Powerball lottery - Boosting jackpots to boost sales

The January 2016 jackpot reached $1.5B because the carried-over jackpot increased faster than ever before in the streak of 19 drawings without winner. To show this, the table below compares the $1.5B jackpot to the $564M jackpot of February 2015, which concluded a streak of 20 drawings without winner.

Streak	Jackpot amount ($M)
	Jan'16	Feb'15
15	255	208
16	300	230
17	334	261
18	529	289
19	948	317
20	1,500	395
21	-	564

Streak	Tickets sold (M)
	Jan'16	Feb'15
15	26	24
16	41	28
17	54	29
18	176	37
19	440	48
20	635	73
21	-	190

The February 2015 jackpot reached half a billion dollars after 20 consecutive drawings without winner. The January 2016 jackpot reached three times that amount in one drawing less. In fact, it is surprising that the January 2016 jackpot could triple from $529M to $1.5B in two drawings. What happened?

Funding Powerball's jackpot

To understand how jackpots build up, we have to understand some of the inner workings of the Powerball lottery. The 2015 Powerball group rules published by the Multi-State Lottery Association (MUSL) managing Powerball are sometimes ambiguous, so this section may not be perfectly accurate. To keep it simple, the Power Play option is ignored.

Although MUSL runs Powerball, each state lottery is in charge of advertising, selling tickets, and giving non-jackpot prizes to their respective winners. Each state lottery keeps half of ticket sales, which probably directly goes into the state's budget. The other half funds MUSL's four accounts: the prize pool, jackpot pool, bootstrap pool, and reserve.

The prize pool (aka Powerball Set Prize Pool) is filled weekly by each state lottery to pay the small prizes. Ignoring Power Play, it should receive at least $4 / 38.32 + ... + $1M / 11.7M = 32 cents per ticket to be able to pay out the prizes. In-between two drawings, its balance is close to zero.

The jackpot pool (aka Grand Prize Pool) holds the jackpot money. When the other pools (usually the bootstrap pool) need to be topped-up, up to 5% of sales is transferred from it to them. By the time the jackpot reaches $110M annuity/$70M cash, ticket sales have filled all other pools, and the jackpot pool receives the full 68 cents per ticket.

The bootstrap pool (aka Set-Aside Account) backs up the jackpot pool when the jackpot is won at the beginning of a streak. For example, every streak starts with a jackpot of $40M annuity/$25M cash. These drawings usually sell 10 million tickets, ie $20M in sales. The state takes $10M, small prize winners $3.2M (32 cents per ticket), and so there is only $6.8M left to pay the $25M jackpot. The extra $18.2M comes from this pool. Fortunately, 10M tickets have only 4% chance to win the jackpot, so the bootstrap pool is rarely emptied. It is filled by "taxing" the jackpot pool 5% of sales, ie 10 cents per ticket, until it has reached its $20M cap.

The reserve (aka PRA and SPRA) exists so that MUSL does not get bad press for not paying winners their full prize. This could happen because of a system error, miscalculation, or because all other pools are depleted. When the reserve itself is depleted, prizes stop being fixed (eg $1M or $7) and become parimutuel to prevent breaking the bank. Until the reserve reaches its $40M cap, filling it takes precedence over the other pools.

January 2016 vs February 2015

To illustrate how these pools work, we can use the streak of 20 drawings leading to the jackpot of $1.5B annuity / $930M cash as an example. The streak starts on November 7, when 374k 2-dollar tickets and 101k 3-dollar tickets won small prizes. Ticket sales (estimated) are 24.87 * (374k * $2 + 101k * $3) = $26M. The state takes $13M, and small-prize winners $4M. Let's imagine that the reserve is full. The jackpot had reached $90M cash on November 4, so the bootstrap pool should be full, but to illustrate its workings, let's assume it is empty. Since the jackpot is not won, the bootstrap pool receives 5% of sales = $1.3M. The jackpot pool receives the remaining $7.7M. This process goes on until December 19, when the bootstrap pool reaches its $20M cap. All these numbers are listed in the first table below.

On closure day, January 13, when the $930M cash jackpot is won, the ten-week streak has raised a total of $3.4B. Around $623M has been paid to small-prize winners, $930M shared between the jackpot's three winners, and $1.7B kept by the states. As for the February 2015 jackpot, the states only received $679M in roughly the same amount of time (ten weeks and a half). Judging from these two jackpots only, the 2015 tweaks seem to have tripled Powerball's profits.

Pool amounts (in $M) leading to the $1.5B annuity jackpot

date	jackpot (cash)	ticket sales	prize pool	jackpot pool	bootstrap "tax"	bootstrap pool
11/7	25	26	4.2	7.6	1.3	1.3
11/11	32	22	3.0	15	1.1	2.4
11/14	38	28	4.1	23	1.4	3.8
11/18	44	24	7.7	26	1.2	5.0
11/21	50	27	6.4	32	1.3	6.3
11/25	57	28	3.1	41	1.4	7.7
11/28	63	28	4.8	49	1.4	9.1
12/2	69	32	3.7	59	1.6	10.7
12/5	80	38	8.2	68	1.9	12.6
12/9	91	33	5.5	78	1.7	14.3
12/12	103	38	7.4	88	1.9	16.2
12/16	113	39	6.2	99	2.0	18.2
12/19	127	51	9.6	113	1.8	20
12/23	143	58	9.9	132	full	20
12/26	161	54	6.3	153	full	20
12/30	189	84	14	181	full	20
1/2	210	118	21	219	full	20
1/6	333	375	66	341	full	20
1/9	597	963	159	663	full	20
1/13	930	1,374	274	1,077	full	20
closure	930	3,440	623	0	NA	20

