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Sony’s decision to lock DC Universe Online accounts to a physical disc will cost it customers and lots of revenue

By on February 23, 2011
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Sony recently tried to break into the MMO genre on console with the high-profile launch of DC Universe Online.

It’s an interesting experiment in making an MMO work on the console platform, and paves the way for Sony to generate recurring, subscription revenue from its customers for access to its game. This is all the more important because boxed product revenues peaked in 2008 and Sony is dependent on the “royalty” it charges for every PS3 game sold to drive profits. MMO subscription revenue could make a very real difference to the profitability of PS3 as a whole.

Which is why its decision to lock user accounts to an individual disk is so baffling.

As Lazy Gamer reports, Sony has confirmed that:

“Once the PSN key has been consumed with a disk it cannot be resold/replayed with the second user adding a sub – only the original consumer can use that acct.”

and

“Disk and account are one”

Any operator of MMOs knows that customer acquisition is the most important long-term challenge. Selling a $50 disk is nice (of which the publisher might see $20, after retail, manufacturing, console owner royalty and distribution is taking into account). But getting a customer who pays $15 a month for 12 months (=$180) is *much* nicer.

A second hand disc generates no revenue for Sony, this is true. But for ever person who buys a disc secondhand (and deprives Sony of $20) there is a good chance that they will go on and subscribe, generating $180 or more.

So far, Sony has sold about 300,000 copies of DC Universe Online, according to VGChartz. If they all subscribe for a full year, Sony will gross around about $70 million. Not bad, but nowhere enough to cover the physical costs of the discs, the ongoing server and development costs, plus the rumoured initial $50 million development budget.

Customer acquisition is the secret to this, yet Sony is putting strategies in place that limit customer acquisition in order to get a measly $20.

Companies like CCP allow customers to download the client for EVE Online totally for free. They have realised that customer acquisition and retention is much more important than monetising the customer at the first time you interact with them.

If Sony thought the same, they would allow people to pass the disc around with wild abandon. Every person who uses it to sign up to DCUO is a prospect, not a pirate.

Instead, they are stuck in their old ways. I fear that this will come back to haunt them.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
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  • So I see that, Diane. There is no market. Yet consumers have to pay $50 to experience the game – if there was a way of lowering that barrier, I would have thought that was worth doing.

    The clash of MMO with consumer habits on console is an interesting one. Worth keeping an eye on.

  • There’s a strong chance that DCUO will go F2P at some point – it isn’t holding onto players well and selling it like a normal PS3 title means that players used it like a normal PS3 title: play it, finish it, take it back for a trade-in (whoops! can’t do that!) or stick it on the shelf.

    SOE’s marketing communications on this title were abysmal, especially because they needed to convince a new group of players – the PS3 crowd – about the benefits of playing a MMO. They didn’t, DCUO was released very early, and now players aren’t hanging around.

  • Daniel Kromand

    I think the easiest and most profitable solution would have been to allow second hand sales (since they are considered more matter-of-fact in the console market than in the PC market), but then simply to charge the new activation for the first month. The difference in revenue between a box and a 1 month sub would not be that big and it would possibly give the game a steadier flow of players tong term.

  • They should have it so that a second hand disc lets you create an account, but you only get 2 weeks free trial, add a one off “upgrade” fee which includes the free month – discount that below the 50$ since there’s no physical cost to SOE. Maybe they have legally binding contracts with the retailers that stop them doing this though…

  • Anonymous

    In all Pay 2 Play MMOs, the client (here the disk) has no value, the activation code is the only valuable thing in the box, hence there is absolutely no market for second-hand boxes and disks in the first place. Clients on PC P2P MMOs can generally be downloaded again for free an unlimited number of times once the activation key has been tied to the account (I don’t know if you can do this with DCUO on PS3).

    The free-to-access part for these games generally takes place as a trial offer ( play the first levels, or a set number of days, for free, then generally you have to buy a subscription and the activation fee (eg the “box product”).

    As far as I know, it’s the same system for EVE Online (there’s a free trial, but if you upgrade it to a subscription, you have to pay an activation fee in addition to the subscription (it’s 5€ I think))

    DCUO being a subscription-only game, the only thing they could do to reinforce acquisition would be offering free trials (which they might do at some point, although on PS3 it does seem more complicated to handle large downloads). The other alternative is going Free to Play, but you might run in the same distribution problems on console if the client size is too big.

    I agree it does clash with the consumer habits on console where the second-hand market is so important, but that’s just a by-product of MMOs being a purely digital product, even when in a box.

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  • While this is a reasonable argument for equally-modelled games such as World of Warcraft, RIFT or SOE’s own Everquest series (which all require a purchase of the game in addition to a monthly subscription), I think that positioning DC Universe as more of a boxed title is a smart move.

    DC Universe offers highly action-oriented gameplay, and less social one. Of course you can build guilds and improve your own character, but it does not offer nearly the amount of captivating social features like Everquest 2’s housing does, for example – so it’s not unlikely that the average lifetime of a player will be around 2 to 4 months, which means the money made by the boxed product is the main return of investment.

    Anyway, the model works for WoW, doesn’t it. I’d love to play DC Universe for free (and I’d certainly buy a month’s subscription if that was all I had to pay), but the game wouldn’t make 50€ from me, personally.

    It’s a great game, but player turn-over will be (and probably already is) high.