The Commercialization of Home
“Whoever originated the cliche that money is the root of all evil knew hardly anything about the nature of evil and very little about human beings.”
–Eric Hoffer
Oh, let’s go for it.
Home’s trying to make money. Home is a for-profit enterprise. So why, then, is there a growing amount of pushback against this on the Sony forum and elsewhere? Why the cries of Home somehow losing its soul, or Home attempting to price-gouge, or Home losing its appeal?
Home’s just all about making money now, goes the general sentiment. They don’t care about us.
I apologize if this next statement forces me to quote Captain Obvious, but when has Home ever been about something other than making money? Was closed beta run by a bunch of Trotskyites?
I’m going to do my best to examine this social issue, and why people might be feeling the way they do. I kinda snapped during Episode #17 of The Upload and had a cathartic rant on this subject, but it is a subject which should be addressed.
My personal guess on this subject: I don’t think people truly begrudge Home making money. I think it has much more to do with the public perception of how they’re doing it.
One of the things that amazed me, when I first set foot into Home, was that it was free. I fully expected it to be a subscription service, much like any number of MMO games out there. And, quite frankly, Home’s lack of any economic barrier to entry is possibly my greatest criticism of it: because when you invite the masses, and they have no skin in the game, you have no incentive for good behavior. Human beings respond to economic incentive; if you pay even a nominal amount of money to be a part of something, you are less likely to risk losing it.
(Home sometimes reminds me of the infamous Altamont concert with the Rolling Stones. Would 300,000 people have shown up if it wasn’t free? Probably not. However, would it have had multiple deaths, injuries, vandalism and property damage, resulting in a massive PR nightmare for nearly all involved? Likewise, probably not.)
Would there be the same number of people in Home trolling, harassing, merging, freezing and otherwise behaving inappropriately if they had to pay to access the service? Doubtful. Hence why venues — be they hotels, restaurants, etc. — price their experiences based on what the market will bear and what social strata they wish to work with. The odds are much lower that you will encounter a pack of unruly people behaving like animals if you dine at Nobu, for instance, than if you go to a fast-food outlet at a strip mall on the wrong side of town.
This is not an elitist statement. This is basic behavioral economics.
There is specific business logic behind why Home is free, however. Prior to Home, no one had ever tried a virtual-reality social network for gamers on a console before — so there really was no way to put together a pro forma on what to expect. How do you set advertising rates, for instance, if you have utterly no idea how many people will be using your service, and you don’t really have much in the way of revenue-generating commodities to offer? Hell, you’d have to give away the house for months — years — just to build up a repeat user base…
In broadcast television, advertisers buy time based on anticipated audience numbers. Television, as wonderfully entertaining as it is, exists for only one reason: to sell you stuff. Television does not exist to enrich your life, educate you, or perform any other such noble functions; it exists purely as a method of advertising commodities to a broad spectrum of consumers. The entertainment — your favorite TV show, for instance — exists solely because the broadcaster and its syndicates believe they can sell advertising time to third parties. Because, after all, who’s going to sit and watch a bunch of advertisements unless there’s some entertainment to go with it?
Thus, back to Home: who’s going to participate in a social network for gamers and subject themselves to developer-created advertisements — particularly in the early days, with few sources of entertainment other than socializing with each other? Do you see now why there’s more of an emphasis on games for Home? Ferchrissakes, I’m the head of a publication which shouts at the top of its lungs for social improvements to Home, and even I get it. If there’s more stuff to actually do in Home, you might actually want to spend more time enjoying the social experience of Home. Just as you’ll sit through eighteen minutes of advertising for forty-two minutes of entertainment per hour of television. Home, in its early days, could easily feel like forty-two minutes of advertising for eighteen minutes of entertainment. Hence why it has such a bad rap to its target audience — gamers and the gaming media — and why it’s taken years to figure out that maybe, just maybe, they ought to try some target marketing.
