How the Hell Does Japan Home Turn A Profit?
(Editor’s note: this article was originally published on August 6, 2013. Given today’s announcement regarding Japan Home and Asia Home, it seems very apropos to run it again right now.)
by Terra_Cide, HSM Editor-in-Chief
“So may you understand that all we know
will be dead forever from that day and hour
when the portal of the Future is swung to.”
–Dante, Inferno
Want to piss me off? Get me into a discussion about the Nipponophiles on the Sony Home forum and their absolute blind veneration of all things to come out of Japan Home.
Japan Home is simply better, goes the tired refrain from a handful of people on the Sony forum and all the little groupies that follow them. Japan just does it right. Japan has rigorous quality controls. Japan throws the BEST public events. We could all learn a lesson or three from Japan. What a shame SCEA and SCEE Homes can’t follow SCEJ Home’s lead.
Seriously. Enough.
I’ve had to listen to this same drivel year after year, spouted by people who want to feel special because they region-hop to an area where the indecipherable language keeps a lot of Westerners out, and thus SCEJ Home can be built up into this exotic foreign locale where only the true in-the-know people get to experience Home the way it was supposed to be, as though Japan Home is some sort of utopia that can do no wrong.
Listen – I have accounts in other regions and I have region-hopped; the reality is the grass is no greener on their side of the fence than it is on ours.
Get over yourselves. Your worship fetish towards a culture that has vending machines which sell used women’s undergarments is disturbing, and you are not a special and unique snowflake. You are a fool.
You are a fool because you haven’t asked — and answered — one extremely important question: who exactly is footing the bill for all these free events?
Macross concert in Japan
Want to celebrate Granzella’s successes? Fine. Go for it. They’re one of Home’s most prominent developers, and they (rightfully) charge a premium for their virtual goods. But don’t you dare try to sell me on the idea that Japan Home as a whole is somehow the template that everyone should follow. Because every one of those major social events that get thrown in Japan Home has a cost associated with it, and damn few (if any) of them are set up to directly monetize and thus recover that cost.
That’s a recipe for disaster.
Let’s take the Macross Concert event that took place in Japan Home a couple of years ago. Big, splashy, brilliant. Great. So who forked over the money for it? Either an outside party used Home as a promotional tool for the Macross IP, or SCEJ itself decided to subsidize the costs in the hopes of drawing more traffic to the application. If the latter explanation sounds familiar, it’s because SCEA and SCEE have, on occasion, done the same thing: Xi, from nDreams, was paid for by Sony as a promotional event.
The problem with Xi and other such free events is twofold: they’re basically a short-term shot in the arm which does little to actually move the needle — a perfect example of this being the Hub — which makes them largely pointless investments, and they set up a false expectation of what the Home experience actually is. Yes, Home should be a dynamically changing world with daily events that drive urgency for people to return — but that requires a tremendous financial outlay as well as significant support overhead, and you’re just not going to get that with a free MMO. Which, by the way, is why several comparable social MMO experiences are so reliant upon user-generated content to drive long-term creative whale engagement.
We suspect there’s a very good reason why SCEA and SCEE Homes, respectively, hold far fewer free events than SCEJ Home: from a business standpoint, free public events just have no upside.
Not much of a long tail if the user base is tiny.
Call me a cold, heartless bitch for daring to point out that the clothes have no Emperor when it comes to Japan Home — but then you’re completely overlooking the fact that I want Home to ideally go on, and that requires solid long-term fiscal performance and a positive forecast for future net revenue growth. Japan Home actually has less virtual content in it than SCEAsia Home — another dead region which resorted to removing its localization requirements in a last-ditch effort to get developers to remember it still exists — and the problem with this is that everyone is laughing and smiling and cheering Japan Home right into fiscal insolvency.
Keep cheering. Go ahead. Because unless Japan Home’s user base monetizes at a staggering percentage hitherto unknown in the history of freemium social MMO gaming, it’s fairly easy to see that there’s an imbalance between the amount of money being pumped into the platform and what little revenue is likely being squeezed out of it. For all the excoriation the perception of SCEA Digital Platforms’ benevolent neglect has earned from the community, maybe we should instead spin things around and realize that it’s probably the only way they can fiscally justify keeping the doors open, long after they probably should’ve pulled the plug.
There’s been a lot of talk, particularly since E3, about the end of Home: will it die with the PS3, what’s its remaining lifespan, et cetera. Indeed, HSM has been warning for some time that 2012 was likely Home’s “peak oil” year as a platform, and a lot of our content at the beginning of this year centered around meditations over what we’ll all do when Home inevitably comes to an end. Just as none of Home’s third-party developers should have all their eggs invested in this one basket, nor should we as Home users continue to hold up as a template of How Things Should Be Done a Home region whose business practices have likely doomed it to an early grave.
