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Virilneus’ GS4 Idea Book » An Open Letter to Simutronics

Virilneus’ GS4 Idea Book

August 7, 2008

An Open Letter to Simutronics

Filed under: Uncategorized — Virilneus @ 6:18 pm

One doesn’t have to look far to see far more successful games out there, I am surprised you’re not doing more to emulate them, your business model stinks.

The hard costs of running an IT business have dropped by ridiculous amounts since GS3 launched, but prices have been steadily rising since the move to the web. Bandwidth is cheaper now, hardware is cheaper, and skilled employees are cheaper. There is no longer a shortage of IT workers.

You, as a company, need to hire more people with business degrees. Does anyone with an MBA work for Simutronics? I would be very surprised if they did, you seem to hire programmers or fans and eventually through seniority they end up in a position like project manager with what experience exactly? What training? (no offense to any former or existing PMs, but lets be honest here).

If you did have such people working for you, I think they would tell you what I am telling you now.

You need to sit down and figure out what your fixed costs are, and what your variable costs are. Your fixed costs are the costs it takes you to run your business regardless of the number of customers you have. Your variable costs are what it costs you to serve your customers. Your fixed costs do not go up when you add more customers, your variable costs do. So what you need to do is figure out the incremental variable cost for each new customer, what does it cost you to serve one additional customer.

Then that has to be the point at which you work on pricing.

Your pricing model stinks. The ideal business situation is where you charge everyone exactly what they’re willing to pay, optimum pricing. A common example is that if you’re selling hotdogs on the street and someone is starving and has $10 in their pocket, they may be willing to spend $10 on one hotdog, someone else may merely be looking for a snack and not think it is worth it to spend more than $2 for something on your cart. If you can charge the first guy $10 and the second guy $2 you’ve hit optimum pricing. You lose no revenue by under pricing, and lose customers by over pricing.

You guys do fine with the $10 people, but you do crap with the $2 people. Your game is just too expensive for some people, I’m not one of them, I go to every pay event and have multiple premium accounts, but some people can’t afford it. This is where knowing your incremental variable costs comes into play. If you can service a new account for $1, why not only charge $5? Better to get $5 for a customer than $0 because they don’t play.

Many, many, many, many, many games, software providers, and other online services make money with a free basic level of service and then charging for upsells. You get someone using your service and you nail them on the upsells. Get them addicted, them charge them for more features. That is a business model.

You could, indeed, have a free level of service subsidized by incentivized affiliate programs. Allow people to play for free if they complete enough affiliate offers through an incentivized affiliate network. In your affiliate links you pass a unique identifier for the customer account, in the reports that is passed back to you. The software portion of tracking such things is as such very very simple. There are free websites out there that make seven figures monthly off of things like this. It isn’t small potatoes.

For free or cheaper ($5) levels of play I would recommend limiting to 1 character per account, and forcing them to stay in a player start city. No traveling. To travel, they have to buy the upsell. Also, no type ahead lines, a weaker assist queue, etc. Maybe even a lower character item limit to encourage those who would merely use them as lockers to buy the upsell.

You also need a realistic referral program. Your best method for gaining new customers is referrals from existing customers. Do you even still have that ridiculous referral program? Everyone who refers someone in a month gets their name entered into a hat for a free alteration? Ohhh… a chance at a free alteration, that’ll get me to push this game on my friends.

It costs you nothing (nearly so) to give away free premium points for referrals, not just to “the lucky winner” of the monthly raffle, but to everyone who refers a paying customer to you.

Give everyone who refers a friend 100 (or more) PPs if the friend continues playing after their trial. Give them 10 pps per month for every month their friend remains a paying customer. How hard is that? Now only do you then encourage people to refer their friends, but you encourage them to make sure their friends stay active, they give service beyond the sale. Maybe 100 pps for a referral, 100 more when they end their free trial, 100 more at 6 months. Then 10 a month after that.

Finally, your free trial needs to be longer, 90 days. You should know your own game and you should know that the single cause for people continuing to play is attachment to the character they create. You can build 3x more attachment in 90 days than you can in 30. For necessary reasons do not allow transfers of characters off of free trial accounts, or accounts less than say 6 months old, unless it is a premium account.

Understand this, your eggs are gradually going into fewer baskets, and that is not desirable, you want a large customer base, broad bases are stable. Understand that interaction and communication are one of the main draws of this game, and having more players increases opportunities for those things, for everyone. Understand that many areas of the game seem like ghost towns because of the low population, and that such things encourage other people to quit, which results in a spiraling problem that has gotten out of control.

Gemstone does not have to die, you’ve survived passed the dawn of graphical competition and are still here, but you need to make changes.

14 Comments »

  1. Send that to:

    dw@play.net
    David Whatley - He runs the place.

    Comment by Player — August 10, 2008 @ 1:02 am

  2. You make a lot of assumptions here. Also, your grammar and punctuation is terrible. You’re ranting, but to no concievable end. I doubt you’ve ever heard of the Zendik’s, but they have a motto - stop bitching and start a revolution.