Pool amounts (in $M) leading to the $564M annuity jackpot

date	jackpot (cash)	ticket sales	prize pool	jackpot pool	bootstrap "tax"	bootstrap pool
12/3	26	22	2.2	7.7	1.1	1.1
12/6	33	26	4.4	15	1.3	2.4
12/10	39	25	4.1	22	1.2	3.6
12/13	46	27	4.8	29	1.3	5.0
12/17	52	25	4.4	36	1.2	6.2
12/20	59	32	10.2	40	1.6	7.8
12/24	65	35	9.2	47	1.8	9.6
12/27	72	32	10.3	51	1.6	11.1
12/31	78	38	8.4	59	1.9	13.1
1/3	85	35	4.6	70	1.7	14.8
1/7	95	35	5.0	81	1.8	16.6
1/10	105	41	10.2	90	2.1	18.6
1/14	114	38	7.0	100	1.4	20
1/17	126	48	16	108	full	20
1/21	135	52	12	122	full	20
1/24	150	62	18	135	full	20
1/28	170	60	11	154	full	20
1/31	188	74	15	176	full	20
2/4	206	100	18	209	full	20
2/7	257	151	30	255	full	20
2/11	381	401	74	381	full	20
closure	381	1,358	278	0	NA	20

The Powerball tweaks have only been implemented for three months now. With little data to rely on, it is not guaranteed that profits will stay triple what they were before. Profits may have soared this time because of the buzz surrounding the record-breaking jackpot. The next billion-dollar jackpot may see mediocre sales because people got tired of Powerball or found other games to play. Will the next billion-dollar jackpot generate a billion dollars in profits? Will players adapt to the new odds? We will probably find out within a year.

Powerball lottery - Tweaks

The jackpot fatigue theory

The Powerball mechanics have been tweaked several times since it started in 1992. Starting in January 2012, the game had 59 white balls and 35 red balls so that a billion-dollar jackpot would happen every 10 years. No such jackpot happened until the rules changed again in 2015, but as the table below shows, the jackpot reached half a billion several times.

Jackpots above $300M, 2012-2015

Date	Jackpot ($M)	Tickets (M)
2/11/2012	336	89
8/15/2012	337	86
11/28/2012	588	286
3/23/2013	338	80
5/18/2013	591	243
9/18/2013	399	93
2/19/2014	425	86
2/11/2015	564	191
9/30/2015	310	51

Powerball sales dropped 19% nationally in 2014. Lottery officials suggested two explanations: the lack of a huge jackpot in 2014, and jackpot fatigue: lotteries need increasingly bigger jackpots to attract the casual players who only buy tickets when the jackpot is huge.

The table above confirms that there was only one jackpot above $300M in 2014, but it rejects the fatigue theory. For jackpots between $300M and $350M, the number of tickets sold decreased from 89M in 2012 to 51M in 2015. And for the three jackpots between $550M and $600M, the number of tickets sold went from 286M in 2012 to 191M in 2015. Sales from the biggest jackpots lost 35% in three years.

Yet, the fatigue theory made New York state lottery officials shift their focus from jackpot-driven games, where jackpots get very big too rarely, to instant scratch-off games with more frequent prizes. New York state is a major actor in the Powerball lottery: it ranks third in ticket sales, after California and Florida. So it's likely that the tweaks of October 2015 were an attempt to address jackpot fatigue.

October 2015 tweaks

In October 2015, white balls increased from 59 to 69, and red balls decreased from 35 to 26. Thus the odds of winning a prize increased from 1:32 to 1:25, but the odds of winning the jackpot decreased from 1:175M to 1:292M. Lower jackpot odds means longer streaks until the jackpot is won, ie bigger jackpots. Projections made in 2012 suggested that a billion-dollar jackpot would happen every 10 years. Data from November 2015 to January 2016 suggests that billion-dollar jackpots should now happen every year or so, and there is a 63% chance for one to show up within 5 years. This tweak is similar to the British National Lottery tweak of June 2015: 5 balls used to be picked among 49, which was raised to 59, resulting in the £58M jackpot of January 2016, the largest in the National Lottery's history.

Decreasing the odds of winning the jackpot decreases the expected value of a ticket. This expected value is plotted in the graph below, against the jackpot value. Before the rule change, the jackpot had to reach $200M for a ticket to be worth $1. Based on drawings data from 2015, $200M jackpots were expected to occur every 24 weeks. Now, after the rule change, a ticket is worth $1 when the jackpot reaches $450M, which is expected to happen every 34 weeks.

Long story short, the October 2015 tweaks increased the chance of winning a consolation prize, but decreased the chance of winning the jackpot and the expected value of a ticket. Since the expected value of a ticket estimates how much each lottery ticket costs to the organizers, their profits must have increased!

Hearthstone - crafting

Hearthstone has a soft currency called dust. Dust is used to purchase a desired card from Blizzard. Common cards cost 40 dust, legendary 1600. Dust is obtained from trashing cards: 5 for common cards, 400 for legendary. Players who want a specific legendary card are very unlikely to find it in a card pack. But they can trash the cards in the card pack for dust, and use that dust to buy it.