Are there other methods of revenue generation from television? Absolutely. The BBC, for instance, has no advertising and is free from commercial interests — but it’s largely paid for directly by the population of the United Kingdom. The money’s gotta come from somewhere.
So: how different do you think Home would look, for instance, if it had started with a subscription model? I’d personally wager it’d be vastly different experience — probably one which a lot of us would welcome. Imagine a Home with a smaller — and, on average, more civil — population, where the developer had less incentive to worry about selling The Next Big Thing every week because they had a guaranteed revenue stream?
But since that’s not the case, we have Home as it presently exists: a giant melting pot of humanity with very little incentive for its citizenry to behave properly and content developers who need to rely predominantly on the relentless push for more and more commodities to maintain any semblance of a consistent revenue stream. Our anti-capitalistic stance has created this mess, not the developers.
Stop waving your arms like that. I’ll get to your side of the story momentarily. But first I’m going to ask you to put yourself, for a moment, in charge of Home. How do you guarantee maximum exposure to your commodity, so that you can entice content developers to create products and services for it? You make it absolutely free to access. Thus, there is no barrier to the seventy-seven million registered PlayStation Network users to click on it and try it out, or revisit it at any point in time they wish.
Now, if I’m a prospective advertiser or content developer, the idea of developing content for Home seems very lucrative. Let’s use the Pareto Principle — also known as “the 80/20 rule” — to figure out how big of a target audience I’ll probably reach. Of the seventy-seven million registered accounts, twenty percent of them will click on Home. That’s fifteen-million, four-hundred-thousand users. Now assume that twenty percent of them decide to periodically revisit Home. That’s three-million and eighty-thousand people, in terms of total transient population — of which twenty percent, or six-hundred-and-sixteen-thousand, would be the core active repeat-user base.
If we assume Home has an active user population of 616,000 people, let’s now further apply the Pareto Principle to figure out where the consumer revenue is coming from. If twenty percent of Home’s active population actually spends a dime on Home, that’s 123,200 people who, at some point, actually put a few quid into the thing. However, buying patterns can be erratic; you’re never going to have everyone purchasing everything. SodiumOne, for instance, is generally considered to be Home’s most visited game, yet what percentage of the active user population played it, and what percentage of them spent the extra bucks to unlock all of its levels?
Home devs hard at work figuring out the next Egregiously Commercial Evil Plan(tm)
If we use the Pareto Principle once again, that means that the approximate number of hardcore repeat spenders in Home is approximately 24,640 people. And how many of them will you actually reach with any particular commodity that you develop? A really hot, universally-lauded commodity might reach eighty percent of the target audience — approximately 20,000 people. A typical deployment, using the 80/20 rule, would probably average out around 5,000 transactions from a total active population of 616,000 users.
(By the way, I should probably point out: I have utterly no clue if my data numbers are accurate or not. I could be wildly off. It’s just that I’ve worked in resort development for nearly a decade, with emphasis on sales and marketing, and so using metrics to quantify ROIC based on selling “experience” products is nothing new to me. If you think of Home like a direct mail campaign, figure that you’re only going to get a tiny fraction of people to respond and spend money. So you need to go broad first, build up the consumer base, and then go deep.)
So. Now we have a hypothetical baseline to work with, in terms of measurable consumer data, as to how many users might see my advertising and how many of them are likely to actually purchase my commodities. I can thus budget my costs appropriately. And then I can figure out pricing strategy.
Think like an entrepreneur for a moment, gentle reader. If your business sustains itself based on revenue generation out of Home, then all you really care about is the consumer data laid out above. How many people can you advertise your commodity to, how many of them can you sell it to, and what do you need to charge to get your return on invested capital?
Everything else, quite frankly, is just background noise.
The individuals who populate the Sony Home forum and the panoply of fansites constitute some of Home’s most avid long-term users. We are one source of direct market research. Yet we must be mindful of the fact that although we have been in Home for some time, and likely spent quite a bit of money on the service, we are perhaps on the far end of the bell-curve. And, were I Sony, I would have one question at the back of my mind:
Are there enough of them?
