Recently, Jagex's CEO announced the sale of an in game item to facilitate real world trading between players: bonds. While reaction among players has been mixed from outrage to joy, one obvious part of the announcement seems overlooked. Jagex is selling bonds. This is not meant to be an article of doom and despair, predicting how players will leave the game because everything now sucks. Jagex is promising RuneScape's future because Jagex is selling bonds.
In the real world, a bond is an IOU. Selling a bond is like taking out a loan. Instead of borrowing from a bank, the borrower is getting money from somewhere else like regular people. In return for the money, the borrower pays back the amount plus interest. Bonds usually pay back higher interest than banks because they tend to be riskier. There is always a chance that the borrower cannot pay back the bond.
This is why I'm making a big deal about it. Jagex isn't selling in game credits, Jagex isn't selling in game coins. They're not selling in game gift cards or in game gift certificates. Jagex is selling bonds, which has a very real and well defined meaning for the rest of the world. Forget about the fact that bonds are trade-able in game, Jagex is promising to give players membership or spins or JCoins in the future if they buy it today. Jagex is selling an IOU, Jagex is selling bonds.
About two years ago I wrote an article describing how players could quickly figure out RuneScape's health and Jagex's monthly income simply by looking at the number of players included in the hiscore. Since then Jagex has introduced a couple new ways to further monetize their game apart from a monthly membership. These consisted of cosmetic upgrades through JCoins and extra spins on the Squeal of Fortune.
There is no doubt that Jagex accelerated their earnings when they introduced these items. Jagex found a new way to get extra money out of players previously paying $5 per month. Some complained (correctly in my opinion) that the new owners of Jagex were monetizing the game; they were extracting more cash per person than ever before.
These new earnings may have been a temporary boost that has since settled, and Jagex may have frittered away all that money, but no matter how quickly Jagex deflated that bubble of money it didn't matter. Jagex still had a loyal player base paying their monthly membership dues. The makers of RuneScape could still look forward to next month's rent; they still had a cash flow.
There is a huge difference with bonds in RuneScape. Jagex might earn a boost just like before. Players might buy dozens of bonds just like they bought hundreds of spins. These players might even trade their bonds for in game items, but the point is the bonds stick around. The bonds get stored away in banks when they're not redeemed immediately. Therein lies the problem.
Just like brush and undergrowth that dies and sits on the forest floor, bonds pile up in banks. Fuel stacks on fuel, bonds sit on bonds and all it takes is a spark to burn the whole game down. Jagex might be able to spend the money earned from bonds right now, but in doing so they spend their future. It's conceivable that in the future there are enough players at one time that decide it's time to call up Jagex on their IOU, and they use bonds in lieu of a real currency payment. They stop paying, but keep their membership.
In the future it wouldn't matter if RuneScape is popular, or the loyalty of the fans. The game could have record levels of people playing, game servers filled to capacity. All that mattered is Jagex created a bubble, spent all it's reserves from bonds. And they promised RuneScape's future, but mismanaged the funds. The bubble pops, and Jagex is out of a cash-flow. So much for promising RuneScape's future.