memonic

Should You Eat While You Negotiate? - Lakshmi Balachandra - Harvard Business Review

Save

Should You Eat While You Negotiate?

Across cultures, dining together is a common part of the process of reaching negotiated agreements. In Russia and Japan, important business dealings are conducted almost exclusively while dining and drinking and in the U.S., many negotiations begin with "Let's do lunch." But are business deals actually improved when people discuss important matters over a meal?

To explore this question, I conducted two experiments. The first compared negotiations that took place over a meal in restaurants to negotiations in conference rooms, without any food to eat. In the second, negotiations were conducted with or without a meal in a business conference room. In the experiments, 132 MBA students negotiated a complex joint venture agreement between two companies. In the simulation, a provisional deal is in place, but a variety of terms must still be considered and agreed upon to maximize profits for their companies. The negotiators must determine how to handle each term of the deal. As is typical in many negotiations, in order to maximize their profits, the negotiators must share information and work together with the other side to learn where the most value can be created.

The greatest possible profits were created by the parties who were able to discern the other side's preferences and then work collectively to discover the profit maximizing outcomes for the joint venture, rather than merely considering their own company's profits. In the simulation, this can only be accomplished when the negotiators make trade-offs and then compensate each other from the net gains to the joint venture. The maximum value that can be created jointly for both companies is $75 million. Deals can be struck at lower combined values, down to as low as $38 million. To explore how eating together affected negotiation outcomes, I considered the total value created by both companies.

The students who ate together while negotiating — either at a restaurant or over food brought into a business conference room — created significantly increased profits compared to those who negotiated without dining. (Individuals who negotiated in restaurants created 12% greater profits and those who negotiated over food in a conference room created 11% greater profits.) This suggests that eating while deciding important matters offers profitable, measurable benefits through mutually productive discussions.

foodchart2.gif

I designed a third experiment to test if it was in fact the act of eating together and not merely sharing a separate task that led to the better negotiated outcomes. I had 45 MBA students negotiate the same simulation, but instead of negotiating while eating, half of the groups negotiated while completing a jigsaw puzzle that had nothing to do with the negotiation. In this experiment, I found that the negotiators who shared a common task did not create better negotiation outcomes than those who only negotiated the deal.

I expected that both sharing a meal and collaborating on an activity would increase trust between the participants — and perhaps that the cultural history attached to eating together would increase trust more than sharing other activities — but when I surveyed participants in both studies, the trust levels they reported did not increase.

Why else might eating together improve the outcome of negotiations? There may be biological factors at work. When the negotiators in my first two studies ate, they immediately increased their glucose levels. Research has shown that the consumption of glucose enhances complex brain activities, bolstering self-control and regulating prejudice and aggressive behaviors. Other research
has shown that unconscious mimicking behaviors of others leads to increased pro-social behaviors; when individuals eat together they enact the same movements. This unconscious mimicking of each other may induce positive feelings towards both the other party and the matter under discussion.

In future experiments, I will continue to explore the reasons why eating while deciding important matters increases the productivity of discussions. In the meantime, you would be wise to suggest "doing lunch" whenever you meet to negotiate.

More blog posts by Lakshmi Balachandra
More on: Negotiating

Five New Management Metrics You Need To Know - Forbes

Save
Bruce Upbin

Bruce Upbin, Forbes Staff

I manage our tech and wealth teams.

|
12/13/2011 @ 10:58AM |224,537 views

Five New Management Metrics You Need To Know

James Slavet, Greylock Partners

This is a guest post from James Slavet of venture firm Greylock Partners. Slavet’s investments include Coupons.com, Groupon, One Kings Lane and Redfin. Greylock Partners has invested in Facebook, LinkedIn and Pandora.

After years of leading teams and then, at Greylock, watching some of the best startup CEOs in the world, I’ve learned that the most important metrics are often ones you never read about on the income statement or in the financial press.

“If you can measure it, you can manage it” is a business saying that goes way back. Maybe it was Henry Ford who said that, or Peter Drucker? Regardless, most managers only measure outputs, not inputs, which is like telling a Little League team to score more runs, rather than actually explaining how to swing a bat and make contact with the ball. Similarly, most companies measure traffic, revenue or earnings, without considering how to improve the company at an atomic level: how to make a meeting better, or an engineer more productive.