There are two ways to generate revenue: go deep or go broad. Going deep means targeting your clients who spend the most amount of money the most consistently, divining what motivates them to spend money, and then giving it to them as long as you can. Going broad means spreading the net as wide as possible to capture as many people as you can. The danger of going too broad is that you dilute the perception of your exclusivity and risk making your core audience feel unimportant. The danger of going too deep is that you might have too narrow of a market to survive on.
I’ll give you a firsthand example of this. As I mentioned earlier, I’ve worked in resort development, sales and marketing. One of the hotel brands that hired me was Ritz-Carlton. You’ve all heard of Ritz-Carlton. You all mentally associate the brand with luxury nonpareil.
What you’re probably not aware of, unless you follow the hospitality industry, is that Ritz lost a tremendous amount of market share to Four Seasons and Starwood — because their appeal was just too narrow. They were very, very good at deep marketing: they built up a loyal core group that wanted a specific experience and gave it to them with a precision that’s unbelievable. However, as market conditions changed, they found themselves looking antiquated compared to their competitors, who offered the same level of quality but with broader market appeal.
So, as a result, Ritz-Carlton took the ultimate gamble: they risked losing their core audience and reinvented themselves. Because they had to.
If this sounds eerily familiar to what Home is going through, that’s because it’s almost exactly the same. Home’s going broad instead of deep — because they have to.
(I suggest you stop and read a fantastic article on this subject from Travel + Leisure — http://www.travelandleisure.com/articles/reinventing-the-ritz-carlton — before we continue. No, really. You’re going to want the full context.)
Home, in nearly three years of open beta, has built up a core audience. It gave away the house to do it. It has plenty of market data to examine and infer consumer patterns from. And now it’s broadening its horizons. As it should.
Think about it. What kind of competition does Home actually have? Second Life? IMVU? Twinity? Kaneva? Entropia? Those are all PC experiences. Sony’s up against Nintendo and Microsoft, neither of whom presently offer anything like Home (although that may be slowly changing) in the console gaming universe. If there was ever a time to broaden Home’s audience, it’s now.
Home’s greatest strength, as far as I can see, is that it’s a platform. Which means that it can offer a multitude of different experiences, all within the same umbrella. And why not? There are 77,000,000 registered accounts with PlayStation Network. If my math is anywhere even close to being correct, then Home as a service has a fairly small active user base that actually spends money with any consistency. It’s time to broaden the horizon.
To quote an excerpt from Steve Yegge’s now-infamous rant: “Google+ is a knee-jerk reaction, a study in short-term thinking, predicated on the incorrect notion that Facebook is successful because they built a great product. But that’s not why they are successful. Facebook is successful because they built an entire constellation of products by allowing other people to do the work. So Facebook is different for everyone. Some people spend all their time on Mafia Wars. Some spend all their time on Farmville. There are hundreds or maybe thousands of different high-quality time sinks available, so there’s something there for everyone.”
This, to me, is what Home should be. Some people will spend all their time in Home playing SodiumTwo. Others will spend their time dancing in the Hub. Many will define Home simply as a place to meet their poker pals. And this is as it should be: Home as a vibrant, sprawling community, with broad-spectrum appeal to generate revenue from as many sources as possible.
Will Home’s core audience — the ones who were there since the early days, some of whom now rail, daily, against Home’s expansion in Sony’s own forum — abandon Home as a result of these changes? Doubtful. And for one very specific reason: there really isn’t anything else like it out there. You might feel like Home hasn’t lived up to its original concept — god, if I hear one more rant about a “trophy room” — but the reality is that there isn’t anywhere else to go.
And here’s the catch-22: let’s say you do leave, and take your money with you. You’ve just added to the argument for a broader market base, not a deeper one. You can boast all you like about how much money you’ve spent in Home, but that’s past-tense.