Blizzard gave a special name to purchasing with dust and trashing cards for dust: crafting and disenchanting. Yet this mechanic is far from the crafting we are used to in RPGs: no additional material is required beside dust, and all cards follow the same recipe. Rarity only increases cost. So why calling it crafting/disenchanting, and not buying/trashing? Why make a fancy UI, pretending that players are actually creating a card themselves, and not buying it from the store? I think it was so that players perceive dust as a regular game element, and not a currency. That way, players don't feel like they are purchasing dust (through card packs) with real money at all.

Blizzard actually introduced direct-purchasing (aka crafting) as a solution to what they say is a common trading-card game issue: when players obtain a rare card, they want to keep it, and they'll never trade it with other players. But that rationale is flawed. People who buy card packs will sell their duplicates if the game provides them an auction house. Blizzard probbaly did not want to go that route after their Diablo 3 auction house was overrun by gold farmers.

Gravity EU changes XP rates to prevent botting

Gravity Europe is the company running the European Ragnarok Online (euRO) server. Players can play on euRO for Free or by subscribing to a Premium account for 5 euros per month. Premium accounts also provide perks such as more character slots, more space to store items in the game, and a lower XP penalty on character death.

Gravity EU sent an email on October 22, 2015 to notify their players of a change in XP and drop rates:

Dear Adventurer,
As we have been aware that bots are polluting our server more and more every day, we've decided to act and make botting less attractive than it has been so far. From now on, the XP and Drop rates will change for both our Free and Premium users. Indeed, below you will find the comparison between previous and new rates:
Previous rates: Free Players: 100% XP and 100% drop. Premium Players: 150% XP and 100% drop.
New rates: Free Players: 75% XP and 75% drop. Premium Players: 175% XP and 150% drop.
As you can see, we also increased the Premium rates as a thank you to our loyal players and we hope that these changes will make our server a better place to live and play on, for everyone.
Enjoy your time on Ragnarök Online!
Gravity Europe Team

This decision is wrong for several reasons:

• Reducing the drop and XP rates for bots from 100% to 75% does not solve the botting problem. Bots on Free accounts are now simply 33% less productive, while bots on Premium accounts 50% more so. Bots are still here.
• The gap between the Premium and Free rates was moderate. Now it is more than 2x. Why would anyone play for free now?
• Using botting as an excuse to change the rates is a marketing ploy. If Gravity EU had increased the rates without mentioning botting, and only as a thank you to our loyal players, it would have felt like they were forcing players to go Premium. In contrast, by justifying their change with botting, Gravity EU is telling their players: go Premium to fight the bots!
• RO came out in 2002, so its graphics and game mechanics are a bit outdated. Yet, like any MMO, RO must attract new players for its community to survive. Having made the game free was a good first step, but Gravity EU also has to work on players acquisition. Most new players start playing the game for free, to try it out. Reducing the drop rates for the free players certainly hurts day-1 retention.
• The decision to change the rates is framed as a loss for Free accounts and a small gain for Premium accounts (and not as a solution against bots). The decision could have been framed as a large gain for Premium players and no change for Free players. Make it a reward! In fact, the Premium Service page frames it as a 100% vs 230%, not a 75% vs 175%. Why was it not framed that way in the email?

Finding a solution to botting is actually easy. Some private RO servers implemented periodic captcha popups: every 30 minutes, the game kicks out the players who fail to answer a random but easy test (such as 1+2=?). A bit inelegant, but very effective.

Game of War

Game of War is a mobile game currently making $1.2M/day and having 2.2M daily active users. Its developer, Machine Zone, is valued at $3 billion (while Zynga is valued at $2.7 billion and Supercell at $5.5 billion.).

The game is quite high up the charts of the App Store, only surpassed by Clash of Clans' $1.7M/day and 4M daily active users and probably Candy Crush as well. CoC and GoW are similar in that they are both free-to-play empire-builder war games for mobile. Whereas I find CoC to be a polished game with elegant mechanics, Game of War is said to be everything wrong with mobile monetization. Let's have a look!

Copycats

In an interview in 2012, Gabriel Leydon, Machine Zone's CEO, said they are making games that are very, very special and unique in the market. But in the same interview, he also said If you want to scale fast and you have the ability to do it cheaply, you just clone. With GoW, they did not go the special/unique route: they cloned 99.9% of their gameplay and UI from Kabam's The Hobbit (which launched for mobile in October 2012). Shameless cloning is a common practice among mobile games, and The Hobbit itself had cloned a lot of its gameplay and UI from Evony (a Flash game from 2009), which itself had cloned most of its gameplay from Civilization.

Going back to GoW, the trailer features a battle in real time scene that actually never happens in the game. In the game, the player can see their armies move in real time, but when battles happen, the player only sees a report of the troops expended and resources gained. No visual battling actually happens. So the game launched with a lot of hype and exaggeration. Since it's a clone of The Hobbit, the marketing team had to exaggerate to compete.

Translation vs innovation

When GoW launched in July 2013, Venturebeat wrote they were using advanced technology, including a real-time translation engine, a sophisticated communications platform where players can send threaded emails, text chat, make comments, and share their feats on social forums. There really is nothing new or sophisticated with in-game emails. The translator, however, is GoW's unique attribute, what the game is known for. How good and useful is that famous translator?