Here are five metrics that great teams should measure:

Metric 1: Flow State Percentage

Jobs that require a lot of brainpower—software programming for instance—also demand deep concentration. You know that feeling when you’re “in the zone,” cranking on something. That is flow, a term coined by psychologist Mihaly Csikszentmihalyi. Unfortunately, most of us are constantly interrupted during the day with meetings, emails, texts, or colleagues who want to talk about stuff. These interruptions that move us out of “flow state” increase R&D cycle times and costs dramatically. Studies have shown that each time flow state is disrupted it takes fifteen minutes to get back into flow, if you can get back at all. And programmers who work in the top quartile of proper (ie uninterrupted) work environments are several times more productive than those who don’t.

Ideally programmers and other knowledge workers can spend 30% – 50% of their day in uninterrupted concentration. Most office environments don’t even come close. To get started, ask your engineers to track for a few days their personal flow state percentages: how many hours each day are they in flow, divided by the number of total hours they’re at the office. And then brainstorm ways that the team can move this number up. For example, perhaps there’s a little paper sign at each person’s desk that says “Go Away, I’m Cranking.” Or maybe you have a day where no meetings are allowed. Tom Demarco has written insightfully on the topic of flow.

Metric 2: The Anxiety-Boredom Continuum

Years ago, back when I was younger and cooler, I took a salsa class with my wife-to-be where the instructor said something that really stuck with me. He said that his goal was to keep all of his students in the pocket between boredom and anxiety – but closer to anxiety. In other words, we shouldn’t be so overwhelmed that we break down and give up, but we also shouldn’t be coasting either. He kept the rhythm fast enough so that we were challenged, but not so difficult that we lost the steps completely. And he kept tuning the difficulty level of the class to stretch but not break us.

This same anxiety-to-boredom continuum also applies to managing people. Star performers can get bored easily, and often function best when they’re expected to rise to great challenges. You want expectations to be high, but not completely overwhelming. With this in mind, check in with your employees periodically about where they are on this continuum, while also keeping an eye out for signs of where they stand. If they have low energy, or are showing up late and leaving early, they may be bored. If they’re responding to small setbacks with anger or frustration, or getting sick a lot, they may be pushing too hard.

Metric 3: Meeting Promoter Score

Most meetings suck. And they’re expensive: a one-hour meeting of six software engineers costs $1,000 at least. People who don’t have the authority to buy paperclips are allowed to call meetings every day that cost far more than that. Nobody tracks whether meetings are useful, or how they could get better. And all you have to do is ask.

I'm a managing editor at Forbes. I started as a reporter here in 1995 and worked as Midwest bureau chief and tech/health editor. Current opportunity is extending and improving our technology coverage and big franchise lists on Web, print and mobile. I'm blessed with an amazingly talented team of journalists, developers and statisticians. I do not kite-surf or glacier. Follow me on Twitter

loading

Why TechCrunch is boring, SAP is not, and the world has gone mad

Save

Why TechCrunch is boring, SAP is not, and the world has gone mad

It’s cold by the way. Winter finally arrived, I realised as I pondered SAP’s acquisition of SuccessFactors on the run into work. I can still feel the cold imbued from the run into the metal palmrest of my laptop as I write this.

The highlight of the weekend was Alexis Tsotsis’ faux-gonzoistic impression on TechCrunch. I say faux, because it has the attitude of gonzo journalism but not the style. From what I get of her article, if it’s not Apple or a startup, she’s not interested – and therefore the SAP acquisition of SuccessFactors is not worth reading about:

…you can never be too sure with these incredibly dull companies. I am too bored to Google it. In fact, I am literally bored to tears writing this, like I am seriously crying here in my local coffee shop and everyone is looking at me weird…

Really, this says a lot more about what’s wrong about TechCrunch, and actually the world as a whole. And so last night, I was discussing this point with a bunch of Enterprise Irregulars on Twitter. I’m going to disagree with Dennis Howlett (who used to be an Irregular), which is always a good way to start the morning.

@dahowlett: @applebyj giving idiots ANY play is plain dumb

Sameer Patel chimes in with a reminder that the Facebook acquisition of Gowalla – a FourSquare-style location based service, got much more airtime.

@sameerpatel: @applebyj @dahowlett not shocking. Most of yesterday tech meme led w/ reruns of Gowalla FB acquisition for an undisclosed sum vs a $3B buy.

And Frank Scavo got the feel of the enterprise community spot on:

@fscavo: I stopped reading TechCrunch years ago. @alexias’s recent post reminds me why. cc: @dahowlett @applebyj

But actually I think that Timo Elliott nailed it. Yes Timo, this is the real world.