I’m going to try to outline some of the most common objections to Home’s commercialization and see if there’s any validity to them.
1. Developers are getting greedy. Personal estates, clothing and other commodities are more expensive than they should be.
Look, I’m all for Keynesian economics, but even Ken Galbraith would have a hard time defending this statement. Home is a free market; no one is holding a gun to your head and telling you to spend money on anything. Developers are in business to make money off of us by creating commodities we want to purchase; if they fail to deliver attractive commodities, or they price their wares above what the market will bear, they will quickly find themselves out of business. So it’s not like they have an economic incentive to hyperinflate their prices until Home turns into a digital Weimar Republic.
The real objection, I think, is twofold: that pricing for some hot commodities is more aggressive than it was in the past, and that people are scared of being priced out of the market.
An interesting example of this might be found with the Lockwood MechJets. Home’s population is comprised predominantly of young males, and there are very few things that young men like more, aside from Jessica Chobot and incoherent music performed by people with too many piercings, than transforming robots. It’s sort of built into the genetic code, I think.
Given the added functionality of the MechJets, I think everyone sort of expected it to be a higher-priced outfit. But I doubt anyone was expecting it to go for ten bucks. That was certainly an aggressive pricing experiment. And thus is raised a value proposition: compared to the average price of typical Home clothing items, was it worth it?
This was further compounded when the MechJets were initially released and a pricing error allowed some lucky people to acquire the same outfit for three dollars instead of ten. And my god, did the Sony forum explode. I haven’t seen that much capslocked verbiage since the last time I watched a Sully Sullivan infomercial. And that’s what got me thinking: was it really about the high price, or was it instead about people worrying about looking like lower-class citizens if they didn’t have the latest and greatest toys?
I don’t know what kind of anarcho-socialist fantasy people have about Home, but why are some people personally insulted by a developer trying to make more money? I find the Gold Suit, for instance, to be an incredibly gauche piece of trash. Aesthetically, it has the same appeal to me as William Shatner’s singing career. But the harsh reality is that its high price meant it generated quite a nifty ROIC. Am I to begrudge the developer for looking at the balance sheet and deciding to act accordingly?
I’ve also seen the charge that developers are trying to create different social classes in order to drive sales. This is equally silly. You could make every single commodity in Home absolutely free, and people would still segregate into different social classes. People who glitch the benches. People who use proper grammar. People who use certain colors for their text bubbles. The list goes on.
Is America Home more blatant about this than the other Homes? Yeah, probably. As Cubes has pointed out in the past, Europe doesn’t have an Exclusives store — which is quite interesting considering how class-conscious many of those cultures are. And I will be the first to contend that American culture is, in the words of Bill Hicks, more or less the third mall from the sun. But you can hardly blame virtual-reality developers for this.
“Voting with your wallet,” by the way, is a noble idea — but it’s only half the solution. If you try to starve Home’s economy, Home simply goes after an even broader population to compensate. Home is going to continue to grow and develop more stuff to sell you. So yes, you should vote with your wallet, but also with your keyboard. Trust me on this: developers pay attention. So you might as well tell them what you want and be prepared to wait a while for it to get put together.
2. There’s no sense of community any more. There are no community events. It’s just a big money grab now.
It was always a money grab. It’s just that, in the beginning, there was less money to grab — and less developed stuff to sell. Since Home had very few games and very few commodities, they had to rely more heavily on events to keep people engaged. Heck, they even sank the money into creating an expensive ARG for Home to generate buzz.
Look, nobody likes to feel anonymous. And if you were there at the beginning, you got to feel special. You got bragging rights. You got to dance in the middle of the Saucer Pop fountain with Home officials. You got a Chamber Apartment. Good for you.
But I have to ask: did anyone not see Home growing and expanding into the huge success that it is today, with tons of games and spaces and people?
