 00:56 Plansix wrote:Show nested quote +On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays.
But Blizzard does have a lot of people experience in this area (selling digital in-game content for real money to players) and Bnet also already supports that, see in (in)famous auction house in Diablo 3, which works partially with real money. So even though it is a lot of work to do properly, it's not as if they lack experience in it and it's not as if they have to start from scratch.
And I am not talking about skins, I am mainly talking about dlc campaigns. You do not need that much bug testing for that, as it does not screw up the multiplayer part of the game.
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On April 13 2013 01:02 Irre wrote:Show nested quote +On April 13 2013 00:36 Plansix wrote:On April 13 2013 00:20 Irre wrote:
I am a big fan of JP and the show, but I really wish that they would get rid of Catz as a "pillar". The rest of the guests have achievements and credibility to their names. Catz doesn't fit well with the show at all, and is basically there to be the NA drama portion that was left out by a much better pillar Incontrol. He is a really poor replacement. QXC, Tyler, TheOgnis, Wolf, were all really great, and I would much rather see these more reasonable,rationale and accomplished people on the show. Some progamer or casting credentials would help. Catz seems more interested in promoting his team or own fame/drama rather than contributing to what makes the show so great over the years. As someone who is invested in the NA scene, I have to completely disagree with you. Catz is the guy doing to the hard job of building up an NA team and trying to get talented players the opportunity to succeed. A lot of people see what he is saying as whining, but he really passionate about the scene and building something in NA. He has also put a lot of his own time and money into doing so. Much like Alex Garfield from EG or Total Biscuit, I fully expect Catz to be very grumpy about anything that is disadvantageous to his players and team. It is his job to stick up for his players and I respect him for doing so. He is doing something much harder than going out and signing the most winning Korean players an NA team. He is not as professional as someone like Artosis or JP, but the is growing to the that role and I enjoy having him on the show. A lot of what he is saying is simply fact, that the rules for WCS have made his job harder in the short term and made setting up a team house more of risk. I completely believe him on that front and starting any NA team is going to be a risk. But Catz is the only one that is willing to commit to the NA scene right now and he has earned my support for doing so. I also agree with him that the rules for WCS currently benefit Korean players who do not want to commit to playing to the NA scene. Going offline for the both the NA code and NA code S will fix this problem, because many of the Koreans will not be willing to get the work visas or pay the high taxes on their prize money. Koreans who want to come over, live in NA and play in the NA will be awesome. They can join teams, play in team leagues and generally grown the NA scene. But the current system where the Koreans can qualify and play more of the event offline and then go back to GSTL and Proleague does not help the NA scene. But this is only season 1 and it ends in June. I am sure it will be smoothed out at time goes on. Thats why he has Yugioh and Sage now..... Sorry but while what he is trying to do for the NA scene and his thoughts on it may or may not be good, I don't see how that is the reason he is a great show pillar . Maybe on a guest spot talking about WCS sure, but in general no. ROOT was a clan before a team and its more about making him and his friends careers in Esports rather than building up the NA scene. Not saying he doesnt deserve credit for that, but hes not exactly in the position yet to be someone trying to build the NA esports scene, like Alex Garfield or Jason Lake or Razer/Redbull. He is also about the worst person on the planet to discuss balance. And you are right, having Alex or TB on would be just as effective for that role and they are much more intelligent and well spoken. Neither of them would be particularly great "pillars" either. (TB would maybe I am a huge fan of him and his contributions to gaming).
The reason you don't think Catz is a great pillar for the show is that you aren't interested in what he has to say. However, there are fans of the show that do care and want to know what he thinks about the game, events and his struggles with starting and running an NA team. Just because you aren't interested does not mean that other people not as well.
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Only thing I really have to say...
Artosis addressed this.
You CAN get to a level where youa re at least competitive in NA scene, while keeping a real job/going to college.
How many Pro's are actually spending more then 40 hours a week training? I dont think many are.
Also, Catz said that in this scenario that the skill gap will just get worse and worse and noone will ever catchup... but this isnt true.
In BW there were ...3/4 people who actually were capable of competing with Korean B-teamers. Who were they? The 4 who worked their asses off and spent as much time as they could getting better.
Idra got onto a Korean Pro team when there was NO scene in NA. People who think they "would be pro but dont have the time" i think are just lazy, and dont deserve to make it into the spotlight, cause if you thought you could/were able to.. you would.