@timoelliott: Strangely, this techcrunch post about the “boring” SAP acquisition made me very proud: techcrunch.com/2011/12/03/zzz… #dudethisistherealworld

And let’s just be reminded about how real this world is:

Facebook SAP
Revenue $4bn (estimated) $12.46bn
Profit $1bn (estimated) $1.18bn
% of world’s transactions Ermm? 65%
Users 800m 500m
Market Capitalization $82bn $72bn

If you compare Facebook even by their own metrics, they are still insignificant compared to the behemoth that is SAP. Billions of people interact with SAP on a day to day basis – every transaction with giants like Barclays Bank. 90% of the world’s beer is produced by SAP. And since SAP’s Chief Marketing Officer Jonathan Becher took the time to point it out, I’ll quote him:

@jbecher: @applebyj Amused by bit.ly/tFOK7J Don’t forget 65% of world’s televisions, 86% of athletic footwear, or 70% of world’s chocolate

Who says that SAP isn’t cool, with such accolades! And yet Facebook has the greater market capitalization. Why is this? High growth and cool factor. But Facebook has not proven that it has a sustainable market model.

Why does this mean there is something wrong with TechCrunch?

Well it strikes me that TechCrunch gets Consumer IT and is all over the topics that generate a lot of traffic, like Apple, Facebook and Google, and there’s nothing wrong with this. I do however think there’s two major areas where TC has a problem:

First, Founder and former co-editor Michael Arrington sold out to AOL then whined about their involvement. What amazes me here is first, his naivety, and second his desire for self-importance.

Second, it’s fine if you don’t understand Enterprise IT. But don’t whine about it being boring – because if you read Alexia’s article you will see that there are (currently) 99 comments, all of which criticise her and her journalism. Don’t write a crap piece of journalism and then follow it up with “I was just being honest” on Twitter – and then delete the Twitter post.

06/12/11 Correction – Alexia’s “I was just being honest” was in the comments area, not a Tweet. She didn’t delete it. My bad.

And what’s wrong with the world?

Well for my money SAP is possibly the most interesting technology firm in the world right now. I make my money out of the SAP industry so perhaps I would say that, but it’s also born out by facts.

They have the leading enterprise mobility platform, integrated back into an incredibly complex suite of software that covers 65% of the world’s business transactions. They are leading the world with in-memory technology.

And to add to that they have just made a major cloud acquisition, which might be the third dimension to prevent the risk of their becoming irrelevant in 5-10 years time.

What’s wrong with the world is that they are so focussed on Apple, Google and Facebook – with their over inflated IPOs and everything that comes with that. The world was not built on technology bubbles – it was built on hard work and honest money.

For a small number of lucky individuals there is a bubble with an IPO and a retirement salary. For everyone else, the world is a very tough place to live. My advice: stop being bored by the stuff which makes the world turn.

Britain’s embattled newspapers are leading the world in innovation

Save
The crucible of print

Britain’s embattled newspapers are leading the world in innovation

Bold newspapers

BY MOST conventional measures, Britain’s newspapers look doomed. Young readers are abandoning them for the internet and television. The Daily Express and the Daily Mirror, both tabloids, have shed about two-thirds of their circulation since the mid-1980s. Yet Evgeny Lebedev, co-owner of the Independent and the Evening Standard, is optimistic. “People are hailing the death of newspapers,” he says. “But if you go into the Tube, you’ll see almost everybody is reading one.”

Britain’s newspaper market is the world’s most savage. It is unusually competitive: there are nine national daily papers with a circulation of more than 200,000. And advertising has migrated online more quickly than elsewhere. Since 2009 more advertising money has been spent on the internet than on newspapers, according to ZenithOptimedia, a marketer. British papers receive no government funding (as is the case in France, for example). Indeed, they face a fearsome state-sanctioned competitor in the BBC.

Fierce competition has created a scrappy, sometimes immoral trade. This week the News of the World, a tabloid that has been caught up in a celebrity phone-hacking scandal, revealed it had suspended an editor. But Britain’s papers are also exceptionally innovative, busily testing new format sizes and prices. Paul Zwillenberg of Boston Consulting Group says they are now experimenting in dramatically different directions. There are three main trends.

The first is being driven from Wapping, London home of News Corporation. Its four British titles—the Times, the Sunday Times, the Sun and the News of the World—are moving behind an exceptionally tough online paywall. Unlike the Wall Street Journal, also owned by News Corporation, the Times does not allow people to read any articles free on the web. Its prices are steep: £2 ($3.10) per week after the first month.