It’s like going from one rung of schooling to the next. At my grammar school, I knew all the faculty and most of the student body; we progressed through the same series of classrooms. At university, I barely knew my way from the parking lot to the one or two buildings I studied inside of, and I’ll be damned if I can remember more than a handful of people (although this gives me a beautiful opportunity to point out that if you’re ever blessed enough to enjoy one of Saul Steier’s classes at SFSU, it’s a real treat). Home has grown from being a homogenized experience for a few people into a very heterogenous experience for a lot of people. Home, today, can very easily be two completely different experiences for people who will never meet.
The immediate counter-argument, of course, is that Japan Home puts on some very splashy community events, such as the recent Macross Concert. And if they can do it, why can’t SCEA Home?
Here’s my guess on the subject: those events are being subsidized by one or more parties.
Think about it. The Macross Concert cost a fair amount of money to put together. Yet, as far as I can tell, it has no clearly measurable return on investment. How does that event monetize? How can it justify its own existence? Sure, there are cultural differences between Japan and America (and from the descriptions of the well-behaved populace over there, it sounds like a haven for manners and etiquette compared to the uncouth zoo running around inside SCEA Home), but commerce is commerce. Somebody had to front the money to put together that community event, and there has to be a defensible business strategy behind subsidizing it if it cannot monetize independently.
When a hotel brand develops a private residence club, for instance, it’s quite common to see developer subsidies during the early phases of the club’s lifespan. As the club gets its feet under itself financially, those budgeted subsidies go away. I imagine it’s entirely feasible that Home may have a similar setup. Or perhaps not. It’s impossible to know.
Could SCEA Home do with some more official community events? Hey, sure, why not? From a PR standpoint, it might justify the expense (assuming there’s room in the budget to begin with). But honestly, how many community events have there been in the last couple of years? It doesn’t seem to have hindered Home’s market growth. With the deployment of the Hub, it seems that Sony is putting greater emphasis on allowing the community to create events. And why not? A community is only as vibrant as its populace is active; as gamers, we’re used to having everything handed to us — but as members of a community, it’s ultimately up to us. And ironically, a greater emphasis on gaming within Home helps to facilitate this.
3. Home needs to put its emphasis on solving existing problems rather than selling more and more stuff.
LOL WUT?
I’ve refrained for nearly a year from using vernacular in HomeStation. In this case, however, I can only respond thus:
LOL WUT?
That’s like asking your local car dealership to stop selling cars until it goes out and fixes every used car it’s ever sold. Again, this argument is long on sentiment and short on logic. The sentiment is simple: Home doesn’t care about improving the service or fixing technical issues — they just care about selling the next big thing.
The logic of this, however, doesn’t hold up. Of course Sony wants to have a smoothly-running service: it’s more conducive to keeping people happy and keeping the money flowing. Now, I’m not saying that their customer support is great; if their Home support staff is anything like their TV support staff, it’s a bloody nightmare. I actually switched from Sony to Samsung just because their TV tech support process is so vastly superior. But the contention that Sony isn’t trying to fix problems within Home, or that they should stop putting their emphasis on sales until some specific issue is resolved, is utter and total lunacy. If I have a guest who’s upset with his room at the resort — and in fact there might even be something demonstrably wrong with that specific room — do I shut down the whole resort and kick everyone else out? Do I keep the resort open but suspend all revenue-generating services (the pool bar, the concierge desk, etc.) until that one room is fixed?
Now, keep in mind, from a PR standpoint if nothing else, it’s incumbent upon Sony to not just fix problems as fast as possible, but try at all costs to avoid gaining the public perception of a lazy and arrogant company that cares nothing about the plight of its customers. The last thing you want, if you’re a business owner, is for your clientele to feel like they’re nothing but a bunch of numbers. Which, of course, they are — and they know it — but everyone wants to feel special. Or, at the very least, like their voice is being heard.
Even if that voice is capslocked and poorly punctuated and incoherent and completely out of touch with reality.
So now then. Why have I spent the last four-thousand words in support of Home’s commercialization, rather than jumping on the populist bandwagon?