Also Artosis hit it on the head...
The Korean scene IS WHERE IT IS, because there were loads of people who were working their asses off and scraping by, and making NO money, and even working 2nd jobs, just to support and grow their scene. And then how they got better, is they worked their asses off, and put themselves on MASSIVE training regiments...
Western scene is just sooooooooooo lazy/entitled and driven purely by money, with defeatist attitudes.
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On April 13 2013 01:07 JustPassingBy wrote:Show nested quote +On April 13 2013 00:56 Plansix wrote:On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays. But Blizzard does have a lot of people experience in this area (selling digital in-game content for real money to players) and Bnet also already supports that, see in (in)famous auction house in Diablo 3, which works partially with real money. So even though it is a lot of work to do properly, it's not as if they lack experience in it and it's not as if they have to start from scratch. And I am not talking about skins, I am mainly talking about dlc campaigns. You do not need that much bug testing for that, as it does not screw up the multiplayer part of the game.
You need bug testing for everything. Everything. And lots of it. Quality assurance is a key part of all programming. And there would need to be tons of bug testing for DLC campaigns if they were of the quality we expect from Blizzard.
And I don't think you are going to get anyone on board for anything that resembles or even can be linked to the auction house in any way. They came out at GDC and said it was at terrible idea that looked good on paper, but failed when used in the game.
And the main problem with that is staff. Blizzard does not employee any programmers that aren't working on anything. Everyone in their company is spoken for on some project. They can't just switch people over and make DLC campaigns without a ton of work. I don't know the amount of money, but its is hundreds of thousands of dollars and they aren't sure if it would get them a solid return.
Nothing in making games in easy. If you look at the Kickstarter for a single DCL character for the game Skull Girl, it was priced out $150,000. For one character in a fighting game. Making in games games just costs a shit ton of money.
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Also Artosis hit it on the head:
I dont think there is anyone in the WCS NA that Scarlett cant beat
But then Catz gave off the EPITOME of the western scene train of thought,
"Yeah but thats Scarlett"
might have been "Ya but she trains a lot, practises a lot, and works a lot harder than the rest of us"
in all honesty. She came from NA. Rose to fame from NA. Obtained a skill level that made it possible to beat koreans... IN NA.
she is the "Idra" of SC2 currently who is proving, if you arent such a lazy POS you CAN compete. But you have to work as hard as you possibly can.
I am sorry, but winners have to make sacrifices to become the best.
Hit it again,
Now western players are practising only "enough to beat other non-koreans". Seriously, NA players are still complaining about their lack of opportunities when we have nearly 100 foreign players who are Full-time pro gamers, who STILL arent working as hard as koreans... what is your excuse for not training/working hard even when you are litterally getting paid to play FULL TIME.
And Catz hit it on the head, "but most of us arent motivated by the accomplishment of self-improvement and becoming better. we care about money."
the more i watch this last SotG Catz demonstrates exactly why NA/Euro cant/wont keep up... because were just lazier in comparison to the Koreans who want it more.
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On April 13 2013 00:56 Plansix wrote:Show nested quote +On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays.
Do we actually know how profitable LoL actually is... when it was purchased by ten-cent, the price seemed quite low.
When Zynga published its 2011 results ( 1.2bil revenue, 400mil loss or 100m profit without the one-time expense) it's vas was valued at 10 billion - so about 25x more than riot.
Now if we extrapolate that would make riot's yearly revenue during Tencent takeover to about 50mil, since the userbase has doubled, we can say 100mil/year. Which is somewhere around 3-4 million HoTS copies ( with taxes, retail cut )
So basically for f2p to be better than retail sale - for starcraft - it needs a itemshop at least as lucrative as LoL on, and about 5x more users, and im not sure if going to f2p would be a superior model for starcraft even if there was good way to monetize microtransactions.
*disclaimer: i have not quite doublechecked everything, so i might be very very wrong
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On April 13 2013 01:27 MaestroSC wrote:
Also Artosis hit it on the head:
I dont think there is anyone in the WCS NA that Scarlett cant beat
But then Catz gave off the EPITOME of the western scene train of thought,
"Yeah but thats Scarlett"
might have been "Ya but she trains a lot, practises a lot, and works a lot harder than the rest of us"
in all honesty. She came from NA. Rose to fame from NA. Obtained a skill level that made it possible to beat koreans... IN NA.
she is the "Idra" of SC2 currently who is proving, if you arent such a lazy POS you CAN compete. But you have to work as hard as you possibly can.