    Comment by Amused — October 21, 2008 @ 11:47 am

  3. You make valid points, and I agree. They really aren’t doing all that well…. they just aren’t that satisfying. It’s hard to get new customers to join their game when there are a bunch of prettier games out there. WOW has the same price–$15 a month. How can they compete with that?

    Comment by Liza — November 20, 2008 @ 6:17 pm

  4. Grammar and assumptions aside, he’s right. Simutronics is not marketing their games the way they should be. They do not advertise. Their incentive packages are a pathetic and they are not thinking of their target consumer groups whatsoever. I’ve played for 11-12 years because when I started their pricing was cheap and the game was fun. I had two accounts at about $8 a piece. When pricing jumped to $15 I cancelled an account. Now they get less money out of me than when they had cheaper pricing. I would like to see some numbers of how many accounts were cancelled shortly after the price change. I also agree that a large percentage of gamers never are even willing to try Gemstone because they know that even if they do like the game at the end of the month, they are going to have to pay $15 to continue with the character they have worked so hard to develop. It is not worth it when they can go play a game like WoW or a free MMORPG of the same quality as Gemstone.
    Hero’s Journey is a perfect example of Simutronic’s lack of marketing skills and capability. This game was supposed to be released in 2005? And now three years later the game is likely going to be outdated before it ever is released. The only thing that has kept the company afloat at all is that they have good ideas when it comes to character development and have been travelling around marketing their Hero client instead of trying to retain the loyal customers they already have.

    Comment by Player of Strydyr — November 24, 2008 @ 9:04 pm

  5. Bravo.

    I recently decided to see about resurrecting my old Dragonrealms character.

    2 major problems with simu’s service:

    1. no advertising
    2. the basic service ($15/ mo now?) sucks. you really need the premium service ($40/mo) for the vault space. you Just can’t hoard your goodies without the vault.

    They need to drop the price to $15/mo for premium access. Platinum access should be discontinued. It was a good idea when they had 1200 people online.

    I would suspect that their customer base is people like you and me who remember muds and who have actually read more than one book because we wanted to read it, not because it was part of a literature class.

    I have spent the morning trying out World of Warcraft and honestly… it sucks compared to Dragonrealms. Totally, totally sucks.

    But… it’s only $15 / mo and most teens parents and working gamers don’t have a problem with $15 / mo. But $40????? come on. That’s a bit much. Running a mud doesn’t cost that much. Get fans with talent to develop new areas.

    I sadly have decided against starting my account again because $40 / mo for a game is honestly just too much these days.

    I wonder how many people born between 1980 and 1990 they actually have on their accounts receivable list.

    It’s really sad too because DR + gemstone too from what i hear are two of the best total immersion games ever produced.

    Comment by Former Simu Customer — November 26, 2008 @ 10:21 am

  6. Ah, and if they offered 30 days free for accounts that have been dormant for over 6 months (mine died in 2005), i would probably play again and get hooked….

    Comment by Former Simu Customer — November 26, 2008 @ 10:22 am

  7. I’ve got to agree.

    I don’t pretend to know exactly what the operating costs for Gemstone IV are, and what it costs in resources and man-hours to support one additional player — but I’ve got to think that $15/month provides a pretty comfortable profit margin that they can afford to take hit on, in an effort to reap greater profits.

    I personally think the cost of a basic account should be reduced to $10/month. Simu can argue that the value that GS4 offers is on a par with any a major graphical MMO, but I’m sorry, the marketing that’s necessary to sell that idea hasn’t been done, and most people just aren’t going to see it (especially while cosmetically similar MUDs are out there, which are completely free). As such, the price is going to be off-putting to any new player, regardless of how much trial time is offered.

    Whether or not the price is reduced, a basic account should certainly include more than one character slot (three would be about right). The fact that you can’t experiment at all with different races/classes without abandoning your current character (or paying extra) has got to be a huge turn-off to many players, especially those accustomed to being able to experiment without limit with different races/classes in games like World of Warcraft. By seemingly failing to even approach the status quo in that area, Simu just ends up looking stingy, and leaves the impression that it will bleed the customer of every possible dollar. The fact that Simu asks $50/month for a Platinum service that isn’t even all-inclusive (considering ticketed events and other miscellaneous services that must be paid for) won’t do anything to dispel that impression, and will seem audacious and ridiculous to the uninitiated. Not a good first impression.

    My point here isn’t that GS4 is a bad value — that’s in the eye of the beholder. Though speaking for myself, I’m not so sure that I see that it is such a great value, and I am a former premium subscriber, SimuCon attendee and Mentor (who really enjoyed “selling” the game to new players by helping them find and experience what makes the game so great and unique). My point is that regardless of the actual quality of the game, it will LOOK like a poor value to most prospective players unless Simu does a much better job of pitching its product, and part of that pitch could and probably should involve strategically improving the value of a basic account in the aforementioned ways.

    A better incentive program would certainly couldn’t hurt, nor would a longer trial period as you recommend. 30 days isn’t so horrible (it’s longer than the trial period offered by most games), but for a game that is as complex, daunting and alien as GS4 is to many new players, that extra time is demanded due to the steeper learning curve. Before a player can grow too attached to her character, she must first become at least somewhat comfortable with the game, and reaching that comfort level takes at least a couple weeks for many people, I’m imagining. A 90 day trial would be nice, but I think that “just” a 60 day trial could go a long ways towards improving retention, as a more moderate proposal in that area.

