Pachter: Pay For Online Gaming

Crystal ball gazing game guru and Wedbush Morgan Securities analyst, Michael Pachter, has said that Activision must start charging a fee for online gaming. He has been giving his opinions on why video game sales have declined for the fourth month in a row and lays most of the blame on online gaming.

“We think that the overall decline was due to a very large number of people playing multiplayer online games for free on PlayStation Network, and for an annual fee with unlimited game play on Xbox Live.”

“We estimate that a total of 12 million consumers are playing Call of Duty Modern Warfare 2 for an average of 10 hours per week on the two platforms’ respective networks, and the continued enjoyment of this game (along with an estimated 6 million Halo online players, 3 million EA Sports players, and 5 million players playing other games, such as Battlefield, Red Dead Redemption, Left 4 Dead and Grand Theft Auto) has sucked the available time away from what otherwise would be spent playing newly purchased games.”

A sensible argument, everyone has less cash these days so we are spending more time with the games we have rather than buying new titles. Pachter continues,

“While the shift has been great for consumers, who are enjoying an unprecedented, and largely free, game experience, it has been devastating for publishers and shareholders, who are seeing sales and profits decline.”

I am no economist but even I know when money is tight luxury items are the first to be cut. Games are expensive so in the current climate they are going to suffer. Publishers are profit driven so if they are losing sales they must look for other revenue streams. But are they missing the point? Perhaps people are buying less games as they have less money?

You may recall Uncle Bob saying he wanted to charge for Call Of Duty online – Pachter agrees.

“We think that it is incumbent upon Activision, with the most popular multiplayer game, to take the first step to address monetization of multiplayer. It is too early to tell whether that will be a monthly subscription, tournament entry fees, microtransaction fees, or a combination of all three, but we expect to see the company take some action by year-end, when Call of Duty: Black Ops launches.”

Pachter has been known to be wrong, but the indicators from both him and Kotick are Black Ops will have some sort of online payment scheme.

One other thought occurs to me: If games companies would prefer us to buy new games rather than play online why are they insisting on shoe-horning multiplayer in to games that, as far as the storyline goes, really do not need it. Uncharted 2, Assassins Creed 2, BioShock 2 and Dead Space 2 spring to mind.

Source: IndustryGamers


  1. You know what, Pachter may be on to something.

    If people can’t really justify splashing out another £40 for something vaguely similar to what they already own and they can just carry on having fun in something they already own either for free or the flat annual rate, then they’ll probably do it.

    Obviously a point of view not going to be popular with gamers, but it almost has an air of inevitability for something to happening, whether its a subscription, freemium or microtransactions

    • The question is, are people not buyng games as hey are just hapy playing online, or nt buying games as they refer to have things like food and a roof.

      • Games are everywhere, Applications in Facebook, fantastic games on everyone’s mobiles, embedded on websites, Flash and a whole host of ‘Web Apps’ (HTML5 stuff just around the corner) perhaps this decline isn’t just to do with recession but the fact that gaming based entertainment is becoming omni-present and the console is going to get an ever decreasing slice of the pie

        Hmmm… pie

      • Completely agree with the closing paragraph.

        More cinematic single player experiences please!

    • All the activision servers do is stats tracking and game searching. They do not host the games themselves, thats done on an ad-hoc peer to peer basis… so they want to charge for providing the minimum service? Something that everyone else does for free!

      • Was that meant to be a reply to someone else? that comment has no relation to anything I said

    • One other thing is DICE/EA. They let you play online for free if you buy the game brand new. Their game servers must cost them a small fortune, yet they can manage without subscriptions.

      Activision is a game publisher, and by all accounts they are trying their damndest to piss off their market.

      • What are you talking about

        This guy doesn’t even work for Activision (he has less than nothing to do with them) all he’s doing is making one of his usual wild predictions that something could happen and suggesting that as the most popular franchise it’s down to CoD to take the first step that everyone surely wants to take but are too scared to be first to do so.