I am sorry, but winners have to make sacrifices to become the best.
She just beat mvp in a best of 1 after how many months of training in Korea? It's not all one way or the other.
My biggest issue isn't that koreans are coming over and stealing all our money this season, though that is an issue. It's that the way Artosis explained it (and I think he's right) they'll also steal our talent. You can't be truly great in sc2 without going to korea. Catz wants that to be different, and 20 koreans mopping up the cash for season 1 that could be pumped back into NA infrastructure isn't going to get us there.
Scarlett is a North American who can beat koreans. Guess which WCS she's playing in? That tells the whole story.
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also...
LOVE Moonglade.
Literally Moonglade, is my new favorite SC2 persona thanks to new SotG.
He is literally the most awsome, positive person in the entire scene so far that I have ever heard from/followed.
Seriously he is always so positive and tries to keep it real. Never complains about being in a non-recognized scene. Never complains about being left out.
Seriously, his "Blizzard is doing something. So we should be happy about it. They dont have to do this, we may not agree with how they are doing it... but they are TRYING and they ARE doing something, they could just abandon the US scene."
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On April 13 2013 01:37 robopork wrote:Show nested quote +On April 13 2013 01:27 MaestroSC wrote:
Also Artosis hit it on the head:
I dont think there is anyone in the WCS NA that Scarlett cant beat
But then Catz gave off the EPITOME of the western scene train of thought,
"Yeah but thats Scarlett"
might have been "Ya but she trains a lot, practises a lot, and works a lot harder than the rest of us"
in all honesty. She came from NA. Rose to fame from NA. Obtained a skill level that made it possible to beat koreans... IN NA.
she is the "Idra" of SC2 currently who is proving, if you arent such a lazy POS you CAN compete. But you have to work as hard as you possibly can.
I am sorry, but winners have to make sacrifices to become the best. She just beat mvp in a best of 1 after how many months of training in Korea? It's not all one way or the other. My biggest issue isn't that koreans are coming over and stealing all our money this season, though that is an issue. It's that the way Artosis explained it (and I think he's right) they'll also steal our talent. You can't be truly great in sc2 without going to korea. Catz wants that to be different, and 20 koreans mopping up the cash for season 1 that could be pumped back into NA infrastructure isn't going to get us there. Scarlett is a North American who can beat koreans. Guess which WCS she's playing in? That tells the whole story.
Korea has absolutely no need to steal talent. Why? Because they know how to produce it.
Meanwhile, NA is discussing whether they should have tournaments with their players... because hey, the fewer you put into your infrastructure and the less you make their career a realistic possibility, the better players you get m(.
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On April 13 2013 01:32 rename wrote:Show nested quote +On April 13 2013 00:56 Plansix wrote:On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays. Do we actually know how profitable LoL actually is... when it was purchased by ten-cent, the price seemed quite low. When Zynga published its 2011 results ( 1.2bil revenue, 400mil loss or 100m profit without the one-time expense) it's vas was valued at 10 billion - so about 25x more than riot. Now if we extrapolate that would make riot's yearly revenue during Tencent takeover to about 50mil, since the userbase has doubled, we can say 100mil/year. Which is somewhere around 3-4 million HoTS copies ( with taxes, retail cut ) So basically for f2p to be better than retail sale - for starcraft - it needs a itemshop at least as lucrative as LoL on, and about 5x more users, and im not sure if going to f2p would be a superior model for starcraft even if there was good way to monetize microtransactions. *disclaimer: i have not quite doublechecked everything, so i might be very very wrong
To be successful in the F2P, you do need a massive install base. Likely much larger than what SC2 is currently. I don't know how much bigger it would need to be, but it is likely larger than most people think.
As for Riot, they are not a public company like Zynga, so we don't know how much they make. But word on the street is that they are making money hand over fist. But no one knows for how long. League is hot shit right now, but in two years people could have moved on. Now, the people at Riot are smart and are always doing things to keep their player base entertained and enjoying the game.
Also, even Riot's own player base does not understand how much it cost them to develope a single, high end skin. This is a quote from one of their lead designers on their forums today:
F0reverMiring - LoL Player
This, Im sorry, but it does not cost 10,000 dollars to make a model, skin it, retexture it and slap on some fancy animations and particles.?