When typing on the miniature keyboard of their iPhone, people use slang and make spelling mistakes. So the translator has to crowd-source a lot of sentences to players. For example, let's say a French player says "lu, a va bi1?". To translate this for American players, I think the sentence is first automatically-translated into English, leaving non-translatable words untouched: "read, have go bi1?". This gibberish is then given without context to 4 players who are told they'll receive in-game currency if they can fix the sentence. The first player fixes the sentence into "I read you, I have to go", the second suggests "Read (what I wrote above), I have to go and buy one", and so on. A fifth player receives the four tweaked sentences and is awarded some in-game currency for picking the sentence he thinks makes most sense. The player who wrote the chosen sentence receives coins, whereas the other three receive a thank you message with no reward.

This sounds like a good idea, but there's a reason why after all these years Google Translate still sucks, and why translator is still a job. "lu, a va bi1?" in proper French is "Salut, ça va bien?", which Google can translate easily to "Hi, how are you doing?". But most French players can write "hello" by themselves. In Kings of the Realm, a game very similar to GoW, I've seen many American players write to Russian players in Russian. In Hearthstone, the game has 6 emotes (for "hello", "well played", and so on), and needs no translation system whatsoever. Did GoW focus on and boast its (mediocre) chat translator at launch because it was the only thing that differentiated it from The Hobbit?

Cash grab

MachineZone was actually called Addmired when it started. They were developing dating apps. Maybe the name made sense at the time, but even for a dating app, it's a terrible name: are users going to get mired in ads? That no founder flagged the name as inappropriate tells a lot about the company's business model.

GoW reminds players that they can spend money every time they login. The first screen showed when logging in is the one below. The font is inelegant, reminiscent of Asian mobile games like Puzzle and Dragons. The fireworks at the bottom obstruct one of the products offered in the bundle. The bundle name is "Summer MEGA GOLD Sale!!!". And a timer of 30 minutes pretends that the sale will end within 30 minutes. In fact, the player only needs to log back in to get spammed by the sale again...

In Clash of Clans, no upgrade takes longer than 14 days. The game provides 5 builders, so the most intense players have something to upgrade roughly twice a week. In GoW, the longest upgrade times is 23 years. Nobody would wait 23 years for an upgrade to finish! The designers do not expect players to wait 23 years. Everybody understands that year-long waiting times are here only to make players skip them with money. No surprise that some players report having spent $9,000 in the game. A kid in Belgium even spent $46,000.

Sexy advertising

GoW spent $40M to run an ad where model Kate Upton shows her cleavage during the Superbowl. Some people were outraged, but this advertising strategy was already used heavily in 2009 by Evony. Using sex in ads is not new, but that does not excuse it. It's interesting that a company valued at $3 billion has only one product, and the content of and advertising for that product were both 99.9%-copied from another company's product. In contrast, Clash of Clans' core gameplay may not be original but the ad they ran during the Superbowl was funny, silly, and just more elegant.

In fact, GoW's ads could be worse. For example, Evony's advertising strategy was much more questionable than GoW's. Through iEvony, they rewarded players with game coins when they referred a friend or when a friend they referred purchased game coins with real money. In order to bootstrap the pyramid scheme, iEvony was invite-only. Evony also used any search-engine optimization trick they could, stole ad photos and game art, and showed soft-porn images that have nothing to do with the game. So GoW still has some way to go!

Why do GoW (and CoC) use ads? After all, they have so many players already that word-of-mouth should bring them more. In practice, only a small percentage of new players will keep playing the game past the one-week mark. An even smaller number will spend money. Thus these games aim at attracting as many players as possible, so as to increase the number of spenders. But there will come a time when there will be no more new players to draw to the game. But since 2013, the cost for attracting new players outweighs the average amount spent by players ($2.73 vs $1.96). Since players get tired of games eventually, these greedy business models are unsustainable.

Conclusion

GoW is an over-the-top cash grab using sex [ads] to fuel a game where sex really isn’t a factor. The game has a terrible UI plagiarized from another game, and a horrible gameplay also plagiarized from others. This is the kind of game that gives a bad name to free-to-play mobile gaming. I'm disappointed that millions of players follow the ads and don't see that it is so crappy.

Hearthstone

Hearthstone is a trading card game released by Blizzard in March 2014. It's available on PC, Mac, iOS, Android, and more platforms because it is built on top of Unity. Hearthstone had 25 million registered players in January 2015. If you come from a traditional pay-to-play sector of the game industry, you could say that Hearthstone has twice more players than World of Warcraft, and be impressed. But if you come from the free-to-play sector of the game industry, you know this number means nothing: the game is free, so players will eventually try it out. In the mobile F2P market, nobody reports "registered players": what matters is the number of monthly users, and the average revenue per user. In fact, if we look at Hearthstone as a free-to-play mobile game, it is an outlier in several ways. And it's not necessarily a bad thing.

