Category Archives: Business Solutions

Selling Character Slots Elder Scrolls Online

I ran two surveys on the TESO:TU (The Elder Scrolls Online: Tamriel Unlimited) forums to attempt to get a feel for how much demand there is within the player base for the purchase of character slots and what sort of value those character slots may carry.

Hypothetical Sales based on 100k Active subscribers
Hypothetical Sales based on 100k Active subscribers added for a graphical representation for folks.

 

Essentially I ask people if character slots were sold how many would they likely purchase. The following categories were utilized: 0, 1 to 3, 4 to 6, 7 to 9, 10 to 12, 13 to 15, 16 to 18, 19 to 21, 22 to 24 and more than 24.

The second survey included various price points per additional character slot and prompted the voter to select the highest price they would be willing to pay. To determine the appropriate values to use I had to find some benchmarks. I used the purchase of a new copy of the game at $50 and the console transfer deal value (16 character slots on a different platform for people who already had the pc version at $20. Note: it seems the 16 slots for $20 may have been a bug and it may have actually been 8 slots for $20 in any case I used 16 slots for $20). I also was limited to 8 voting categories to cover that range (plus an over and an under category). The following price points were used: $0, $0.01 to $1.25, $1.26 to $2.00, $2.01 to $2.75, $2.76 to $3.50, $3.51 to $4.25, $4.26 to $5.00, $5.01 to $5.75, $5.76 to $6.25 and greater than $6.25

The actual surveys are at:

http://forums.elderscrollsonline.com/en/discussion/169573/if-zos-sold-additional-character-slots-what-is-the-most-you-would-pay-per-slot/p1

and

http://forums.elderscrollsonline.com/en/discussion/169577/if-zos-sold-additional-character-slots-how-many-would-you-buy/p1

After a day of voting I took the totals from each category and took them to my excel spreadsheet for a little number crunching.

This image shows the weighted average calculation of the represented population as a whole.
Table 1. The weighted average calculation of the represented population as a whole. Average Slots in bracket is the median of the bracket so if the vote option was 1 to 3 then this number would be 2. The weighted average is calculated by taking the number of votes for a bracket divided by the total number of votes then multiplied by the Avg slots in bracket. The weighted average numbers were then summed to yield 3.41 which represents the average number of slots that would be purchased per person by a population represented by the sample 169 voters.

First I wanted to determine how many characters the average player would purchase so I devised a weighting metric to isolate that value which was 3.41 as can be seen in Table 1. Then just for curiosity sake I removed the votes who would purchase no slots and that yielded 6.87 as seen in Table 2.

Table 1. The weighted average calculation of the represented population as a whole. Average Slots in bracket is the median of the bracket so if the vote option was 1 to 3 then this number would be 2. The weighted average is calculated by taking the number of votes for a bracket divided by the total number of votes then multiplied by the Avg slots in bracket. The weighted average numbers were then summed to yield 3.41 which represents the average number of slots that would be purchased per person by a population represented by the sample 169 voters.
Table 2. The weighted average calculation of the represented population as a whole. Average Slots in bracket is the median of the bracket so if the vote option was 1 to 3 then this number would be 2. The weighted average is calculated by taking the number of votes for a bracket divided by the total number of votes then multiplied by the Avg slots in bracket. The weighted average numbers were then summed to yield 6.87 which represents the average number of slots that would be purchased per person by a population represented by the sample 84 voters that would purchase character slots.

Next I wanted to take the price data and determine what the ideal price would be to price a character slot in order to maximize the sale revenue. In order to do this I summed the number of players who voted in a particular price bracket and all more expensive brackets (the assumption is that someone who said their maximum price was $6.25 would be willing to pay a lower price as well, the same for other maximum pay values). These values are marked in the “vote at or below” column which is the number of voters expected to be willing to purchase at that price point. The “vote at or below” value was then converted to a percent by dividing the bracket value by the total number of votes to create a value which represents the percent of the population willing to spend money in that bracket to purchase character slots. The data were then multiplied (Avg Price in bracket * % that would buy * avg slots per player (3.41 and 6.87)). This creates a dollar value estimating the sales revenue per player for each price bracket (Note: Average price bracket is the median between the high and low values within a price range).

