Happy Monday, and welcome to part one of my Week 13 Write up!
To start out I thought it would likely be fitting to tackle the most complex, and surely highly contested, point of them all, the money issue.
We all know it. We somewhat shrug it off, say it is a good investment as a hobby, that it’s cheaper compared to a real race car, but there’s no getting around it: iRacing is expensive and it is not getting any cheaper. Even as I write this we are a few days away from a brand new build that is going to move the cost up another $60 to own everything (before potential discounts, which admittedly there are many). Considering that is 2 LMP1 cars, 2 dirt ovals, and the 2018 spec Indy car a lot of people will struggle calling that value for money.
How expensive is it? When you add up all the content that needs to be bought, before you get into membership costs, the total investment is $1494 dollars, and after this new build we will be propelled over the $1500 mark.
That is a lot of money, and it is in my opinion the number one issue the sim faces moving forward. The current business model is, in my opinion, unsustainable to break out into a larger market as an esport. And it has nothing to do with the content not being worth it, it has everything to do with accessibility.
Esports has grown itself on accessibility and the fact it is relatively inexpensive. Because of that it has captured the hearts and minds of young people world wide and turned into a billion dollar industry. The adolescent/young adult age brackets are what catapulted esports to the level it is at for a variety of reasons. I believe the biggest of those is accessibility, and that is something Motorsport fans should understand deeply given that, for as long as I have been a racing fan, there’s been one belief shared by all motorsports together: We wish it were less expensive.
The ability for a young person to not invest a whole lot of money yet have some way to connect with their friends for hours at a time is hugely important. Therefore their focus in on games like League of Legends, Halo, Counter Strike, DOTA, HON, Starcraft and Overwatch.
The equivalent of millions of years of human history go into playing games each and every year. This is why the market has grown the way it has, and why the current surge of esports in the past decade and a half was able to succeed even through one of the worst world wide economic situations we have ever experienced. Esports is a value driven market. DOTA 2 is 100% free to play, League of Legends is Free to Play with the need to buy heroes (But with a decent variety of heroes on a constant rotation), and Counter Strike: Global Offensive is a one time fee of $15.
Those three titles are the power houses in esports at the moment, and they are absurdly inexpensive, and accessible to pretty much everyone.
So by the standards of most Esport titles even iRacing’s less expensive alternatives are expensive. $111 and $105 for Assetto Corsa and Project Cars 2 plus all their DLC, and $32 for rFactor 2. So even for a sim racing title, iRacing has put itself in a precarious position since it released.
The sim has done a good job maintaining any user base at all to be honest. Despite the physics and tire model at time not being their best, some features being slow to come out, the fact that the sim is in a successful position at all is somewhat shocking and if nothing else a monument to the work iRacing puts with constant updates and a good marketing strategy for their hardcore simracing fans.
The problem is I do not think the iRacing business model actually makes logical sense. The finances behind it are sound sure. Constant little updates give people constant small micro transactions which means a constant flow of income, even despite a small user base. The thing is, iRacing brings so much to the table that a reworked business/pricing model would put all but put the other sims out of business.
Sure Assetto Corsa has good GT content which will likely get better with the announcement of Competizione, Project Cars 2 has rallycross and Indycar, and rFactor 2 has the modding community to support a plethora of things.
But the thing is iRacing has all of that AND more. Official GT3 content, IMSA, Indycar, NASCAR, Rally Cross, as well as the big ace up its sleeve, the asphalt and dirt american short track content that no other sim can even pretend to mimic currently. If iRacing puts itself in a more competitive price point would any of the other sims be able to survive at all? They may have a couple tracks iRacing don’t, but is that enough to sustain an entire sim?
The only notable tracks Assetto Corsa offers that are not featured on iRacing are the Red Bull Ring, an updated Silverstone, Barcelona, and Mugello. All the other tracks are not nearly as important.
Even with Project Cars 2 iRacing has most those bases covered missing a few notable heavy hitters such as Monaco, a fully completed Long Beach, Hockenhiem, Fuji, Dubai and a few others. But iRacing has other circuits as well that PC2 does not have, and again an entire slew of american motorsport content that is not even featured at all with short track racing.
The only way iRacing does not bully these other sims out of the market, simply put, is with its current out dated business model.
And I know what people will say. The existing community will freak out. I can see the threads on the forum now with people complaining that they spent their money and now others can get the same content for much less.
The short and simple answer for these people has to be “Sorry, but it is time for us to move on”. There really is no other option if the sim wants to turn the corner and succeed as an Esport in any respect at all, because the sim has the biggest issue for any wanna be esport title: a small userbase.
What fuels esports (and real racing) is sponsorship, and sponsors like exposure. The easiest way to get companies investing in you is saying you have a large number of people who use your product, and the honest to god answer is iRacing simply does not. And on top of this, viewer counts for events are STRONGLY correlated with the number of people playing the game.
To show this, lets venture over to twitch, and take a look at some of the most popular titles streaming at the moment:
Streaming & Userbase
Now, I am writing this at a super awkward time for some of these titles, middle of the night for North America and early in the morning for Europe, and some of these titles make it difficult to find their player counts, but we can still draw some conclusions. And I can more or less guarantee that just about any time you take a peek at these numbers, unless there’s an odd event on (Notably speed running charity events or a huge tournament) this will always be a consistent metric.
Fortnite recently hit a new high of 3,000,000 players and currently its number 1 on twitch.
League is enormous, but are somewhat tight lipped about their numbers, it is number 2.