First, the business model. Players can earn coins, a soft currency in the game, by completing daily quests. One new quest becomes available per day, each quest takes 1-2 hours to complete, and grants 40-60 coins. Players can also get coins by winning games against other players. The amount is much smaller though: 10 coins every 3 wins (a match takes 10-15 minutes). Each pack of five cards cost 100 coins or $1-$1.5 if bought with real money. Cards can also be crafted from dust, another in-game currency. Dust can be acquired (nearly) only from cards bought with real money. So the game is free to play, but with 5 new cards roughly every 2 days, non-payers will find it excruciatingly slow to progress compared to other free-to-play games.

Second, mudflation. Some cards from the Gnome vs Goblin expansion set clearly outclass cards from the base set. For example, the Murloc Raider from the base set, has 2 attack, 1 HP, and costs 1 mana. The Clockwork Gnome from the expansion has the same stats, AND gives a 1-cost utility card to its owner when killed. I admit that this kind of outclassing also happened between the free cards and paid cards from the base set. For example, the River Crocolisk from the free base set is outclassed by the Amani Berserker and the Bloodsail Raider (both paid/crafted cards). So balance-wise, it's as if the set of paid cards was the first expansion, and Gnome vs Goblin cards the second. Either way, non-payers can't compete against players who purchase (expansion) cards.

Last, the daily quests. Blizzard first came up with daily quests in World of Warcraft, 6-7 years ago, to give people things to do while waiting for the next content patch. They had removed the cap of daily quests completable per day, and realized that "that really leads to burn out". Mobile free-to-play games started using daily quests as a way to retain players, 3-4 years ago. And now, Blizzard is back to using daily quests to retain players. But this time, they cap the quests to 3. Compare this to the dozens of achievements in Clash of Clans, where there's always something to look ahead for. Players could play hours at a time to push for Clash of Clans achievements. But in Hearthstone, quests run out quickly, so there is little reason for players to stay longer than necessary (except maybe leveling up or winning, but the rewards are so much lower than daily quests that they don't seem worth it). I also suspect that players eventually get tired of doing the same quests again and again. Cleaning up Naxxramas brings a good change of pace, and has very interesting mechanics, but each aisle cost 700 coins, so it only happens once every 2 weeks. Too bad ... So daily quests: somewhat good for day-to-day retention, but probably bad for session duration.

Private server emulators

Before anything, this post does not (and can not) provide enough sources. And considering the legal issues faced by private servers, many of the links included in this post may become broken at any time. However, I have had some experiences on RO private servers and I have looked at several other MMOG-emulator source codes. Although I believe that for some games, there are more people playing on private servers than on the official ones, private servers (hopefully?) do not receive a lot of coverage. In December 2009, the BBC wrote a somehow sensationalist though decently informed article in which they interviewed a few private server players and administrators as well as official MMOG companies.

General facts and numbers

Although projects such as bnetd or PvPGN are multiplayer gaming service emulators, they do not fit into the category of MMOG emulators mentioned in this post as private server emulators.

Emulators are simulations of the server side of an MMOG. Private servers launch these emulators to provide free versions of mostly any currently popular MMOG: Aion-emu, eAthena (RO), Arcemu (World of Warcraft), L2J (Lineage 2), Clone Wars (SWG) or EQ2emulator (Everquest 2). Some emulator projects such as Mangos try to teach about large-scale C++ projects and claim our software is not intended for running public servers, and we do not support that.

In fact, there might be private servers for both P2P and F2P MMOG (although I could not find any emulator (or private server) for Maple Story, Runes of Magic or any gpotato game for instance). It can seem obvious that some players go on private servers to play for free, but there might be other reasons such as particular custom game design choices making the game easier or with less grind.

I personally believe that private servers could be used efficiently to increase the game longevity at no cost for official MMOG companies. As Celia Pearce wrote in book 1 of Communities of Play, some players even instigated a network of player-run Uru servers to allow players to run the game after its initial closure. Such servers cost nothing, generate more UGC (from better quality) than simple players. This idea is actually close to the notion of abandonware, but with much more players. Playing an old famous game makes potentially players want to know recent games from this company. In an era when Intellectual Properties are golden (see the Final Fantasy, Call of Duty, Fifa, Warcraft, GTA and other Mario series), it may be wise to advertise the most recent sequel of the IP series through the series' former hits. Anyway, whether official MMOG companies want it or not, it is increasingly unlikely that any company, government, or nation can successfully inhibit the near-term and mid-term societal dispersion of FOSS or the FOSS movements (Walt Scacchi, 2007). Better use or influence it than endure it.

Players and administrators

One may wonder how much money do official MMOG companies such as Blizzard, Gravity or NCSoft loose. This lost is hard to estimate for several reasons. First, neither the number of private-servers nor their number of players are known. Until now, I have not heard of any population estimation. Second, it is not obvious that private-server players would pay anything to play on official servers. Moreover, the hardware and network infrastructures needed to host an illegal server can cost less than a hundred dollar per month for several hundred peak concurrent users. Although some servers rely on a few player donations, most of the time the administrators do not need to rely on a RMT system to keep their server afloat. Hence, most private server players are not likely to be sources of revenues if they were to play on official F2P MMOG servers.

Until now, most of the emulator projects I have seen are the results of a forking from an other open-source emulator project. Usually, there was only one main emulator project set up during the alpha or beta version of the MMOG development. The duration of an emulator project depends on the motivation of the open-source team. Update follow-ups, maintenance (quick and efficient fixing of the bugs reported) and technical support (tutorials, guides) mean a lot to an emulator community. But at the same time, they mean a lot more exposure to legal authorities, and official MMOG companies threats.

