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Destiny's business model leaves Bungie walking on eggshells

Never has a successful game been on such fragile ground, and Bungie can ill-afford to lose player goodwill

Launching a new game is a fraught, tense process; there are many tricky steps along the way and messing up badly on any one of them can sink several years of effort into commercial failure. For an online game, the complexity is even greater; managing questions like server and network resources, players' in-game behaviour towards one another and so on adds layer upon layer of potential difficulty and challenge to the launch (and post-launch management) of a game.

When Bungie launched Destiny, the company decided to do something even more difficult. It launched a large, complex, multi-platform game; it made that game into an online game, reliant upon network code and infrastructure for even its most basic interactions; then, just to make things really interesting, it decided to use an experimental, untested business model for the game. Destiny is a persistent online game that eschews both F2P and paymium style microtransactions, and conventional MMO style subscription fees. It aims to earn roughly the same amount as a game like World of Warcraft not by asking users to hand over their credit card details and set up a monthly payment, but by convincing them to buy a fairly expensive new slice of content every few months.

I've found this to be a really, really weird model right from the outset. I understand the logic; players are less likely to try out games which have a subscription fee, so Destiny would never have achieved its enormous launch numbers if people expected to be paying $10 per month down the line. Moreover, core gamers don't like F2P transactions (in theory; in practice, they're perfectly fine with them if the implementation and the game itself are done right) and a game like Destiny would sink like a lead canoe if there was a hint of pay-to-win in its business structures. By charging people for content, not time, Destiny effectively repackages a similar payment structure to World of Warcraft or any other subscription MMO into a form that's more palatable, in theory, to gamers of all persuasions. Paying for content is what gamers always say they want to do, when they complain about subscriptions or F2P; Bungie hit upon a way to get ongoing revenues out of Destiny without leaving the "pay for content" model which their consumers want.

"If Bungie screws up, the player simply has to do nothing, opting not to go through the active process of buying the next expansion"

The problem, as I saw it, was attrition. Subscriptions are hard to get; convincing consumers to set up a monthly subscription is an uphill struggle. On the other hand, they're also very persistent. Consumers often stick with subscriptions even during periods when they're not playing a game much, or at all. I've been up to my eyes in research work for a few months and haven't logged in to Final Fantasy XIV once; Square Enix is still doing nicely out of me every month, and I haven't bothered stopping the subscription because, well, the expansion pack is coming out, and there's an odd psychological finality about cancelling a subscription which I'm not ready to commit to. This makes no economic sense - one in the eye for the devotees of homo economicus - but it's a state of mind that a great many gamers with an MMO subscription can recognise. Once you have a subscription to something, you're committed; that's a somewhat irrational state, and it means that you simply don't question what you're spending in the same way that you would if you were buying a new product each month.

This latter condition is precisely what Bungie is pushing its users towards; they force them to make an active decision, every few months, about whether Destiny is still a big enough part of their gaming diet, or whether the new content is appealing enough, to pay for something new. There's no sense of continuing to pay for something to which you're committed; there's a new purchasing decision any time, and that makes it vastly easier for a consumer to say "no, I'm out" and bail at any time. Perhaps that's okay, in Bungie's eyes; I don't know how long they want Destiny consumers to stay in the game. If they're hoping for World of Warcraft longevity, they'll be disappointed; if they really just want to sell a fixed amount of content over two or three years, well, perhaps they're doing okay. I don't know what percentage of Destiny players have upgraded to The Dark Below and House of Wolves, but my sense is that it's much, much higher than I'd originally have expected, which is a testament to what a slick and addictive game Bungie has constructed.

That doesn't mean that the attrition problem I highlighted isn't real; it's an economic and psychological reality. It just means Bungie has done a great, great job of avoiding this problem up to this point, skating through on goodwill to some extent in rougher patches, redeeming itself gloriously with fantastic content like the Raids and pretty much the entirety of House of Wolves. All the same, it makes the entire process of managing this vast post-launch project altogether more fraught; if Blizzard screws up, players have to make an active decision to go through the process of cancelling their subscription, but if Bungie screws up, the player simply has to do nothing, opting not to go through the active process of buying the next expansion. Everything has to be done better, especially as the game ages and that initial goodwill wears thin; new goodwill must be generated in its place, on an ongoing basis, to keep the player base sweet when new problems arise.

How much of the goodwill generated by House of Wolves was spent, I wonder, when the creative director on the next expansion, The Taken King, made some cocky, arrogant-sounding comments about the company's pricing in an interview with Eurogamer at E3? It set the Destiny-focused corners of the internet alight with fury; Luke Smith, the Bungie staffer responsible, has since backtracked humbly (describing the tone of his quotes by saying that had it been another developer, even he would think "that random developer looks like an Asshat") and the company has rethought some aspects of its approach to pricing for the Taken King expansion. It might be enough to satisfy a goodly proportion of the fanbase; I hope so, as I don't think Smith's comments were remotely bad or unpleasant enough to justify having a serious economic impact on his company, but many players may feel that Bungie has betrayed a deeper lack of respect for the consumers whose money they're asking for every few months, and that's a position they're equally entitled to take.

"Destiny remains a grand experiment in the games business; a game in uncharted waters, reliant upon ongoing revenue that simply won't materialise if enough consumers decide they have had enough"

What Smith, and perhaps Bungie more generally, may not yet appreciate is the extent to which their business decisions have navigated them onto ground entirely made out of eggshells. Their players don't have the same commitment that World of Warcraft players have; that's a social and psychological difference that stems from the lack of a subscription but extends through the systems of the game itself, which de-emphasise social play and bond formation, asking players who want to engage with the tough co-operative raids to import their own friendships into the game rather than giving them an opportunity to form new ones. That's a bigger deal than you might imagine; players who engaged with WoW and subsequently left often had no way to stay in touch with the friends they had made in the game. Your Destiny compatriots, on the other hand, are probably also in your phonebook and on Facebook; the social cost of not buying that next expansion pack is that much lower. What that means for the developer (and the publisher) is that the kid gloves can't come off, at least not often, in dealing with the playerbase. You can make unpopular decisions, if you're sure they're necessary, but you'd damned well be the world's finest diplomat when the time comes to announce and explain those decisions to your players; a controversy that would be a storm in a teacup for another game could be millions of dollars of lost revenue for Destiny.

With the release of House of Wolves, all of the content pre-bought by Destiny players at launch (those who bought the premium edition received the first two expansion packs as part of the bundle) has been exhausted. The training wheels are off; from now on out, the curious fragility of one of the most popular games of the decade finds itself without a cushion against failure. Destiny remains a grand experiment in the games business; a game in uncharted waters, reliant upon ongoing revenue that simply won't materialise if enough consumers decide they have had enough, lacking even the inertia of a subscription fee system to sustain it through mishap. I love Destiny and wish it the very best; but Bungie needs to be better, to execute more perfectly, now than they ever have before, because they find themselves reliant on consumer goodwill to a greater extent than any game company ever has.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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