107. Retail Plus: Is this the Future of Gaming? [Updated 28-03-25]
Ubisoft's Assassin's Creed Shadows is a retail game ($70) and a Game as a Service, potentially making the game cost (and generate) hundreds of dollars per unit. Is this a good idea for developers?
This video by Mugthief is what prompted this analysis, as I’m not motivated to do a product-specific analysis here as I did with Diablo 3, Guild Wars 2, or Path of Exile 2.
My purpose here is not to determine if the game is good, or to predict how this specific game is going to monetize. What I’m doing here is explaining the dynamics of combining two very different business models (F2P GaaS and Retail) into one larger more complex business model. I will go over the various complexities, the pros and cons, and explain how consumers are likely to respond/react to this.
I’m going to mostly gloss over the ethical implications and focus on if this is something that you as a developer will benefit from if you adopt it. I will touch on the ethics only in as much as it will affect consumer reaction and adoption, and thus how it will affect revenue trends.
Anything that raises the cost of a game (like most uses of data analytics) will be bad for consumers but potentially good for developers if it does not negatively affect adoption/retention. Thus this last condition is going to be the meat of this paper.
The Pros/Cons of F2P/GaaS
The F2P business model only generates revenue if you can entice or force consumers to spend in your game after they’ve had a chance to evaluate it. This isn’t all that different from a demo, as it might be that you are giving the player a taste of the game and some higher functions/content might essentially be paywalled in various ways.
This is generally a very pro consumer model and that’s why it has dominated the industry since its introduction in 2001 by Nexon. That said, “fun pain” methods of forcing consumers into spending by harming them if they don’t spend are called out fairly rapidly in the gaming community and don’t tend to do as well today as they did back when this was being promoted by Zynga.
If your product sucks, then the F2P model really isn’t for you because consumers will be able to come to that realization and will avoid spending.
The other huge advantage of F2P is that it enables discriminatory pricing. That means that if one person likes your game but only can afford $10, you get that $10. But if someone else likes your game and can afford $500, you get that $500. You want to grab as much as you can from the total budgets of all consumers that have downloaded your game.
As F2P evolves to Games as a Service, your ability to channel additional content into your product means you can theoretically generate revenue eternally. Thus this is where the industry has been migrating on pretty much everything. It’s also why I’ve been advocating for GaaS for 20 years now and all of my designs are GaaS. If you follow the link, I also blame adoption of GaaS on why the industry (and especially Ubisoft) has been imploding and laying off so many people. Not because GaaS is bad, but because it’s a much more complex model than original F2P and these nuances seem to be lost on management. The skill levels needed to successfully deploy GaaS might not exist in the veteran F2P monetisation staff you have hired, and skills well beyond monetisation must also be staffed on your team.
The Pros and Cons of Retail
Retail is great if your game development sucks but your marketing team/budget is strong. Refunds are increasingly difficult to get and once you’ve got the bag you don’t need to care if people like your product. You might get downrated, but not everyone pays attention to reviews. Putting out bad product means you will take brand damage. Ubisoft in this case has a lot of brand damage (because they don’t understand GaaS) and the studio is on fire, so a lot of players will hesitate and check reviews before making a retail purchase.
Indi developers that make relatively simple products depend on retail sales. AAA developers that have strong brand recognition also use retail since their brand value can drive a lot of sales. When that brand value turns negative, players and influencers will tend to neg your product before it even comes out. Having the developer try to shame people for negging just demonstrates a sense of entitlement and a general disconnect from reality.
[Still at Ubisoft, but post deleted]
Generally, retail by itself has been dead for larger more expensive projects for a while because there is a legitimate fear that consumers will reject a product if it has a retail price tag of $100+. Without some form of discriminatory pricing that’s just not enough to pay for larger projects.
GaaS
Since I’ve already written an entire paper on GaaS recently, I will keep this part short. GaaS is very complicated because it expects players to keep spending (and of course playing) on a product for a long time. Like my GaaS products (World of Tanks Blitz and World of Warships) which are still pulling in strong revenue after 11 years. But even those designs are on the cusp of being obsolete, with much more advanced models well developed (but not yet deployed).