Not worth the paper they aren’t reading

As online commentators and rivals have gleefully pointed out, News Corporation’s paywalls have led to a drastic drop in traffic. A survey by Mark Oliver, a consultant, finds that only 14% of regular Times readers and just 1% of non-regular ones subscribe to the website in some form: upon hitting the paywall, most head for the BBC’s free website instead. That does not worry News Corporation. It sees online advertising as an unreliable source of revenue. Online ad spending is growing, but the number of ad slots available is rising much faster; as a result, prices are so low that a reader who visits a website once or twice a month is hardly worth having. The firm would rather extract more money from dedicated readers directly.

Thus the pages of the Times and Sunday Times are thick with in-house ads offering entertainments to readers, from iPad applications to theatre tickets and Italian holidays. Some 250,000 people buy from the Times wine club. These things tend to make money, but the main goal is to hook readers on a bundle of services. Katie Vanneck-Smith, chief marketing officer for News Corporation’s British papers, wants to get to the point where a newspaper subscription is like its pay-television or mobile-phone equivalents: something it hurts to cancel. Rivals fear the firm will bundle newspapers with BSkyB, a hugely successful satellite broadcaster that it controls and wants to take over completely.

Britain’s second great innovator takes the opposite view. The Daily Mail contends that online advertising works fine—if you are huge. The paper has been one of the most consistent sellers in print over the past few years, crushing its nearest competitor, the Daily Express. But it is even mightier online. With 35m unique visitors each month, it is now the world’s second-biggest newspaper website, according to comScore, which measures online traffic. It may take the top spot when the New York Times goes behind a paywall this year.

In contrast to the paper, which is conservative and often alarmist, the Daily Mail’s website is a breezy read. It is big on celebrity news, particularly reports involving attractive women in swimsuits. Lots of online news aggregators link to it. Executives claim that the website is now so successful that it competes not with other newspaper websites but with portals such as Yahoo! and MSN.com. The Mail is now steering readers to its iPhone application.

Perhaps the most counter-intuitive strategy is being pursued by Mr Lebedev and his father, Alexander, a Russian tycoon. In the past two years they have acquired the Independent and the Evening Standard, a London paper that they have made a freebie. In October they launched i, a cut-down Independent, priced at 20p—one-fifth the price of most quality daily newspapers. It is the first new national paper since 1986.

Not one of the Lebedevs’ British papers has a compelling website. They think young people do want to read newspapers—they just don’t want to pay much, or anything, for them. The Evening Standard’s circulation has more than doubled since going free, to 700,000. Distribution costs have plunged. Papers are now handed out in central London and moved around the capital by Tube: because they are free, commuters often leave them on trains.

The Independent and i face a harder road. Because i is so cheap, newsagents make little money from sales. They often shelve it with bottom-feeding tabloids and the Racing Post. Yet i is an intriguing effort to prop up the Independent, which was nearing the point at which marketers were losing interest: now advertising often runs in both papers, which together offer a higher circulation. It costs little to assemble and may help keep alive the newspaper habit, by offering a halfway house between free and premium papers.

The strategies being pursued by News Corporation, the Daily Mail and General Trust and Lebedev Holdings rest on distinct assumptions about what readers want, what they will pay for, and the future of advertising. It is highly unlikely that all three experiments will work. It may well be that none of them does. But none can be faulted for lack of boldness.

The innovators also exude more confidence than others. The Guardian, which first championed a big, free online presence, has been overhauled by the Mail’s website. It lacks News Corporation’s expertise in bundling and is far more expensively staffed than the Lebedevs’ outfits. It is a measure of how quickly things are moving that the newspaper closest to the cutting edge a few years ago now seems most in need of a new strategy.

Selling cars

Save

Selling cars

Ford can fiesta again

Innovative marketing helped Ford’s recovery

Farley makes an offline pitch

“WE LIVED on farms, we lived in cities, and now we’re going to live on the internet!” proclaims the actor playing Sean Parker, one of the Facebook pioneers in the film “The Social Network”. Earlier than most of his rivals, Jim Farley also understood how important the internet was becoming to car buyers. Now, as global marketing chief for Ford, he is hoping to push America’s second-biggest carmaker to the leading edge of online advertising.