Morello - Lead Content Designer
I wish it cost that little in manpower.
You should be careful what prices you quote when you don't know!"
There is a huge disconnect between the cost development and the player base's concept of how much things cost. Switching SC2 over to free to play in any way would be a HUGE undertaking and might cost more money then running WCS this year for Blizzard.
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As much as i like Moonglade for having a cool and gentle personality, i'd rather see someone who is more willing to contribute in discussions. I think that both Apollo and qxc are both vocal, intelligent, fun, knowledgable and are respected in the scene. Not to take anything away from Moonglade, but i see these two more suited for being pillars/regulars on the show overall.
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On April 13 2013 01:32 rename wrote:Show nested quote +On April 13 2013 00:56 Plansix wrote:On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays. Do we actually know how profitable LoL actually is... when it was purchased by ten-cent, the price seemed quite low. When Zynga published its 2011 results ( 1.2bil revenue, 400mil loss or 100m profit without the one-time expense) it's vas was valued at 10 billion - so about 25x more than riot. Now if we extrapolate that would make riot's yearly revenue during Tencent takeover to about 50mil, since the userbase has doubled, we can say 100mil/year. Which is somewhere around 3-4 million HoTS copies ( with taxes, retail cut ) So basically for f2p to be better than retail sale - for starcraft - it needs a itemshop at least as lucrative as LoL on, and about 5x more users, and im not sure if going to f2p would be a superior model for starcraft even if there was good way to monetize microtransactions. *disclaimer: i have not quite doublechecked everything, so i might be very very wrong
RiOT was valued at $470M in 2011. Assuming a P/E-ratio of 12 (that is quite normal, similar to ATVi's) that is equal to $40M in earnings in 2011.
Assuming LOL's playerbase in 2011 is 10 times the size of the current playerbase of HOTS, then the current earnings of Sc2 as a F2P model on an annual basis can be estimated to; $4M a year.
On the other hand, if Blizzard continues with the current approach and charges for LOTV (assuming sales of 3M copies of LOTV at a profit ratio of 20% and ARPU of $40) --> Earnings of $30M.
Obiviously F2P would be able to generate earnings over a longer time period, so the difference in future PV is less. Also this assumes that Sc2's playerbase won't increase as a result of the transition to F2P which is probably unrealistic.
To conclude, it is uanmbigious which one of those business model is the optimal from a shareholder value perspective.
IMO the best approach is some kind of middleground, where Blizzard improves their monetizaiton on the hardcore esports gamers, and monetizies casuals through a F2P model.
Getting this model correct, however, will be quite complicated and difficult, but the potential is definitely there is the right personal (MBA'ers) are hired.
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On April 13 2013 01:59 Hider wrote:Show nested quote +On April 13 2013 01:32 rename wrote:On April 13 2013 00:56 Plansix wrote:On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays. Do we actually know how profitable LoL actually is... when it was purchased by ten-cent, the price seemed quite low. When Zynga published its 2011 results ( 1.2bil revenue, 400mil loss or 100m profit without the one-time expense) it's vas was valued at 10 billion - so about 25x more than riot. Now if we extrapolate that would make riot's yearly revenue during Tencent takeover to about 50mil, since the userbase has doubled, we can say 100mil/year. Which is somewhere around 3-4 million HoTS copies ( with taxes, retail cut ) So basically for f2p to be better than retail sale - for starcraft - it needs a itemshop at least as lucrative as LoL on, and about 5x more users, and im not sure if going to f2p would be a superior model for starcraft even if there was good way to monetize microtransactions. *disclaimer: i have not quite doublechecked everything, so i might be very very wrong RiOT was valued at $470M in 2011. Assuming a P/E-ratio of 12 (that is quite normal, similar to ATVi's) that is equal to $40M in earnings in 2011. Assuming LOL's playerbase in 2011 is 10 times the size of the current playerbase of HOTS and we are considering the decision on whether to make Sc2 f2p from today on and making all expansions F2P that implies Sc2 can make; $4M a year on F2P. Assuming sales of 3M copies of LOTV at a profit ratio of 20% and ARPU of $40 --> Earnings of $30M. Obiviously F2P would be able to generate earnings over a longer time period, so the difference in future PV is less. Also this assumes that Sc2's playerbase won't increase as a result of the transition to F2P which is probably unrealistic. To conclude, it is uanmbigious which one of those business model is the optimal from a shareholder value perspective. IMO the best approach is some kind of middleground, where Blizzard improves their monetizaiton on the hardcore esports gamers, and monetizies casuals through a F2P model. Getting this model correct, however, will be quite complicated and difficult, but the potential is definitely there is the right personal (MBA'ers) are hired.
