Editorial: Loyalty versus Profit: How Important Is Longevity?

Hello, readers! My name is Daniel ‘Deimosion’ Flink, and I am here once again to talk about video games. Based on a discussion from TSM Episode 2, I want to talk about an idea that frequently comes up in discussions among gamers: how important is longevity in gaming? Is it better for a company to seek customer loyalty, or profit? To discuss this issue, I would like to focus on two companies: Valve and Activision.

Valve has recently and famously announced that Team Fortress 2, their massively popular online FPS, is now going to be free forever. To access all of the game’s functions, one needs only to spend any amount of money in Valve’s “Mann Co.” store. Spend just ninety-nine cents on a weapon to gain full access to the game’s trading, gifting, and crafting capabilities. Additionally, Valve frequently updates Team Fortress 2 with new weapons, hats, and maps FOR FREE. Contrast this with Activision’s Call of Duty franchise. Call of Duty: Modern Warfare 2, our readers may recall, received two fifteen dollar map packs. Both map packs added five new maps each to the game, and the first DLC package added a new game mode. Two maps from each pack were simply reincarnations of maps from Call of Duty 4, and three maps from each pack were completely new. Let me reiterate, readers: for a whopping thirty dollars, or half the price of a BRAND NEW Xbox 360 or PlayStation 3 game, one could buy SIX new maps and FOUR old maps from Activision. I will give that information a moment to sink in before moving on in this discussion. Valve, by comparison, has added several new stock maps, a few new game types, and dozens of new weapons and hats to Team Fortress 2 without charging players a dime. Valve has decided to forgo some level of profit in order to bring gamers what they want. Could Valve charge for their updates? As the “Mann Co.” store shows, Valve can and does charge money for items. However, any non-aesthetic item is also available through crafting and random drops for free. Valve has sought not just profits but also gamer loyalty, and, in the long term, their business model is much better than Activision’s.

Gamers will and already are beginning to get sick of Activision’s profit-driven, loyalty-forgoing plan to charge for maps and new game modes. Valve, on the other hand, is guaranteed to sell an enormous amount of content based on customer loyalty alone. By forgoing short-term profit, Valve has guaranteed long-term profit through gamer loyalty. Customers will gladly continue to give Valve money for new games, as Valve has a proven history of quality games, excellent service, and a clear and obvious care for their customers’ desires, likes, and dislikes. Activision, on the other hand, will lose customers as gamers get sick of buying the same game every year or two while getting mediocre support and expensive DLC packs. Activision is clearly seeking to make as much money off their games in as little time as possible. And while this strategy has worked extremely well for Activision in regards to the Call of Duty franchise, other game series have shown that the short-term profit model works only for a few years. As discussed a few weeks ago, the once-successful Guitar Hero franchise was destroyed by Activision’s profit-seeking business practices. Once milked dry, Activision dropped the Guitar Hero series, despite what Activision’s higher-ups may say about a “hiatus”. While the Activision model is currently working out, there is no long-term sustainability, and Activision will lose customers rapidly as gamers move on to the next big FPS franchise, whatever it may be. The Valve model of sacrificing short-term profit to ensure customer loyalty and long-term financial gain ensures that their customers will be in for the long haul. Heck, Valve even makes profit off of their older games; I just last week bought the Half-Life One Anthology, a collection of 9-12 year old games.

I have, in the past, been known to call Valve Software “the greatest video game company in the world” due to their obvious concern for their customers and their continued support for their various games. By giving up short-term profit, Valve has managed to achieve massive customer loyalty. Whether including the Steam version for free in PS3 copies of Portal 2 or offering Team Fortress 2 for free, Valve has decided they clearly want to please their fanbase first, rather than simply lining their pockets with gamers’ money. In the long-term, I believe this will pay off for Valve; customer loyalty is a powerful thing for a business to have. Activision, meanwhile, will continue to do extremely well for a short while, but as IPs begin to fail and gamer loyalty to Activision’s franchises declines, their profits will begin to dry up.

What do you think, dear readers? Does Valve’s business model truly have sustainability, or will their attempts to please customers be their downfall? Is Activision truly a money-grubbing company that will destroy itself given enough time, or will gamers continue to stand Activision’s ridiculous policies? Let me know what you think in the comments, readers, and let me know what you think of these two companies. For this editorialist/reviewer, Valve will continue to be a favorite game developer. I do not like FPS’s as a general rule, yet I still would say Valve is a brilliant game developer, and I hope their business model continues to be successful. As for Activision, well, I do not have any interest in any of their current IPs; my interest in Guitar Hero died even before the franchise did. Either way, readers, let me know what you think about this issue; I look forward to reading your comments.