Simple. I don’t like tilting at windmills.
I’ll explain. If you believe that Home is going to turn into a price-controlled amusement park where everything is guaranteed to work perfectly all the time and you constantly get to hobknob with the guys in red jackets, you are going to be sorely disappointed. Now, does that imply that Sony is infallible, or that everything they do should be lauded? Hell no. I’ve seen some boneheaded marketing maneuvers in Home that make me wonder if any of those people, Sony and third-party alike, have a proper grasp on marketing and PR.
Example #1: Scribble Shooter. I love the game. Love it. But it was probably a good idea to tell people up front that only the arcade cabinet owner had full access to the game. Good to see Locust_Star’s latest announcement about making it available (sans rewards) to everyone, though.
Example #2: The MechJets. Nowhere was it pointed out in the marketing materials, as far as I can find, that this outfit had no bipedal locomotion. Kind of important to point out details when you’re charging a premium price tag.
Example #3: SlapHappy Sam. Buy it before you try it? Really?
Example #4: Advertising in personal estates. Granted, there is no such thing as property ownership rights in Home, but whomever thought that huge billboards in personal estates was a good idea needs to have one set up in his own personal living room. And bedroom. And bathroom. Behavioral economics is a two-way street; don’t get so wrapped up in what you want to sell that you forget to consider want people want to buy.
Example #5: Forcing everyone into the Uncharted Total Game Integration. I get the business logic behind it, but it does feel a bit heavy-handed. Particularly for a game title that everyone would likely flock to anyway. But coercive marketing is not necessarily conducive to a good PR perception. Granted, as Locust_Star recently announced, this has been addressed.
So don’t get me wrong: I have no intention of whitewashing everything they do. They’re human beings and they’re fallible. My point is this: if Home is going to continue to grow commercially — which it obviously is — then what is the bloody point of standing there and and railing against it? This isn’t Tiananmen Square; you’ve picked the wrong battle. I know it might feel good to have a “fight the power!” moment, but what does it actually achieve?
What some people don’t realize is that opinions are, more often than not, valued as much by how something is shared as the content itself. There are some people on the Sony forum, whom you and I have both seen, that consistently offer well-reasoned and constructive criticism. HearItWow comes to mind. And whether we agree or disagree with their positions on any particular issue, let’s face it: their thoughts probably carry more weight.
And thus I come to my point: you, as the consumer, wield the power — until you choose to devalue your own voice. You have the remarkable ability to help shape the future of Home; trust me when I say that developers really do pay attention. Which means, if you’re going to actually benefit yourself and your friends, you have a responsibility to offer constructive criticism and feedback which developers can use to improve the product and service. Ultimately, you are the one who benefits. So make your voice count.
And for god’s sake, go enjoy the Hub. That’s a lot of awesome free stuff they gave us.
October 20th, 2011 by NorseGamer | 11 comments
NorseGamer is the product manager for LOOT Entertainment at Sony Pictures, as well as the founder and publisher of HomeStation Magazine. Born and raised in Silicon Valley, he holds a B.A. in English/Creative Writing from San Francisco State University and presently lives in Los Angeles. All opinions expressed in HSM are solely his and do not necessarily reflect the views of Sony DADC.
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That was a wonderful way to lay this subject out so everyone can understand the reality of Home and its commercialism. I will never understand how people could ever think it wasn’t created to sell things. Though at first, when it was a new thing in closed beta, I am sure it wasn’t so blatant.
But with growth comes change and with change comes complaining I guess, it is human nature. I believe it was Abraham Lincoln who said,”You can please some of the people some of the time, but not all of the people all of the time.” And that’s the truth.
Sony has some issues to deal with when it comes to certain areas, but who doesn’t? Business or not we are all human beings and as such we will never be perfect. So get used to that idea and let them do the best they can to rectify the problems as the come up. If you have a problem let it be known, then be patient because, like it or not, I am sure you aren’t the only problem they have to deal with.