I think the "getting the model right" is what is holding Blizzard back on this one. I don't think there is anyone who has the f2p nut cracked and knows exactly how to turn a game from a retail box to free to play. I also think there is a reluctance to staff up to do so. It very clear that Blizzard is working on a replacement for WoW in the titan project and I don't think they have anyone they could "throw at the project", which would be huge. They would need to build the system and interface to buy the "products", find out what those "products" are and market the change to the general public(ie, not TL). I think it is to much investment when they can just make LotV and put a bow on SC2.
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Does LoL have a microtranscation shop that has models created by users and not just riot? I have a feeling Valve make even more from microtransactions (revenue not gross) because most of the dota 2 models are community made and voted, and then sold in the valve shop.
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On April 13 2013 02:10 crms wrote:
Does LoL have a microtranscation shop that has models created by users and not just riot? I have a feeling Valve make even more from microtransactions (revenue not gross) because most of the dota 2 models are community made and voted, and then sold in the valve shop.
Valve makes money off of Steam and selling games on Steam. That is how they fund Dota 2 and TF2, which are free, but require you to install Steam. The amount they make off the steam shop for Dota is unknown, but it is less than what Riot makes on LoL(otherwise, that is all they would be doing). Also, many of the skins that Riot sells are more complex that the "additions" that you can get for Valve. Both are interesting models, but Dota2 flat out cheats when it comes to funding, since it is can be argued it is funded by sales of Tomb Raider and Bioshock Infinite.
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I think if the Koreans WCS NA players don't just travel off one weekend but instead move to NA for extended period of time, it will really be positive. They will lose their infrastructure benefits by leaving Korea so sooner or later they will have to set up their own teamhouses.
Maybe initially that won't happen because the Koreans will play from NA. But i believe since WCS NA is so important and that foreign teams can afford to send their Koreans to NA, eventually the Koreans will move. Otherwise how can they compete with Koreans in NA.
To put it in a very simplified way. Say Taeja plays from Korea against Polt in WCS NA. They are very even in skill but Taeja can't win because of delay. Without WCS, there is essentially nothing in Korea. So Taeja asks to move to NA for next season because it will improve his chances. The same probably will happen till at least the EG + TL Koreans move to NA. Then they will bring their coaches. Eventually, some EG new blood like Suppy will join the EG house which has become a full fledged teamhouse equivalent to Korean infrastructure with coaches and pro routine. Thus Suppy can enjoy infrastructure and training benefit equivalent to KR without going to Korea.
It can backfire in many ways of course but i think that is the intention of Blizzard in "forcing" the exodus. To eventually initiate culture/knowhow/skill transfer from KR to other regions. Then the next wave of progamers from NA/EU will benefit because there will be a lot of academies/teamhouses that can train them.
