I have been here for quite some time now, early 2012, seen a LOT of changes here for good and bad. As a Business analyst, i would like to advice you on a few things Warmane team.
Lets analyze your hypothesis : Increased effort in gear acquisition = Increased engagement & profits (for this free server in specific).
You have 4 buckets of people here, lets look at them (just imagine 4 quadrants) :
a. People who are donors, and play a lot.
b. People who are donors, and play little.
c. People who are "potential donors" and play a lot.
d. People who are "potential donors" and play little.
Its obvious that you will want to retain group a, and try to push group b and c into group a by engaging them more to "play" or "pay" respectively. Category d is the one that you should invest least effort and time on.
Now, this means that you require to understand the type of customers in group b and c, and try to cater to their needs in specific, in order to engage them more. I cant tell you a solution (like most of the people here are doing) since i don't have the data, however i can tell you to ask a few questions before you make this leap of assuming you strategy will work.
Will increasing value of xmog items really improve customer engagement (forcing them to play OR pay more)?
Is customer satisfaction correlated with customer engagement? How does this vary across segment a, b, c?
Do ALL customers here really want blizzlike experience (both in content and time of play) ? Do they want only content? Do they want only time of play increased?
You can ask your data guys to probably build you a quick attrition model using logistic reg to see whether some of these factors (or all) are significant drivers of your hypothesized effect. A clustering algo will let you define the fine lines between category a,b,c and d customers so that you can understand them better (try K-Means or SVM)
My hypothesis is -
Category a players are here because they get more ROI out of Warmane than blizzard (Epic mounts, vanity items with minimal effort)
Category b players are here because they want faster alternatives to Blizzard (they have money for blizzard as well)
Category c players are here because they cant afford Blizzard and want to have the next best available game experience.
Targeting them separate would be wiser. You guys belong to an industry where customer experience is key to business, so if I were you I would take my customer experience data as seriously as historical data.
Lastly, my personal opinion about your change to the market place is that you are trying to implement a strategy which is not targeted to specific customer types, and thus may create problems in customer experience in general. There are a lot of people here who play here simply because it lets them "win" a lot more easily. For example, I recently donated for a 483 boots transmog (12 coin) since I got too fed up with its ****ty drop rates (or my bad luck!) and I am 522.
I hope you take this message seriously.
Thanks,
Serp
A concerned old timer.