Service, Our Money, and You

[Ziyyigo-Tipyigo]

The sad truth is that even though we pay the same amount we have always paid, SE isn't getting as much revenue off FFXI as it used to

Perhaps not as much revenue, but I suspect the profits haven't degraded too much.

Ignoring labor for the moment, S-E's overhead for running FFXI are servers and bandwidth. The bandwidth they need is directly proportional to the number of subscribers they have, so that part of the overhead will more or less balance out. As for servers, just as we're no longer playing on Pentium III systems running Windows 98, the servers have likely been upgraded over time as well (probably coincident to world mergers), to machines that can churn out more FLOPS and faster data access times for less kilowatt-hours; realistically, the costs for operating the servers over time must go down, even if the user base was constant.

The primary cost driver here is going to have to be labor. Like bandwidth, customer support costs are directly proportional to the number of customers you have to support, so that too can be safely ignored. As for developers, part of that expense is going to come from trying to support aging platforms (PS2 and DirectX 8) that nobody focuses on any more (it will eventually be cheaper to write a whole new client than to support the existing code). The rest of their costs depend on how many man-hours they actually put into "developing."

And I'm not seeing a whole lot of "developing" going on.

[Yinnyth]

Perhaps not as much revenue, but I suspect the profits haven't degraded too much.

Ignoring labor for the moment, S-E's overhead for running FFXI are servers and bandwidth. The bandwidth they need is directly proportional to the number of subscribers they have, so that part of the overhead will more or less balance out. As for servers, just as we're no longer playing on Pentium III systems running Windows 98, the servers have likely been upgraded over time as well (probably coincident to world mergers), to machines that can churn out more FLOPS and faster data access times for less kilowatt-hours; realistically, the costs for operating the servers over time must go down, even if the user base was constant.

The primary cost driver here is going to have to be labor. Like bandwidth, customer support costs are directly proportional to the number of customers you have to support, so that too can be safely ignored. As for developers, part of that expense is going to come from trying to support aging platforms (PS2 and DirectX 8) that nobody focuses on any more (it will eventually be cheaper to write a whole new client than to support the existing code). The rest of their costs depend on how many man-hours they actually put into "developing."

And I'm not seeing a whole lot of "developing" going on.

I love using overly simplistic math to make complicated issues easier on my brain, so...

r=revenue from players
x=all standard operational costs including bandwidth, electricity, customer support, server maint., etc.
y=leftover money for use in developing new content

Let's assume y = r - x and further we'll go on your assumption that r and x scale completely evenly with one another. Now let's assign some sample values to each! We'll say SE gets 200 dollars in revenue, and spends 100 on operational costs, so

200 - 100 = 100

SE can spend 100 dollars on developing new content. Now let's scale back r and x by 50%, so 100 dollars in revenue and 50 on operational costs:

100 - 50 = 50

SE can spend 50 dollars on developing new content.



So even if we assume operational costs and revenue scale perfectly with one another, the budget for development must also shrink if the revenue shrinks.

[Ziyyigo-Tipyigo]

I love using overly simplistic math to make complicated issues easier on my brain, so...

r=revenue from players
x=all standard operational costs including bandwidth, electricity, customer support, server maint., etc.
y=leftover money for use in developing new content

Let's assume y = r - x and further we'll go on your assumption that r and x scale completely evenly with one another.

That's not quite what I said.

x = x1 + x2

x1 = population-driven factors (bandwidth, customer support)
x2 = infrastructure factors (maintenance, electricity).

x2 always goes down over time, pretty much regardless of population (or someone needs to be fired), so x overall will go down over time. The average XIV player probably has more computing power on their desktop than what's required to run an XI world.

Regardless, yes, the available profit for development will go down over time. But it won't drop like a rock overnight, and it won't "coincidentally happen" around XIV's launch unless there was a mass exodus of players from XI to XIV at launch.