I’m noticing that more than a couple MMOs are offering lifetime subscriptions these days and I believe that this is about as damaging to the industry as was Origin’s decision to charge $9.95 per month for Ultima Online.  Lifetime subscriptions might end up setting a pricing norm in the industry that is short sighted in the same way that Ultima Online’s $9.95 helped the industry settle at $14.95 subscriptions today, for good or for bad. 

All subscription MMOs tend to progress through a subscription base that follows the same pattern over time.  Initially, there’s tremendous growth at launch time followed by a dip in subscribers after the 30 days of free time is up.  Then there’s a period of predictable growth and subscriber churn.  Finally, as the game ages, more players leave the game than stay and subscriber numbers begin to fall off.  Many MMOs will maintain a base of loyal fans for many years and eventually, the MMO will be completely populated by these loyal fans.  Churn in the final phase will tend to be much lower than the previous two phases.

Great, so how does this apply to lifetime subscriptions.  First off, lifetime subscriptions only appeal to those that believe they will be with the game long enough to make it worth while.  Second, lifetime subscriptions remove the incentive for players to be involved in the game.  They’ll still have active subscriptions but the player won’t be anywhere to be found until a new content patch drops.  Lifetime subscribers create loyal fans of the game but do nothing for the community of the game when the player is on hiatus waiting for a content patch.  With an active paying subscription, the player is at least in the game.  Lifetime subscriptions actively decrease Average Revenue Per Unique Customer (ARPUC) by eventually converting a paying customer into a non-paying customer which is completely backwards from the idea that one should learn how to monetize their customers more effectively.

Let’s take it to the next step.  Assume that churn is some percentage, say 20% per annum.  I’d wager that of that 20% churn, none of it consists of lifetime subscribers.  It costs players nothing more to stay so do they ever really leave?  Big deal; new players come into the game every year as part of that 20% churn, some will say.  The problem is that some percentage of those new players will become lifetime subscribers.  Eventually, the remaining 80% of the subscribers will be lifetime subscribers.  When the game matures and starts the decline phase, the game will lose all its paying subscribers first hammering the game’s ARPUC numbers.  Why leave when it costs the player nothing to stay?  What the developer will be left with is the new players from that year’s churn that don’t convert to lifetime subscriptions becoming the game’s revenue base.  That’s a problem in my opinion.  Add to that, the rising cost of data centers, employees, support staff and new content creation and I believe lifetime subscriptions are a recipe for failure.  They are setting a precedent in the industry and I’m not convinced it is a good one.  Thankfully, the pricing strategy has not taken hold in more than a couple MMOs.

Please understand that I think this applies only to MMOs that base their revenue model on subscriptions.  Free to play MMOs have already baked in the costs of production into their development and design methodology.  They’ve accepted the fact that new content needs to be released for the game to continue it’s existence and more importantly, the players maintain no sense of entitlement to the new content.  Lifetime subscriptions forces your game to behave like a free to play micro transaction game but doesn’t reset player’s expectations of paying for new content.  Players expectations will remain where they do for all subscription based games except that now, those expectations might eventually come with a cap on revenue as seen by the value of the lifetime subscription.  This makes finding alternative revenues for your game more important than ever.