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On April 13 2013 02:09 Plansix wrote:Show nested quote +On April 13 2013 01:59 Hider wrote:On April 13 2013 01:32 rename wrote:On April 13 2013 00:56 Plansix wrote:On April 13 2013 00:40 JustPassingBy wrote:
Whenever people compare Sc2 to LoL and note how Riot has the superior business model to Blizzard due to the micro transactions, I always ask myself one thing: Why isn't blizzard now implementing the "custom map" market, which they announced for past LotV? They could offer purchasable campaigns and maybe even use the existing Sc2 novels as a basis. The model isn't superior, it just makes more money now. Blizzard has been around for a lot longer than Riot and has a proven business model as well. A lot of people think a game can just switch over to free to play with micro transactions, but the game needs to be programmed with that in mind. You also need a whole group of staff devoted to building skins and other DLC that can make the game profitable. And that stuff costs money and it’s a lot more than people think. A solid skin that looks different than the original can cost $10,000 or more in man hours to make. People think this is insane, but even if it was only 3 people working on a single skin, each paid 48K a year, a single month on a skin can add up fast. Then you add in quality assurance and bug testing and the cost goes up from there. The same goes for designing any kind of market place. The investment cost is very high, but they are not sure there is a return on the amount they would invest. None of this stuff is easy or can be changed over quickly. I am glad that Blizzard is sticking to what they do and not chasing Riots success. There is to much of that in video games now adays. Do we actually know how profitable LoL actually is... when it was purchased by ten-cent, the price seemed quite low. When Zynga published its 2011 results ( 1.2bil revenue, 400mil loss or 100m profit without the one-time expense) it's vas was valued at 10 billion - so about 25x more than riot. Now if we extrapolate that would make riot's yearly revenue during Tencent takeover to about 50mil, since the userbase has doubled, we can say 100mil/year. Which is somewhere around 3-4 million HoTS copies ( with taxes, retail cut ) So basically for f2p to be better than retail sale - for starcraft - it needs a itemshop at least as lucrative as LoL on, and about 5x more users, and im not sure if going to f2p would be a superior model for starcraft even if there was good way to monetize microtransactions. *disclaimer: i have not quite doublechecked everything, so i might be very very wrong RiOT was valued at $470M in 2011. Assuming a P/E-ratio of 12 (that is quite normal, similar to ATVi's) that is equal to $40M in earnings in 2011. Assuming LOL's playerbase in 2011 is 10 times the size of the current playerbase of HOTS and we are considering the decision on whether to make Sc2 f2p from today on and making all expansions F2P that implies Sc2 can make; $4M a year on F2P. Assuming sales of 3M copies of LOTV at a profit ratio of 20% and ARPU of $40 --> Earnings of $30M. Obiviously F2P would be able to generate earnings over a longer time period, so the difference in future PV is less. Also this assumes that Sc2's playerbase won't increase as a result of the transition to F2P which is probably unrealistic. To conclude, it is uanmbigious which one of those business model is the optimal from a shareholder value perspective. IMO the best approach is some kind of middleground, where Blizzard improves their monetizaiton on the hardcore esports gamers, and monetizies casuals through a F2P model. Getting this model correct, however, will be quite complicated and difficult, but the potential is definitely there is the right personal (MBA'ers) are hired. I think the "getting the model right" is what is holding Blizzard back on this one. I don't think there is anyone who has the f2p nut cracked and knows exactly how to turn a game from a retail box to free to play. I also think there is a reluctance to staff up to do so. It very clear that Blizzard is working on a replacement for WoW in the titan project and I don't think they have anyone they could "throw at the project", which would be huge. They would need to build the system and interface to buy the "products", find out what those "products" are and market the change to the general public(ie, not TL). I think it is to much investment when they can just make LotV and put a bow on SC2.
Well my suggestion has always been to hire MBA'ers and let them figure out stuff and come up with various suggestions (rather than rearranging staff on an internal basis). I think paying $500k to a couple of MBA'ers is a worthwhile investment as chances are that they will be able to find ways to improve shareholder value.
I mean logically it doesn't make sense that casuals who just play the campaign or a couple of custom games once a month pays the same price as someone who "devotes" their life to the game. So there is definitely room for improvement, but getting the solution correct will be challenging, and I don't think Blizzard currently (as you imply) have the ressources to get it right.
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On April 13 2013 01:14 MaestroSC wrote:
Artosis addressed this.
You CAN get to a level where youa re at least competitive in NA scene, while keeping a real job/going to college.
How many Pro's are actually spending more then 40 hours a week training? I dont think many are.
To add to this, it's 100% doable to hold a full time job, get 8 hours of sleep every night, and still train over 40 hours/week at SC2. If you're dedicated, you could do that and hit 60 hrs/week. All of it depends on how much you're willing to sacrifice.
On April 13 2013 01:14 MaestroSC wrote:
The Korean scene IS WHERE IT IS, because there were loads of people who were working their asses off and scraping by, and making NO money, and even working 2nd jobs, just to support and grow their scene. And then how they got better, is they worked their asses off, and put themselves on MASSIVE training regiments...
While Catz's point on this is true, that they didn't have to compete with an already established scene elsewhere, it ignores the fact that they *built* the scene. Catz, Artosis, Moonglade, and this site would not exist if it wasn't for their hard work a decade ago. Everyone in esports is benefiting from what they accomplished. And so complaining that "things aren't fair" to me is a fairly weak argument. Life isn't fair, deal with it.
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EPT