People play games online because they want to play with other people, not just to get faster patch updates. They don’t need to play online for that. All of the advanced models give players what they want by optimizing the benefits of multiplayer environments. The involved economic and social dynamics of having people cooperate and compete makes a GaaS a much more complex undertaking to build.
Studios that under estimate the complexity of these projects can throw huge budgets at these games and lose big. Hiring people who are underqualified who then blame consumers on the failures of their designs, like our mate Stevy above, just multiplies the damage. Assassin’s Creed Shadows isn’t even a proper GaaS as it is a single player game. This is an example of a studio chasing GaaS revenues, using what they believe are GaaS methodologies, and as many microtransactions and currencies as they can dream up.
Best Practices for GaaS
I established the rules and best practices for GaaS games back in 2012 in my Supremacy Goods microeconomic model for interactive media. I had not planned to publish it so early, but after the UK government detained me on a visit to a studio there and stole a physical copy of it, this forced me to go to press. Since then the industry has rapidly adopted these guidelines and revenues for online games have skyrocketed.
Well, until the last 7 years or so after I started (successfully) predicting an industry implosion. Those initial warnings came from my analysis of the misuse of data analytics in companies like Kabam and Gameloft where Stevy worked for 4 years. I’m using Stevy as a good example here not because he’s unique (there are probably 1000 Stevy’s out there at this point), but because he kind of volunteered for it by being an example of the consumer antagonistic culture that I warned about here.
If you go back to Supremacy Goods and compare it to the monetisation design of games like Assassin’s Creed Shadows, you will see that pretty much every rule detailed in SG is violated in these designs. That’s understandable since these designers didn’t start their careers until some time after SG was adopted by the industry. The consumer antagonistic companies that I warned about in Force Wars were also the most resistant to SG. But the people at Ubisoft should know better. They ask me questions every once in a while so they know who I am.
The consumer antagonistic culture in AAA that I warned about in Force Wars was already trending to consume almost all of AAA when I published my prediction paper about how that was going to turn out. Stevy is part of that monoculture. He’s still got his job because the entire studio culture is like that, they just are getting smarter about hiding it.
Their misuse of the information I published in Systems of Control in F2P I do find objectionable even though I’m trying to avoid making comments on ethics. Regulators have definitely read it, which is part of why they utilize my expertise and are starting to crack down. My advice in this paper assumes no regulator response to games like AC: Shadows, but that’s certainly optimistic.
Is Retail Plus Profitable and is it Here to Stay?
These are the primary factors forcing developers into Retail Plus business models:
No one wants to be the first to sell a game for $100 USD, but it’s going to happen.
As described in Force Wars , once a studio goes consumer antagonistic (Dark Side) the monoculture will force out anyone who isn’t anti consumer. This restricts their design and business model options to the ones consumers hate.
These models are the most obsolete models still in use because of consumer backlash, as I describe here. They are already non-profitable which is why AAA is imploding and layoffs are everywhere despite huge demand for games by consumers.
Dark Siders have limited skill sets, and follow the philosophy of Roger Dickey and “Fun Pain”, which is on full display in AC Shadows. The video shows you exactly where this festering abomination came from, you will recognize it immediately as you listen to it. Those skills are obsolete but when you shop for an “economy designer” on LinkedIn it will direct you to people like Stevy who claim 10 years of experience in that role. Your game will tank, consumers will say they hate the business model, and Stevy will tell them to shut up and grow up. This isn’t new, it’s been building inertia for a decade. I’ve been chronicling it in my papers.
AC Shadows is potentially a great game. It was intentionally turned into a boring slog to accommodate the Fun Pain business model. If the game was good, people would have no reason to spend more to repair it. So it’s bad by design.