Emulators

To connect to a private server, most of the time, one has to use a slightly altered version of the official game client. The original client can be downloaded from official websites. When the original client is installed, a text file such as Realmlist.wtf for WoW or sclientinfo.xml for RO can be edited to make the game launcher executable connect to the private server. The whole process is really easy, and I do not understand yet why such files stay accessible, cleartext and human-readable at the root of the game folder.

The server-side is, however, fully developed and maintained in open-source projects. At the beginning, original MMOG servers are either reverse-engineered or stolen. That is why I find that depending on the age of the pirated MMOG, the emulator community relies on different pillars. Emulator projects need sneaky and relatively high-level hackers to start. Then more mainstream coders come along and contribute to the project code base. Official updates are reported on forums by people who play on official servers or directly from database websites. Support is given to novice server administrators, and a community can develop and share the products of its creativity (new items, new quests, etc.).

RO Official F2P servers

This is following my last post.

F2P servers strategy

... but considering that :

• a lot of RO players are Asian (I could not find any proof of that but I truly believe it regarding the reaction of surprise all Western people have when they hear that RO has more than 10M subscribers, considering also that according to wikipedia, though unknown to many Western players, the game took Asia by storm)
• F2P Asian MMO Games (like Maple Story for instance) could attract RO subscribers according to Aaron Delwiche

Gravity changed its (world) strategy in launching F2P servers such as Valkyrie for iRO or Baphomet for kRO. Also, the French server fRO which used to be P2P became F2P in December 2008. The Russian server ruRO is also F2P (I do not know if it was P2P before).

Valkyrie

This server is an iRO server and opened in September 2008. The game on Valkyrie is harder (XP is harder, Teleporting is more expensive, Kafra Mall Items are more expensive, etc.) but it is a free server, so players go to play on it. Actually, there are more players on Valkyrie than on the other P2P iRO servers (see ropd.info).

Considering the 4 figures on the left concerning players on iRO servers Loki, Chaos, Iris and Valkyrie, some comparisons have to be made :

• Different server ages : Valkyrie is much younger than Loki/Chaos/Iris, so I think there is a lower ratio of high-level people on Valkyrie than on P2P servers.
• Different guild involvement : Usually, people go into a guild when they have a bit of strength to bring in, that means when accessing job 2, at approximately level 60. So if we forget avatars who are under level 60, the P2P servers have more than half of their high-level avatars in guilds while in Valkyrie it is approximately 9.000 high-level avatars in guilds for 26.000 not.

From these facts, I do not think that it can be stated that the cost of the game experience influences the type of gamers. An easy conclusion could be : Iris/Chaos/Loki are more hardcore/experimented/PGM servers while Valkyrie is more casual/fun/low-level. But I doubt that it can be easily proven, and some very skilled players (like Doddler for instance) do play on Valkyrie.

Baphomet and Doppelganger

Since I can not read Korean, it is hard for me to gather sources concerning the kRO F2P servers, so I will not detail this part much. kRO Baphomet was launched in May 2008 and is also harder than other kRO servers. As I wrote before, RO F2P servers gather sometimes more players than P2P servers (see Server selection screen nearby), and it is the case for Baphomet. More about Baphomet on Doddler's website. The motivation for opening a free server at this time was the declining number of users. Doppelganger opened in June 2008. It did not bring as many users as Baphomet so the 2 were merged in April 2009.
Anyway, the strategy change consisting in opening F2P servers has been definitely fruitful because Gravity says in April 2009 that the subscription revenues increase in Korea was primarily attributed to increased revenues from launching free-to-play servers.

fRO

To my mind, fRO tries to push the player to buy a Premium Account, or the upgraded version of it : the Infinity Account. I do not know about ruRO (which is also F2P), but it might be the same as fRO (ruRO has at least Premium Accounts).
A fRO Premium account is a monthly 7€ subscription, while an Infinity account is 199€, providing a permanent VIP status and some bonus items.
The iShop is the same thing as the iRO Kafra Shop. It is through this website that users can buy virtual items.

I think that tokens of micropayment are a psychologic easier way for the user to buy virtual items with real money. The reason might be because people can hardly admit they are buying game items with real money, they need an item to make the transition : website tokens! In fRO, these tokens are named Karat. Actually, Carat is the name of a clown monster in the game, so maybe the Karat currency comes from its name. Currently, 100 Karats are approximately 1€.

In my previous post, I took the example of the Giant Flywing item that can be bought on the iRO website with Kafra Points. On fRO, a user buys a Giant Flywing for 10c (10 Giant Flywings for 100 Karats). Compared to the iRO 0.75c Giant Flywings, there is quite much difference.
I think the only reason explaining this difference is the will of Gravity Europe, administrator of fRO, to produce an amount of money big enough to be compared to what other Gravity group branches produce (ruRO, jRO or even iRO). But it is quite difficult for Gravity Europe, because the French player community is much smaller than iRO's, and therefore is likely to bring less profit. So the same products are more expensive on fRO than on iRO in order to «cope» with the size of the community.