Great read Norse!
I agree with you for the most part but where I start to disagree is when we are told that games are the only way to the financial promised land for Sony.Concerts could quite easily be monetized if a cover charge were used to gain entry(probably best used with popular big name bands),and they would be great places to place ads and insert new clothing items(on the avatars that are singing)for sale.They could even make it so that the clothes items could only be bought at the concert location which would be a great way to track just how much cash is being made this way.New avatar actions could also make large sums of cash as well,as just about every couple I know on Home would pay quite well for these.Furthermore there is a place for disgruntled Home users to go and it’s called disc-based games,IF Home is to become all about games then there is not much difference from going to a disc-based games lobby,chatting with friends for awhile,then playing a 1st rate game.There might be small price and quality differences but the basic idea is the same.I believe Sony would be better off not trying to do things in half-measures,this “games now” and hope for the rest later idea seems odd to me.Why not blow the socks off everyone and give us the best of all worlds?I’m greedy I guess but I don’t really want to choose between gaming and social aspects,I WANT THEM ALL.The exclusion of 1 or the other makes Home half the virtual world(and cash making machine) it could be.I don’t fault Sony for trying to make more cash with games,I fault them for leaving a pile of cash on the table by not adding more social aspects(Indeed if that’s what’s happening because I’ve heard very little about what’s coming other than games).I would not fault them for being too greedy,I would fault them for not being greedy enough.There is huge growth potential for entertainment(of which games make up a part) on Home.The biggest slam against Home by most ppl is that there is nothing to do and games may alleviate some of that feeling but there is room for much,much more entertainment for a price.
Norseling, Great read. I feel like you nailed it down in a great many ways. I feel like this business about selling and capturing the buyers interest were all expressed in your article. article hell.. it’s a book. lol
“I believe Sony would be better off not trying to do things in half-measures; this ‘games now and hope for the rest later’ idea seems odd to me. Why not blow the socks off everyone and give us the best of all worlds? I’m greedy, I guess, but I don’t really want to choose between gaming and social aspects. I WANT THEM ALL. The exclusion of one or the other makes Home half the virtual world (and cash making machine) it could be.
“I would not fault them for being too greedy — I would fault them for not being greedy enough. There is huge growth potential for entertainment(of which games make up a part) on Home. The biggest slam against Home by most people is that there is nothing to do — and games may alleviate some of that feeling, but there is room for much, much more entertainment for a price.”
Bam. That’s it in a nutshell. Awesome response, Cthulu.
TYVM.
Unfortunately, the people who spend time on the Forum whining about prices or accusing everyone of being greedy s.o.b.s who are trying to clean them out will probably never read this article.
The only way you would get them to come to HSM is if you promised to publish daily lists of every freebie and ‘prize’ and trophy you can get for nothing in Home. Even when a lot of things are free and others cost very little, there will be those who complain that the freebies aren’t good enough and that 49 cents for a shirt is highway robbery.
Nice article Norse. Your on point about this too!
Wow! What a great article. BTW, what I know of the numbers you estimated, you are in the ballpark. Amazing for someone with no access to real numbers. Your general business knowledge has humbled me.
Something else to ponder -- How many people complaining would actually buy the items that they complain about if they were changed to match their criterion? My understanding is that a large percentage of the forum posters have never bought anything. I have heard rumours that the people in the forums who do buy are some of the best customers, but those who buy less tend to not buy at all.
Another question is -- How many of the complainers are uner 18? If they get an allowance and Home starts to inflate prices, Home may be losing some customers. I wish we had some stats on the users so we could put their comments in context.
There are all sorts of psychological behaviors being poked at here. I have read about tests where people were paid for a task they would be inclined to do for free. When the monetary incentive was taken away, they were less likely to do something than they were before being paid. Hence, what I refer to as the Reward Effect. Now it is hard to make a game in Home that does not have Rewards built in.