        (not aimed at you or anyone in general) but people really need to read stuff before they get there anti-Activision pitchforks out

  2. And do they expect us to pay a separate fee for every online game we have? If it’s on a par with World of Warcraft that’s £8.99 per game per month. That would make me buy less games as I could only afford 1 or 2 at a time. I play WOW and if I want to try another MMORPG I stop WOW for a month. Can’t afford them all. So if this is the future, I’ll be sticking to offline.

    • Good point, rather than de-incentivising people to play online it could end up with even fewer game sales, because lets say someone committs to CoD/Killzone online (for example) they will be less inclined to get another FPS until the next CoD/Killzone comes out

      • I would be in this camp – I am not overly fond of mp at the best of times (it has to be really good for me to visit more than once), but charges for online would just drive me further away from it.

        Free online gaming was one of the things that drove me to a PS3 as i dont use it that often & so when i do feel like a dabble online, i don’t expect to pay for the priviledge!

  3. I think I may just start boycotting all future Activision titles now.

    • This guy is an analyst who doesn’t work for Activision, predicting something could happen and suggesting that as the most popular franchise it’s down to CoD to take the first step that everyone surely wants to take but are too scared to be first to do so.

  4. So we have to pay for hardware, then buy the games, then by loads of DLC and then pay to play online for individual games!

    What a joke!

    • And pay for your internet and Xbox live.

      • And don’t forget the £11 map packs…

      • And the food you eat whilst gaming.

      • And the new buttons for your gamepad

    • I know, it’s crazy! I mean I pay to have a light installed, then pay for the electricity and the light bulbs! It’s just wrong!

      • That’s an awful comparison. For shame. By that argument, you buy the console, and the game, and pay for the electricity, but then have to pay to use it with other people… twice.

      • You will need a nice lampshade for that too.

      • Yep, the fact that it’s silly was the whole point Davs.

    • read my mind

    • And the electricity used to play as well to light the room that you are in. And the clothes you wear while gaming. The TV you play on and the couch you sit on.

      • You wear clothes whilst gaming?

        All i need is a pair of pants

  5. I’m not paying an online subscription fee should it be one off or monthly. I bought my PS3 because the online is FREE. This is obviously another cash ploy for them greedy bastards to rake in even more money than their fat lined wallets can handle already. Also i can’t see people who already pay for an XBOX Live Subscription to then pay even more money to play a game online.

    Modern Warfare might be a popular franchise, and i for one also enjoy it, but i think they are pushing their loyal followers too far should they decide to do this.

    • Using modern warfare as an example i think they were pushing with the pricing of DLC so say if they were to do this as well then they would defintley be pushing it too far and would defintley lose me and i suspect alot other people!

  6. I want to pay for sword slashing, spell slinging MMOs but normal online? no thanks

  7. The main thing that gets me is they will still charge £40 to buy the game, then expect you to pay extra to play online. I could see it totally backfiring on them, with people just continuing to play the currently free online titles and not bothering with the new titles at all, thus making them even less money.

  8. What they should do is essentially the same business model and PRS for Music. They sell a license to radio stations to play any of the music they look after (most of it). Logs are provided to PRS about what music was used and the license money is then distributed to the artists of those pieces.
    So we pay a set amount to play online and Sony/MS monitor which games are being played and for how long and pay the publishers accordingly.

    • *same business model AS PRS for Music* – Stupid typo

    • Cool, the only fly in the ointment is Sony’s statement that gaming online will always be free, obviously eating a bit of humble pie is nothing compared to a billion dollars of revenue though

  9. This one will be totally up to customers, but unfortunately MW2 has shown many are happy to be nickeled & dimed for map packs. I guess, depressingly, many will pay subscription too. So collectively, gamers are helping make their games more expensive.
    Dedicated online servers would be one thing, but paying to play for p2p online gaming feels to me like I’m being charged for my own net connection.

  10. Why do half the people commenting conveniently not read the bit about this coming from an analyst, not Activision?

    • Perhaps because Bobby has said he wants to do this? So it’s not as if Activision hasn’t shown an interest…

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