Bubble-gum, a kind of item which increases experience gained in killing monsters (see Doddler's BubbleGum tests), is the most sold item IG, but is also the best selling item bought with real currency (€). Lucky Clip is a kind of item that increases the drop rate of monsters and is also among the best selling items. All the other items are «everyday life» items : Oridecon and Elunium are used to refine and repair player weapons and equipements, Yggdrasil Leaves are used to resurrect people and Blue Gemstones to teleport people from a place of the world to another.
What is interesting with Lucky Clips and Bubble Gums is that these items are not dropped by any monster nor sold by any NPC, hence all these items are available to players because they have been bought with euros. That means that even if Gravity Europe does not sell (itself) zeny for euros, roughly 400.000z = 100Karat = 1€. On igvault.com it is possible to get 1Mz for nearly 6€. That makes a huge difference with iRO where it is possible to get 20Mz for 6€/8$. But what is more interesting is that Gravity Europe has a twice better change rate than illegal websites. Because some people want to absolutely soften their game experience in buying items like Bubble Gums or Lucky Clip to get more XP or drops, this could be an explanation why they would rather buy these items through ragnarokonline.fr instead of another ways.

Business Model improvement

RO's leveling is definitely hard. Much harder than many well-known current MMORPGs. But with the opening of F2P servers, I do think that more casual players are willing to play, and even pay a few $/€ to appreciate more their time. Another particularity of RO is the WoE system ; a WoE is a battle between rival guilds in a castle in order to possess it and get rare items its Treasure Boxes contain. But sometimes it is difficult to build a character with PvP stats because these stats do not match PvE stats at all.
For instance, when playing a Priest (typical support class) in WoE sessions, a lot of Vitality (VIT) is needed so that your avatar does not get killed easily. On the other hand, not much Intelligence (INT) is necessary because not need many SP (= mana) are needed. But the easiest way to have your character leveling up as an Acolyte (the class the player has to be before becoming a Priest) relies on much INT to inflict more damages on Undead monsters.
Unlike most of all private servers, in official servers there are no NPC who can reset the player's stats. Hence an iRO survey in July 2006 reported that 68% of the 4266 participants of the survey say yes to a value-added service that provided a skill or stat reset and 28% said no. In another survey occuring in January 2008, 56% of the 7229 participants said they would pay for a Service or Item that provided a Full Stat Reset and 14% said no.

The only currently available service on iRO consists in buying (directly, without Kafra Points!) 20 Stat Points for $10. A level 90+ avatar has more than 800 status points. To move from a character build to another, not all the stat points need to be reset, but to my mind, it takes much more than 300 points. To my mind, this definitely can be improved ...

fRO has nearly the same system as iRO. This thread shows that it is 40€ for a 100 stat-point reset, and it is free if you have paid a premium account (199€). However, this reset is performed only ONCE on your character. The price can be compared to the iRO price of the nearly same service (however, the iRO stat reset can be repeated many times). How this stat reset is performed on fRO is explained on fRO forums.
I do not know the amount of «Infinity» accounts, I do not know the total amount of people using this service, and I do not know how many people have been using the stat reset service on iRO, but I bet that the F2P players use it more than the P2P players. Recently, a RO player told me that he liked that people are «equal» when they have all paid for the same service (P2P), but he definitely finds «unbalancing» the fact that some people could buy virtual items with real money (F2P). I think that is a reason why he's playing on private servers ...

RO Official Servers and money

First, if you do not know what RO is, you can read this post.

kRO Sakray is the most up-to-date RO server worldwide, maybe because Gravity is a Korean corporation (and because Sakray is the usual test server). For instance, one of the latest major updates of the game is called Renewal. This update occured in July 2008 on kRO Sakray and in June 2009 on all kRO servers but has not yet been implemented on iRO servers (no update has "Renewal" in its title, or on the official server features kRO is the most up-to-date server). I would have liked to write about kRO because :

• kRO is the most up-to-date set of servers (containing kRO Sakray, the most up-to-date RO test server worldwide)
• kRO contains Asian players, and as I wrote before, RO is mostly played by Asian people
• Asia MMO Gaming is not really known from Western countries. Also the by-products in Asia may be more widespread than in Europe and America, the game habits might be really different, etc.

But I can not read/understand Korean, so what follows are considerations based on iRO, the RO international server that I find most representative as a non-Asian (and understandable) server. iRO opened in June 2003 and is only a year younger than kRO, so there should not be any differences because of the age of the servers.

Concerning the administration of the servers, kRO is administrated by Gravity Corp. and iRO by Gravity Interactive (cf the server list). I do not know the relationship between these 2 firms, but each time in this post I may write the name «Gravity», it will stand for the iRO administration.

Talking about money, the RO IG currency is called zeny (z). The only origins I could find for this name are noble in Russian and a slavic word for woman (looking for zeny on google image leads to funny results ...).

Value-Added Service and Kafra Shop

As I already wrote, subscribtions are roughly $10 per month. But giving players the possibility to buy IG items or services related to their avatars with real money could bring some more money to Gravity.

First, users can use Gravity's Value Added Service for character renaming, moving (to another server), gender changing and status points reallocation. I think this service may exist since the creation of the servers because it consists only in database management.

Second, in December 2004, a survey on iRO website reported that 55% of the 1001 participants would ever pay real-world money for in-game currency or items, while 45% said they would not. Apparently real currencies against z has not been set up by Gravity yet (and I do not think it will ever be set up), but some websites suggest 6€/$8 for 20Mz.