AC Shadows is essentially a demo that costs $70. For the full game you have to pony up $30 to $300 but Ubisoft doesn’t want to be honest with consumers about how much the game costs. This is ultimately what consumers will complain about the most as they realize what was done to them.
It might work because of sunk cost fallacy. Does the customer dump the game and eat $70, or pay another $30 to save $70? But this means enormous additional brand damage. Ubisoft likely doesn’t care because they know this is their last game, so brand is irrelevant at this point.
If you’re saying I’m dancing around the question of if it could work, you’re right. It could work, but not like this. As I predicted in Force Wars, you can’t hire and retain any Light Siders once you have a Dark Side company culture. And as I explained there, they will throw each other under the bus to survive a purge, so any purge would have to be 100%. I was a bit shocked to hear Asmongold say the exact same thing (12:30 in) two months ago. I don’t think he reads my papers so this is an example of gamers organically realizing the reality of their situation. Note that he was commenting on EA’s latest flop, and EA was the company I used as my example in Force Wars.
So how would a consumer friendly studio go about making Retail Plus work? There is nothing ethical/legal stopping a studio from putting a subscription on top of a retail product. This is how World of Warcraft was sold and it was a massive success. Yea they added microtransactions later, which lowered the quality. But that’s Activision and they’ve lost a lot of brand value. When they last interviewed me in 2018 (I’ve been there 4 times since 2009 for interviews) they got mad at me for explaining how I could improve the quality of their products. They said they just wanted to know how to improve their loot boxes. One of them even did a super exaggerated yawn to make sure I knew he was insulting me. During the interview.
The limitation of putting a mandatory subscription is that it does not allow for discriminatory pricing. If it’s optional, that’s essentially 2 price points. You can have more than one subscription tier, there’s no law against it. You could have a “no subscription” mode and up to 3 subscription tiers. Then you could have discriminatory pricing without a single microtransaction.
The problem here is that you would kind of have to admit there was subscriptions in your game before you sold it, and people would have the ability to determine the cost of the game before they bought it. So if you were trying to hide the cost of your game to consumers (as Ubisoft was here), that would be a non starter. Trying to hide the cost of your game to consumers is currently illegal in Europe, but if Ubisoft thinks this is their last game, they don’t really care about being shut down.
So yes in a hypothetical situation that does not exist, you might be able to implement Retail Plus and be profitable, but the model is already obsolete due to consumer resistance and more advanced models in the pipeline. Studios that have spent the last 5 to 10 years doubling down on consumer antagonistic business models don’t want to fix it if it isn’t broke. But even when it was obviously broke, they still didn’t want to fix things because firing entire studios and starting over would look bad to investors. Now they are in the situation where they can’t afford to do so even if they wanted to.
The biggest elephant in the room is labor. After 10 years of telling people “we just want to know how to improve our loot boxes”, the industry is filled with 1000 loot box techs. Since that’s all that was hired, that’s all that’s left. There are probably less than 5 people left in the industry (an optimistic number) that would know how to make Retail Plus work in a GaaS environment. If regulators get even slightly more aggressive, the demand for those people would be overwhelming. That means their price would skyrocket. Even higher than what data “scientists” were getting paid with their 3 month certificates back when I wrote Data Implosion. Now we have a lot of data “scientists”. There are literally hundreds of places you can get one of those pieces of paper. Google it if you don’t believe me. I dare you.
The ultimate take away is that if your game is good enough, players will spend more than $100 on it. It’s not a magic ceiling. You don’t need to sacrifice some roosters and burn incense. If you are intentionally bricking your single player game to make it so bad that people will want to pay you more than $100 to fix it… I think you should lay off the ketamine, check into rehab, and fire your CEO.
[Update 28-03-25: Two days after I published this paper Ubisoft transferred the Assassin’s Creed, Far Cry, and Tom Clancy Rainbow 6 IPs to a new subsidiary and sold off 25% of these IPs to TenCent. https://www.reuters.com/technology/assassins-creed-creator-ubisoft-sets-up-4-billion-euro-subsidiary-backed-by-2025-03-27/ ]