Steam titles make it real easy to find live data. PUBG has 2,000,000 playing right now its in 3rd. Overwatch and Hearthstone Blizzard has become tight lipped with these numbers as well but its massive they’re 4th and 5th. DOTA 2 is the 2nd highest player count right now on Steam and it is 6th. CSGO, even at horrible hours (Its not popular in Asia like the other titles listed), is still at 11th place and will be much higher up the list during better NA/European time slots.
It is a stone cold fact, the more people that play your game, watch your game, and that is iRacing’s major problem right now. Project Cars 2 sold 113,000 copies its first week and F1 2017 pushed about 170,000 in its first week, although those numbers will grow over time (PC 1 sold about 2 million for context). Assetto Corsa has pushed 1.4 millions copies since it dropped in 2015, and the most successful simracing release has been Gran Turismo 6 at 5,000,000 units sold.
iRacing, now pushing 10 years old, throws out the number of users on ads these days of 70,000. That is a huge problem from a marketing perspective for an esports title, that it has been unable to hit the 5% mark of units sold in 10 years that other titles achieve in 2 or 3.
It does not take much critical thinking from here to reach a logical conclusion about why the user base has not grown as quickly as its competitors, but yet people still like to throw out arguments that are not well thought out in my opinion.
Whenever you bring up the money issue and the lack of users issue about iRacing one of the first retorts is “Well of course it will not be popular, because getting the hardware is so expensive”. This argument is so poorly thought out its hilarious. Yes, wheel and pedals are an investment and they aren’t the cheapest thing in the world. But if their cost was so prohibitive, and if it is so much of an issue, how can companies like Logitech, Thrustmaster, and notably, as simracing stuff is all they make, Fanatec stay in business?
If sim racing peripherals are so hilariously unpopular why are companies such as Heusinkveld Engineering able to give away their top of the line, top dollar equipment to drivers and streamers for advertising purposes? The short answer is, if these companies can stay profitable selling those components then it is not holding back the sim at all and there is more demand then people want to give credit.
I spoke with Mark Hargett from HPP Simulation about this topic a bit, and while he would not give me any hard numbers he offered up this comment:
“(…)that after almost 4 years now I am back ordered more than ever and the new orders every month are record breaking for the last 3 months straight” – Mark Hargett, HPP Simulation
His experience is mirrored by other hardware producers as well. In a recent thread in the hardware forums representatives from companies like The Button box Shop, Heusinkveld Engineering, Sam Maxwell Customs, Sim Racing Machines, and Simucube are all as busy as ever. Some companies are even shutting down other product development because the demand for hardware is so high. Before HPP got into sim racing accessories Mark was producing parts for Porsches. That has since been put on hold and he is fully concentrating on Sim Racing hardware due to the demand.
In addition, regular gamers tend to spend a LOT of money on their own components as well. The price of a PC is irrelevant in holding back the sim as the most popular esports with millions of players are based on PC already, but gamers will drop hundreds of dollars on mice, keyboards, and headsets. The cost equivalent of a good entry level Logitech or Thrustmaster wheel is spent by many people in the traditional Esports market.
So while I can agree that the potential cost of entry is higher, I don’t see it being so much of an issue on the hardware side of things (Excluding the price of building a PC if necessary) that it should keep from growing at the expected rate.
So all that leaves us is, what is holding the sim back from making a pricing change? Especially when you look at some of those number for titles sold (Granted, many of those sales are on consoles, but even still their numbers for PC only still beat iRacing’s). Obviously being a business iRacing has to make money and iRacing has said nothing to the extent of how much they make off of each active member. We do know that the sim was more or less bank rolled by an initial investment from John Henry, owner of the Boston Red Sox and co-owner of Roush Fenway Racing.
The answer is it depends on how much they get out of people as it is, and at what point becomes worth it. I would venture most people are not anywhere near that $1500 marker. If you held a gun to my head, I think roughly $200 in content is probably about the max a good amount of users spend. But that said, some of the most popular content on the sim is the free series such as rookie MX5s and street stocks, so it is really hard to judge without knowing the numbers from the sim themselves.
The best possible situation would take advantage of a newly coming feature in my opinion. With AI coming out you could put together a 1 time cost model together for people to have access to iRacing in a single player format and get ALL of the content, and then have a subscription for the Multiplayer. I just don’t see how getting the overall cost down could be a bad call, especially seeing the numbers other sims have put together in membership.
What you actually decide to make those numbers though I am unsure. I think $60 for the game as a whole would be more then worth it, potentially even $100. And even maintaining the current sub costs would be fine as well. No one, even people who have talked down the sim, has ever disputed the iRacing race scheduler is a good system or that it isn’t worth the price of the Subscription. It is always the price of the cars and tracks that is always the hangup for people.
From an esports perspective the other sims, given their lackluster physics, lack of real series support/sanction, and lack of features for stream production have survived on their player counts. iRacing has all the features a sim racing esport could hope to have. It has support from real series, the best variety of any sim on the market, constant and consistent updates, it looks good on screen, it gives good options/variety to streamers and broadcasters alike, and important it is FUN. It just needs the player base and viewer base to push it to the next level, and the current cost is easily the biggest issue keeping that from happening.
A pricing format rethink makes the sim go from a niche for whales, and turns it into the best bang for your buck simulator and renders all the competition well behind the 8 ball. And while a pricing restructure will not bring in millions of people into sim racing in an instant, it will become much more sustainable and a more realistic gathering place form sim racers around the world. Seems like a win win in my book.