    Another thing Simu needs to do is to make itself more tempting to ex-players. If there is any promotion that allows ex-players to come back and play for free for a while, I don’t know of it, and I’ve looked. Perhaps Simu ought to do what WoW does with its “resurrection scrolls” — combine an incentive program for current players with an incentive for old players to return. I really can’t fathom why this isn’t being done now, or if it is, why it’s not better advertised on the GS4 web site. If Simu isn’t going to be aggressive in market.

    When I think about GS4, I get bummed out. I had so many good times in the game, but whenever I think about returning and start up a trial account, it seems like a ghost town. As far as I can tell, very few of the people that I used to run with play anymore. Attempts to get back into the game just end up feeling futile … it just ends up being a vaguely disappointing trip down memory lane. Nostalgia isn’t enough to make it worth my time and energy, nor are the various mechanical improvements that I’m sure Simu has made since I stopped playing. What I think the game needs is fresh blood — both new and old.

    Comment by Tukka — December 22, 2008 @ 3:45 pm

  8. I have proof somewhere that there was a google ad for gemstone. It popped up in my friends email (you know wherever those ads are at the top)…

    Comment by whoamiagain — April 2, 2009 @ 10:03 pm

  9. You know, I started playing Gemstone when I was 13, yeah, sure I dont have the history that allot of the players that *used* to play have, but I had the interest. I quit playing for a few years, and had the sudden urge to resurrect that few hours of amusement….we all know what that few hours really was *more like 7-10+ hours if i wasnt busy*. I came back, and was extremly dissapointed. I was one of those consistant PvP folks, but I also believe if I’m paying 40 bucks a month, I got the right to hack a few folks with loose lips apart.

    They allow people to talk all they want, highly against pvp, 90% of the people playing now either buy toons, sell toons, or use multi-accounts to speed level or for PvP, be mouthy, arrogant, rude, slutty, etc. 12 frickin years of gametime and loyalty to simu, and its just not worth that 40 anymore. I could care less about the marketing for the company, the less idiots playing the happier I was. This is why I will probably never return to simu, unless of course they actually do come out with heros journey, I might attempt it. If its ran in the same manner as GS though, I think I’ll stick to clicking my heels together waiting for diablo III. Atleast Blizzard knows how far they can push. Hrmph!

    -Tarkah, Rypin, Chronix, Snoogle, and a few lesser ones.

    Comment by Tarkah — September 4, 2009 @ 9:29 pm

  10. Agree completely. Though as I understand it, Simu has made some sales of their engine to some major development studios, but the engine was developed on mostly pro-bono work from players/staffers. Having talked to a few former GM’s, I know their pay has fallen very very significantly from 1995-2009, so I get the impression that David Whatley has in some ways used gemstone and dragonrealms as tool to gather extremely cheap human resources to work on the engine, which he can then sell. HJ I doubt will ever come to be, simply because if hes making money just selling the engine, why put all that time and money into graphics, game design, etc? Its an extremely competitive market now with all the free to play mmo’s so maybe hes just decided to not ever complete it. But if they can keep moving coders from GS and DR to “work” on HJ (in a compartmentalized sense working on aspects of the engine). Then Whatley has got super cheap coding staff building engines for him which he hocks and makes I assume a great deal of profit from. This is all speculation, but in looking at how little effort is put into their games that actually exist and actually have players who are crying out for more content and better management, I dont think the conclusion is too absurd.

    Comment by Calvix — September 29, 2009 @ 10:35 am

  11. Buy Traffic…

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    Trackback by Buy Traffic — June 11, 2010 @ 6:47 am

  12. Its so sad that Dragonrealms just is going to continue to die away with circle 150 players and no newbies. 8( I can’t afford $40 / month to play.

    Comment by Alexander W Smith — October 10, 2012 @ 10:07 am

  13. Simu just came out with 3.0 for DR and microtrans. Unfortunately, it is a bomb. Players are all over the boards complaining of major bugs and over sites without a word from GMs. Oh wait, that’s a lie they just announced a new verb “facepalm”. That should be a warning to all the old players thinking about coming back. It’s still to “soon”.

    Comment by ByebyeDR — February 23, 2013 @ 11:10 am

  14. DR is dying, no doubt about it. The powers that be simply refuse to listen to their customer base. You basically have two group playing now — circle chasers and heavy RPers. Neither is satisfied. The whole 3.0 magic thing busted and now there is 3.1 coming out and basically no one cares. 75% of the player based could give a rat’s @ss about the magic. When you read the boards it is obvious players want more events sponsored by GMs and more individual guild oriented development. And yet the reply is always the same, “We have to get the new development for the overall game first and then we can devote more time to .” There simply are no guild gurus left. It’s all about some geek sitting at a desk crunching numbers …. no imagination whatsoever.

    Comment by Ireland — March 29, 2014 @ 7:06 pm

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