This article’s epigraph is from Dante’s Inferno, and for a very specific reason: in Canto X, a heretic prophesies Dante’s banishment from Florence. When asked how the dead can know the future — but not the present — he replies that according to the Divine Plan, the damned can see far into the future, but nothing of what is present or what has happened. Thus, after Judgement, when there is no longer any future, the intellects of the damned will be void.
This is what will come to pass for those on the Sony forum — and elsewhere — who think their desperate plea for internet fame by being Japan Home fetishists somehow makes them superior. Because I’ll wager, right now, that when the inevitable day comes that Home’s shutdown is announced, Japan Home will be the first to close. And on that day, I frankly will enjoy a savage moment of schadenfreude, because it will be the final, irrevocable proof that they were wrong, and all their rants against the pragmatic business decisions made by SCEA and SCEE — all their petulance and self-aggrandizing proclamations and ideas and positions — are void.
(The only thing that worries me? At least one of those Japan Home fetishists is a PlayStation MVP. Still, I trust SCEA is smart enough to not put too much stock in self-important Thou-Shalt-Not declarations which have utterly no grounding in any sort of business logic.)
From my point of view, there may still be a decent business case for letting SCEA and SCEE Home go on; the user bases are almost certainly far larger, and you don’t want negative publicity on that scale during a console launch year, particularly if it’s eking out some sort of net profitability. But Japan Home has approximately one-tenth the virtual goods catalogue of SCEA Home, whilst evidently pumping a disproportionate amount of money into free social events that are far larger in scope — and far more frequent in recurrence — than anything attempted by the larger regions. That’s worrisome, as is the lack of any formal long-term guidance on the platform from SCEA and SCEE, so were I on the content development side of things, I’d frankly be limiting my release plans to just SCEA and SCEE Homes while simultaneously exploring other parts of the PlayStation pantheon to expand into.
Seriously, though: stop with the blind veneration of Japan Home. You look silly.
August 30th, 2013 by Terra_Cide | 17 comments
Terra _Cide is the former Community Manager for Lockwood Publishing and Editor Emeritus for HomeStation Magazine.
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I spot Language here.
Yup. She said schadenfreude.
*bows and cheers* Nothing to say on this. Beyond thralled and impressed. The best I’ve ever read from you. This needed to be said.
About time.
Maybe Japan is doing what NA did with Xi… a promotion to keep people interested? Not that I know. I’m just speculating. I never been there in real or virtual life.
There are people who like Japan Home and I surely don’t know why. And yes some say Japan has better stuff than NA, at least I think some say that.
So what if a NA MVP likes or loves Japan Home. That’s just one person or as written, “at least one of those Japan Home fetishes…”. Whee!!! One! One? Whatever.
I dunno what will happen when or if Home closes but were I to wager, I’d wager that all regions would poof at the same time… or reasonable close. I wouldn’t bet on that either way at he Casino though.
(Me stomps feet!)
(Me screams!!!!!!!!!!!!!!!)
(Me walks away with a sprained ankle because of too much anger.)
Till the end whether it be Home or me first, I’ll stick around as long as I enjoy it and can afford it.
Sayonara
Being one who rarely goes to or reads the forum I will have to take your word on this one. Japan is a very different place, I have been there a few times and I enjoyed it, but I always came back Home to SCEA and would never think that what they had was better, just different. As for events, the people here in our Home make their own. This whole past week was full of them, user created things to do in Home. I think that makes for a much more interesting place than the ones that were made by developer as a market ploy.
Japan Home is nice, but what we have here is nicer and better I think. Good article Terra.
I am tempted but no matter I stay at my own Asia region. I refused to region-hop.
Surprised to hear that Asia has more stuff than Japan but less events than everyone else.
Lol You do know that “region-hopping” is an old term used when one would just crossover a server at the time when it was allowed, right?
Lol I still say region-hop too. A lot of us that go back and forth still say it. Old habits do die hard it seems. I go to all the regions and am sorry to see any of them go. The culture in Japanese Home is Japanese, calm and peaceful,never saw or met a troll while there. Homes diversity has a lot of charm for me. I will miss my “hopping” onto any region when and if they shut down.
Thumbs up.
Japan homes money comes from them being charged more the items they get, 100 yen is approx about a dollar on the current exchange rate, making an average personal space about 6 dollars, the average clothes item 2 dollars. A lot of japan events require you to purchase an over priced item to gain whatever reward is being given or there were over priced related items to events like macross. As for quality, I believe that all the Granzella public spaces in japan were removed and redone due to poor quality. You dont see as many free loaders in japan and if you do they are usually speaking english. In short these people that have a song and dance about one region or any one developer or team jacob or whatever, should know they sound like they are knocking on my door trying to convert me to they religion
I agree.
And so the bad news finally arrives. http://scei.co.jp/corporate/release/130830_e.html
Well Terra,
It seems today that Sony agrees with you. This is huge news about no new content for Japan and Asia and it will be interesting to see in what way if any this effects the other two regions.
Damn it! DAMN IT!
Prescient call on the bad news.