This year in America he launched the Fiesta, a European-styled subcompact, using internet campaigns, and introduced the new Explorer SUV on Facebook. Early next year he plans to launch a new Focus compact car globally via the internet. Mr Farley uses traditional media as well as online advertising, but combines both with unconventional marketing.

Ads for mass-market cars are normally dull affairs, but Ford was recently named “Marketer of the Year” by Advertising Age, a trade magazine. And Mr Farley’s methods seem to be helping Ford accelerate into the fast lane. On October 26th the company reported a $1.7 billion profit for the third quarter. This was helped by improved quality and the halo effect from not having to seek a government bail-out and declare bankruptcy, unlike its Detroit rivals. Ford is now hiring workers and paying down its debt. “We are moving from fixing the fundamentals of our business and weathering the downturn to growing the business,” declared Alan Mulally, Ford’s boss.

Mr Mulally poached Mr Farley in 2007 from Toyota, where he had worked for 17 years, often using guerrilla-marketing techniques. Mr Mulally, who had joined Ford the year before, wanted to remake the firm with his “One Ford” global design and development strategy. The idea is that by knitting together far-flung operations with only small adjustments for local tastes, the same cars could be sold in America, Asia and Europe. Mr Farley’s brief was to unify Ford’s marketing and advertising.

Mr Farley found customers were indifferent to the brand—which, he says, “is worse than customers not liking Ford.” Part of the reason was the firm’s image, at least in America, as a Midwestern, staid producer of pickup trucks. As much as Americans seem reluctant to give up their petrol-guzzling SUVs, he concentrated on promoting small, fuel-efficient cars, with a similar message around the world to advertise them.

The launch of the Fiesta in America was a test of the Farley strategy. The car was already made in Europe and Asia. Ford imported European Fiestas and recruited 100 media-savvy members of the public to act as “agents”. In return for a free car for six months, plus insurance and petrol, they agreed to upload their adventures in online videos and to blog about them. The so-called “Fiesta Movement” created a buzz and the car gained the highest vehicle awareness among the public of any car in its segment, says George Rogers, who runs Team Detroit, Ford’s advertising agency.

Mr Farley decided to take a leaf out of the Fiesta book for the global launch of the Focus, which is planned as the centrepiece of Ford’s transformation into a producer of smaller and more environmentally friendly cars. Again, people will be recruited but this time from applicants around the world. They will then be taken to southern Europe next spring to test the new car and to tell their friends about it on Facebook and Twitter in German, Russian, French and any other language. “Word of mouth is more believable than traditional advertising,” says Mr Farley.

The new Focus will be built on one platform and will have the same engine, transmission, chassis and main body in all the markets where it is sold. The current version of the car, which was launched in 2000, was promoted with over 20 different advertising campaigns created by semi-autonomous marketing units. Ford intends to have a global theme this time, but does not rule out tailoring some advertising to local markets where it is felt appropriate. Detroit has long talked about making global cars, but ended up with many differences. The coming together of the world online could give Ford that advantage, provided the Farley strategy continues to run well.

Swiss banking

Save

Swiss banking

Alpine redoubt

Switzerland tidies up its image

ONLY a few days after Swiss engineers finished a railway tunnel that will allow freight from neighbouring countries to zoom beneath the Alps without disturbing the peace, Switzerland unveiled a financial equivalent to calm the clamour that surrounds the flow of outside money into its banks. On October 25th the Swiss government agreed to start formal negotiations with Britain on a new tax and banking agreement. Two days later it announced a similar arrangement with Germany.

In both cases the Swiss are pressing for a deal to collect taxes on behalf of foreign governments without releasing the names of those who have stashed some $2 trillion-worth of financial assets in Switzerland. “There are reasons why someone wants to hide his belongings from his home country…but there is no reason not to pay taxes,” says Konrad Hummler, who heads the Swiss Private Bankers Association. These deals would ensure tax compliance without forcing banks “to commit any treachery with their clients”.

In order to keep their money in Switzerland outsiders may also have to cough up penalties to reflect 5-10 years of unpaid backtax. For some, this will be a price worth paying. Despite vigorous investigations by tax authorities in America and Germany, Swiss private banks have still been pulling in cash throughout the crisis (see chart). Much of it has come from people in developing countries who want a stable hidey-hole for their money rather than to escape the taxman.

In any case Switzerland’s private banks have for some time been moving away from the business of helping people outside the country avoid their dues. Analysts at Citigroup reckon that “offshore” assets now account for only 15% or so of the money that is looked after by UBS and Credit Suisse, Switzerland’s two biggest banks.