The one thing all makers of online gaming agree is that complaining is a constant that you have to accept. The worst thing to happen is that people stop complaining. The opposite of love is not hate it is indifference. As long as they keep complaining, at least we know that they still care.
Ultimately it comes down to a question of value. I know a couple of people who buy everything that comes out, literally, everything, because it’s part of what makes Home worthwhile to them. They love all of the new content, decorating personal spaces, etc.
(Side note: You do not have the patience to wait for these people to get out of their wardrobes. Log out and play a game for an hour and come back. They won’t realize you’ve been gone).
Then there are those, like myself, who buy judiciously. Diamond suit for $15? Not gonna happen. Scariachi Band for $1.99? I’ll take two. That’s a steal. Scribble Shooter? Love the game, worth the money to me. Same with the Mech Jet.
These are the sort of reasonable customers that the Home managers would do well to cultivate. I can think of a couple of people on my Friends List who don’t have much disposable income at all, but they’ll still go out and buy the things they really like. The only danger here is making more content than they can afford. We can be stirred to anger when something really falls outside of our vision of the pricing model, such as the Lockwood handbags.
Then you have the crowd that shouts “That’s greed! Why does it cost so much?” I’m convinced that the reality for most of these ki-- er, people, is that they want the items and lack the means to afford them. They’re aspirational, but they don’t buy anything. anyway, so the price isn’t really an issue. The passion they have for the items is reflected in the vitriol they spew against the developers. They’re the ones that scream at the accidental Mech Jet discount. They wouldn’t have bought it at $2.99, either, but that detail gives them some supposed leverage to rail against the managers.
There is a small subset of this group that falls under the judicious category, actual buyers who feel genuinely ripped off when something doesn’t perform as expected. Scribble Shooter brought this crowd out in droves, and it’s hard to argue with their position. At that price, a game had best behave in expected ways. That blunder raised suspicion among this group of buyers, and they’re keeping their money on the sidelines unless they’re 100% confident in a purchase. I don’t blame them at all for feeling this way.
The last identifiable group is the freebie hunters, who log in to grab whatever rewards they can get. They might spend $20 a year on a personal space. They won’t complain about prices, because they don’t buy much to begin with. Anything they do buy is something they completely love. This is the group that most likely keeps The Green Ticket and personal spaces atop the sales charts for months on end.
The vast majority of pricing complaints, as I see it, come from those who are not loyal customers to begin with. There are times, however, when something stirs up the loyal customers, and those are the cases where I would hope management takes notice.
There are psychological barriers in place. Each of us will look at a thing and form a mental evaluation of its worth. Successful developers, and that includes the Sony team, will find a way to price toward the high end of our expectations and discover success in doing so. They’ll also throw out the occasional mad bargain, like the Scariachi Band or the Spiked Demon, that nudges us toward a higher-priced item in the future, because we want to reward them for the great deals they’ve given us in the past.
Totally agree. The one thing I keep thinking about, which can’t really enter into this equation yet, is the Hub. We can’t yet talk about the Hub beyond what’s already been officially disclosed, but I think I’m safe in saying that there’s *a lot* of free content for the community to enjoy, which undoubtedly cost a fortune to develop. If the price tag for this is putting up with experiments in higher-priced commodities, that’s a trade-off I’ll gladly accept.
Any time the loyal customer base collectively complains about something, I like to look at whether or not it’s a tangible or intangible complaint. If it’s tangible, such as the five examples listed in the tail end of the article, then I agree that it’s hard to fault them. Where it gets tricky is with intangibles, because perception and reality can be two totally different universes. This is where some really strategic PR presence can pay off.
When it comes to commercialization in Home, my personal take on it is that it’s a shame Home had to give away the house for so long to get its feet underneath it, because now it’s built up an expectation within the community as to what the general parameters are for various types of commodities. Changing those parameters can be a real challenge, because people are apt to forget the awesome bargains and all the freebies and focus in on rising average prices for stuff they want to purchase.