Anyway, in June 2007 the iRO Kafra Shop opened (maybe this type of online shop already existed for a long time on kRO). Kafras are NPC located in any town or at the entrance of any dungeon to provide VERY USEFUL services such as :

• Saving the player's position so that when your avatar dies in a dungeon, he/she returns to the dungeon entrance
• Opening the player's storage so that an avatar can store drops and equipements
• Teleporting the avatar from a place to another

So the name for this on-line item mall was really well-found to focus the player's mind on usefulness. The content of the item mall consists of any kind of equipements or consumable items. And indeed some of these items are really useful. For instance, the Giant Flywing is the only item in the game that gives a group leader the possibility to teleport his group where he is. The user can buy Kafra Points with USD, on a $75 for 10k points basis.

Micropayments are sometimes used for items contained in boxes (500 Giant Flywing in a 500 Kafra Points box, which means 0.75c/Flywing). As explained on wikipedia the use of a custom token like the Kafra Point is very common in MMORPG.

When the Kafra Shop was introduced, all RO servers were P2P. It is only with the introduction of F2P servers in RO that things changed a little bit.

Furcadia

From wikipedia

To know what Furcadia is, simply read wikipedia. Among other things :

• up since 1996, that makes it the oldest still up MMO
• MMOSG
• F2P, bonus items can be bought IG or on a special website
• users create content (integrated in what is called a "dream")
• anthropomorphic (cat, ferret, cow, bug, ...) avatars
• only 1 server, 4K player-peaks, current average of 2K
• player-brought content called Dreams

Experience

What follows is what I experimented, it is definitely subjective (that's what I felt) and biased (the current "context" I experimented this game is maybe very different from yours, were you to experiment this game by yourself).
Since it's free to play, let's try it.

Avatars

Arriving in the world, as usual, I have to create my avatar. Multiple avatars are possible on an account. Considering the possible character customizations (animal, gender, colors ...), everyone tends to look the same IG. Maybe is it because this game is quite old. Also in Ultima Online I found players looked quite the same, and these games use comparable graphisms. Moreover, almost all avatars' gender I met where "unspecified" (between male and female). Except me, I found no male avatar. Failry normal : "Women are social beings, like men, but social" (DB, June 2009).

Meeting people

Obviously, what do people do in MMOSG? They socialize. Actually, I found more people AFK than really present. Lots had a profile "currently at work". During my 20 minutes IG, no one talked to me. Some people were busy talking privately, surely in private channels or somewhere hidden from me. A few people publicly talked, in a slave language with weird characters - that could have been Russian.
After a while, I found a character asleep on cushions. Her name was Natial and she was, like many, from an undetermined gender. What was most striking was the description of her avatar displayed in my dialog bar (click on the screenshot to see it). Following the link written in her description, I felt on a website displaying her sexual, Furcadia-animal and some little other tastes. Obviously, this must be written to RP, but when people have to choose a background for their avatar, they quite often put sexual content. Maybe is it because they hardly dare mention such things IRL?

Dreams

Dreams are a very good idea. World areas brought by players can be a very valuable addition to the game experience. In Second Life, some players/inhabitants have carved or drawn wonderful artworks. But in Furcadia, the Dreams are actually pretty ugly (see the 2 screenshots). Maybe I went inside the worst dreams of the server?
Dreams are scripted by players. The interface is a basic notepad with a window containing triggers and effects. trigers, conditions and effects available remind me of Age Of Empires 2 scenario editor triggers. This tool is definitely not made for expert developers (compared to WoW LUA macros and add-ons for instance). Dream content is uploaded by players who have created the dream. An avatar enters a dream through a "warp", a white grid-cell on which he walks. When a player enters a dream, the content is downloaded. I hope for the server that the content is sometimes stored somewhere on player's computer, and not reloaded from the server each time the player access the dream. It is possible for player to access URL through the game. Websites can be displayed through the player default web browser automatically when going into a dream, when clicking on a link in an avatar description, and maybe in other ways I do not know.

Ergonomy

The interface for walking is not very friendly : mouse left-click on an adjoining grid-cell or arrow keys to move, but the "pavement grid" is diagonal/in staggered rows, so pushing "up" makes your avatar go top-right ... Pretty bad, but I think players can get used to that in less than a few hours playing.

Business Model

Considering the current dragon-avatar prices and the amount of people having a permanent dragon avatar, I understand how the game can survive. I honestly do not know if Furcadia owners are getting rich with their game, but I can believe this business model works sufficiently well.
Also, I have seen IG quite many avatars having a customized portrait. The cost is between $5 and $10 depending on the amount of slots bought at the same time. Furcadia is certainly old, but looking at the amount of virtual items they offer through their real shop, I believe their Business Model must have worked well. And I do not understand why the wikipedia page concerning micropayment still mentions MMOs use micropayment : $5 is way too much to be considered as micro (according to wikipedia thousands of micropayments are needed to reach a dollar scale).

My feelings

• soppy, mushy : after having read a lot of avatar descriptions such as "[Single, not looking]", "Heart-shaped face of seductress, or "if there's anything, just ask me [I might not be around]". Moreover, the game owners have had sufficient funds (through their real shop) to have their game still up. That means many people have bought goodies. And I dont like goodies ...
• small-range socialness : definitely an MMOSG, if you want to know new people, you have to move on. But that's a game, so it is easy to dare do something.