As well as polishing its image on taxes, Switzerland is also trying to rebuild its reputation as a financial fortress by beefing up the capital bulwarks of its biggest banks. With new equity buffers of up to 10-13% of risk-weighted assets buttressed by another 6-9% of convertible capital, Swiss regulators are going far beyond the Basel 3 capital accord. The hope is that this will make Swiss banking far more boring than it was in the past (UBS, the bank worst hit by the crisis, this week announced that net outflows of client money had at last turned into a small inflow in the third quarter). That will work so long as bank bosses do not offset higher capital costs by making larger bets in investment banking.

Free Middle Earth: LOTRO loses subscription, gains players

Save

Free Middle Earth: LOTRO loses subscription, gains players

Last year, Turbine did an experiment, taking the previously subscription-based Dungeons and Dragons Online and adding a free-to-play option. The result was an almost immediate success. More players joined the game, revenues increased, and subscription numbers even rose. So this past September Turbine did the same thing with Lord of the Rings Online, adding a free option to an already successful subscription game.

Ars spoke with several members of the LOTRO team to see just how things are going two months after the change.

"It’s still fairly early, but we’ve had a really successful start," Adam Mersky, Turbine's director of communications, told Ars. "We’ve had over a million new registered users come into the game and our monthly revenue has doubled. We’re only six weeks in, but basically we’re making twice as much a month now than before when we could only make it off subscription revenue."

The game is set up in a similar way to DDO. Players can still subscribe, but there's now also a free-to-play option, coupled with a brand-new LOTRO store. Here, players can buy everything from additional quests and expansions to new clothes and even skill buffs, or tomes, as they're called in the game. And players, both free and subscribers, have flocked to the store. “We’re having over half our (player) base use the store, that’s almost four times the industry average," said Mersky.

The most popular premium content purchased by subscribers is additional storage space, but amongst both groups of players the horses have been extremely popular. And this has actually changed the way the game is played in some ways. Prior to the new payment model, the only way to get access to a horse and the skills necessary to ride it was to play the game for a hundred hours or so, complete a 30-minute riding quest, and then pay a whole bunch of gold. But with the introduction of the store, players can now simply purchase a horse and riding skills, saving them quite a bit of time. Changes like this take content that previously most players wouldn't even see, and make it easily accessible to everybody.

Keeping everybody happy

One of the biggest challenges for Turbine has been making the free portion of the game substantial enough to keep the free players happy, without giving too much of the game away for nothing.

"Unfortunately it's not a charity and we can't give it away all for free, so we focused on making sure that the free experience was really strong and felt good," producer Kate Paiz told Ars. "But where we could—options, inventory, things like that—we trimmed off a little bit on the edge to save us some on the back end and then allowed players who really wanted to participate in that content to have it available for a reasonable price,"

To that end, several aspects of the game have been changed since September based on player feedback. For instance, whereas free players originally only had access to one character slot, they now have two. And while free players at first lacked access to the expansion pack content, they can now experience the quests that pertain to the main storyline, while optional side-quests remain as premium content. According to Mersky, these changes were possible because Turbine was "conservative" with its initial pricing structure.

"It's obviously easier to put more gates up and take them away than the alternative, whereas if you put free stuff in and then decide to charge for it that's clearly not the way to go," he told Ars. "It gives us a lot of flexibility to adjust based on player feedback."

<:OBJECT width="640" height="450"></:OBJECT>
Lord of the Rings Online

Adjustment phase

And that's the team's current focus: taking in player feedback and making adjustments to the game as necessary. A sizable update is in the works and should be released near the end of the month. It will add a small amount of content, but will mostly deal with handling player concerns that have cropped up since the September re-launch. The new payment structure gives Turbine a much deeper understanding of how players interact with the game, which creates plenty of opportunities to fine-tune the experience.

"Now we have a whole other level of understanding, because we can understand how they purchase things and what they respond to with regard to sales or content," Mersky told Ars. "It just gives us a lot more data to understand the player more and obviously we're getting a lot of new data since it just started. But we'll also continue to roll out new content next year and the next big landmark place we're going to be going to in Middle Earth is Isengard."

Currently, the free-to-play option is only available to North American players, but Turbine plans to change that soon. The new payment structure should be expanding to Europe in the coming weeks and China early next year. And that likely means even more players entering LOTRO's version of Middle Earth.

"When you remove the subscription barrier a lot more players come in," Paiz summarized.