Originally posted by bhall43
The 70% flex return kept GLB alive for 5 years. Not sure how you call that a failed business method. Multiple MMO's with large financial backing and advertisement failed under that period. What they did was amazing. Unfortunately they couldn't capitalize on multiple ventures when they were riding high in order to retain customers and gain capital on new ones.
It can be looked at in a different way.
The attractiveness of their concept resulted in an unpredicted & unprepared for (and therefore not part of their 'business model'), massive initial participation surge that took place in an economy with high consumer disposable income just prior to the 2008 (and continuing) financial crisis. If they had followed generally accepted accounting principles and booked payments for unused Flex as unearned future income (some of which was long term, more than 12 months into the future) and matched that with the future liabilities (costs associated with supporting the game in order to earn that future income) and then operated on a budget that reflected the current income as they earned it, they would know if they had a successful model. Without access to P&L and Balance sheet I wouldn't know.
Cash is time. Time to establish your product with paying customers in order to gain more cash, and therefore more time. It is blood to a business. You can bleed and still be healthy, for a time, but eventually the body must heal and produce more blood or will die from lack of blood.
In my experienced opinion, future incentives to continue being a customer is superior to current penalties for not continuing being a customer. (Like a General who shares the booty of war with his troops instead of planting mines behind them to prevent retreat). The 70% flex return could be argued in both terms. Its a reward for continuing. Its being left behind when you leave is a penalty. The answer to which it is depends on the customer's current attitude towards the product. Therefore I would say what has kept GLB alive for the last 5+years is the customer base's hopes and expectations that the aspects of the game that they each like will remain intact and the aspects that they dislike will be alleviated. That is why some have left despite having large flex balances and some have continued to buy flex even though they had no flex balance.
As GLB present their next moves, those questions will be answered and determine the ultimate destiny of GLB et al.
The 70% flex return kept GLB alive for 5 years. Not sure how you call that a failed business method. Multiple MMO's with large financial backing and advertisement failed under that period. What they did was amazing. Unfortunately they couldn't capitalize on multiple ventures when they were riding high in order to retain customers and gain capital on new ones.
It can be looked at in a different way.
The attractiveness of their concept resulted in an unpredicted & unprepared for (and therefore not part of their 'business model'), massive initial participation surge that took place in an economy with high consumer disposable income just prior to the 2008 (and continuing) financial crisis. If they had followed generally accepted accounting principles and booked payments for unused Flex as unearned future income (some of which was long term, more than 12 months into the future) and matched that with the future liabilities (costs associated with supporting the game in order to earn that future income) and then operated on a budget that reflected the current income as they earned it, they would know if they had a successful model. Without access to P&L and Balance sheet I wouldn't know.
Cash is time. Time to establish your product with paying customers in order to gain more cash, and therefore more time. It is blood to a business. You can bleed and still be healthy, for a time, but eventually the body must heal and produce more blood or will die from lack of blood.
In my experienced opinion, future incentives to continue being a customer is superior to current penalties for not continuing being a customer. (Like a General who shares the booty of war with his troops instead of planting mines behind them to prevent retreat). The 70% flex return could be argued in both terms. Its a reward for continuing. Its being left behind when you leave is a penalty. The answer to which it is depends on the customer's current attitude towards the product. Therefore I would say what has kept GLB alive for the last 5+years is the customer base's hopes and expectations that the aspects of the game that they each like will remain intact and the aspects that they dislike will be alleviated. That is why some have left despite having large flex balances and some have continued to buy flex even though they had no flex balance.
As GLB present their next moves, those questions will be answered and determine the ultimate destiny of GLB et al.