The 3.41 slots per player sales price indicates the average price each player (including the players who buy 0 slots) would spend. The 6.87 slots per player indicates the average prices that players who would spend money would spend. The end calculations for each step can be examined in Table 3.

Table 3.
Table 3. The calculation of the price a player would pay for character slots compared to how many slots a player would purchase. The highlighted row indicates the optimal price point for a character slot as indicated from the two surveys in this study. The optimal price is determined by identifying the bracket which maximizes the money spent per player and thus maximizes the profits (click to enlarge). It should be noted that $3.88 and $4.63 result in almost identical sales as such the cheaper value might be recommended so that psychologically more players feel included in the ability to purchase character slots.

Finally, these profits per player were multiplied by hypothetical active player counts to create a table (Table 4.) which allows an easy ballpark reference to estimate sales in the represented population at 50,000 account intervals.

Table 4.
Table 4. Estimated total sales at different numbers of active players in 50,000 account intervals.

Utilizing Table 4 should make it easy to ballpark potential sales on the developer side they would need to determine an accurate estimate of the cost to implement a character purchase option and then compare the value to the estimated sales value for their subscriber level. Simply subtract costs from sales and voila an estimate of the potential profits.

A last thought, these estimates should be used conservatively. They are accurate with regards to the sample population however without more information I cannot say how well the sample population represents the entire active accounts population.

 

Drive-Through Windows – Solution A Day

Background – Fast Food Dinner

Car sitting in the drive through.
A local krystals drive through.

A few weeks I drove through a McDonald’s restaurant and I went to the speaker and ordered my food. I then went to window one to pay and then to window two. while waiting at the windows.

The Problem – The Drive-Through Windows were left open

window left open
The Krystal’s window can be seen left open.

While at the windows for the drive through I observed that the customer service attendant kept leaving the window open. In fact it was open for more than 50% of the time that my car was at the window. I admit that I have not done a comprehensive study about how frequently drive through windows are left open. However, I have 30 years of experience as a consumer and can recall many occasions where this practice was par for the course. The main problem is that for a good portion of the year restaurants (or rather their owners) are spending money to keep their establishment climate controlled. Leaving the window open unnecessarily adds to the amount of energy used for climate control. In many cases this energy is in the form of electricity. Frequently this electricity is created by burning fossil fuels. Waste like this can significantly add to the total carbon emissions entering the atmosphere. These carbon emissions then add to global warming. Consider that there are more than 200,000 drive-through establishments in the U.S. alone. This is a huge total effect.

I like to promote protecting the environment while simultaneously benefiting people and protecting your pocketbook. This wasteful energy is a direct burden everyone involved. If a business needs to spend an extra $2000 a year on electricity because of this window then they must increase the cost of whatever product they are selling in order to make a profit. The increase in cost is passed on to the consumer who ends up paying for the wasted energy. Remaining competitive in an industry such as fast food absolutely requires keeping costs in check. Fixing the window problem will help with this goal.

The Solution – Close the Window

Perhaps the easiest and cheapest solution is for business owners and managers would be to create and enforce operating procedures to ensure that floor level employees close the window. This is every bit as bad as the 2008 discovery that starbucks was wasting 6 million gallons of water daily in the U.K. by leaving their tap on. A more expensive (but possibly more effective) approach would be to install windows that automatically shut. For the business owner either of these solutions will reduce the bottom line and increase profits. The reduces costs will increase competitive edge either with better paid staff, cheaper prices, or increased profits.

Conclusion – Shut the Window

Shutting the window will save money for everyone. It will also improve the atmosphere for generations to come. If you are an employee who works at a drive through window please remember this the next time you clock-in. I want to stress that many of the environmental problems I talk about are not limited to one company. Rather I mention larger companies because they are present everywhere. In other words while McDonalds and Krystal’s leave their windows open so do many other unnamed companies and Starbucks isn’t the only company who has problems recycling hot beverage cups and saving water they just represent a large portion of their markets.