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South Korea's Free Computer Game Business Model Hits the US

Posted by Soulskill on from the nickel-and-dime dept.

Anti-Globalism writes with this excerpt from AFP via Yahoo! News: "Seoul-based 'free-to-play' computer game titan Nexon on Wednesday blasted into the US videogame arena with a 'Combat Arms' online first-person shooter title that makes its cash from optional 'micro-transactions' by players. The game makes its money from players that buy animated helmets, outfits, emblems or other virtual items to customize in-game characters. To keep the battlefield even, players earn experience or advanced weaponry by skill so people essentially can't pay for power. ... Startups and established game makers including Japanese goliath Sony are venturing into the free computer game market, according to DFC Intelligence analyst David Cole. 'It looks like it could be very big,' Cole told AFP. 'It's one of the things everybody seems to be looking at. The challenge is it is a very new model and it remains to be seen whether customers used to a free model will be tight when it comes to actually spending money on it.'"

29 of 159 comments (clear)

  1. Hrmm by acehole · · Score: 5, Funny

    So essentially, people will be paying for pieces of flair on their characters?

    How many pieces of flair should you wear to express yourself?

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    1. Re:Hrmm by Anonymous Coward · · Score: 3, Funny

      Stan wears 37.

    2. Re:Hrmm by maglor_83 · · Score: 2, Insightful

      Especially in an FPS. Wouldn't an animated helmet scream 'Shoot here!'

    3. Re:Hrmm by redscare2k4 · · Score: 2

      Which is what those games do. I played eXteel for some time.

      See, you've got a set of "entry level" items, which you get via experience. Then you've got a set of "medium-level" items you buy with cash. And then you've got the "top of the line" items you get with experience too.

      This way, lazy/casual gamers can skip the crappy starting items by spending $10, but they still don't become über powerful cos experienced players still win with a combination of playing experience and high level items.

      Ultimately I quit playing cos I found it boring that matches are only 8 vs 8, all maps are almost symmetrical and there are no vehicles. Guess I'm too used to BF2 and it's 32vs32 players with commander, squad system, tanks, planes and copters :P

    4. Re:Hrmm by JohnSearle · · Score: 4, Insightful

      So you're arguing that we should bring the class distinction into the gaming world as well? The rich get the most powerful items / weapons because they can be afforded, and the poor are left with either purchasing beyond their means, or being hindered? and, yes I do understand this is probably minimal amounts of money, but the more resources controlled in this manner, the more the cumulative costs will be.

      This would also means that the gaming companies will most likely incrementally increase the power of items to keep people purchasing new thing (and to perhaps keep people interested in this type of system). Most MMORPG's do this with their incremental additions of more powerful equipment, levels and stats with game expansions. The only difference is that they encourage equal opportunity, in that they ban external trading.

      I don't know about you... but I prefer to play in a system that encourages equal opportunity.

      - John

    5. Re:Hrmm by DarthJohn · · Score: 2, Insightful

      Maybe they make you pay for the nondescript helmet?

  2. A new age of micro-transactions? by compumike · · Score: 3, Interesting

    We've heard about micropayments for years, mostly for web content. But clearly this kind of market for virtual goods emerged in WoW -- without the explicit support of the company. It looks like the vendors are catching up! Still, there are lots of games that aren't based on continuous user profiles, and where the imbalance created might be significant and disruptive.

    The other concern I have is about how to manage this between kids and parents. It's one thing to have a fixed up-front payment to buy a game, but to have kids (teens) linking credit cards (or even pre-paying) to a game seems like it might not go over well with the parents...

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    1. Re:A new age of micro-transactions? by plasmacutter · · Score: 4, Insightful

      So far as teenagers linking credit cards to the games.

      We've had pre-paid charge cards for online transactions for a while, with the explicit purpose of allowing minors access online "credit" transactions without involving the related credit approvals required with "real" credit lines.

      This sounds like an excellent place to apply it.

      You get X dollars a month to spend on this game, when you run out you run out.

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    2. Re:A new age of micro-transactions? by lysergic.acid · · Score: 2, Insightful

      i think MapleStory and Second Life both came out before WoW, so WoW certainly wasn't the first game to create a market for virtual goods.

      and no one is saying that all games will become free and supported by micropayments, just that this model is gaining a lot of attention as there have been several successful releases.

      if you RTFA, the author talks about keeping the playing field even by not allowing players to pay for power. in Maple Story the micropayments were used for buying cosmetic items to customize your character's appearance. so you could purchase sun glasses, designer shoes, hats, etc. but they have no effect on gameplay.

      the whole point of this model, which the article discusses, is to exploit computers as gaming forums. the micropayment system is driven by the social aspect of multiplayer online games. players want to express themselves through the game, and this system allows players to do that through virtual apparel. people who don't want to pay for these superficial add-ons do not need to, and it won't change their gaming experience.

      and other posters have pointed out, pre-paid cards are an easy way for players, or parents, to control in-game spending. these are even mentioned in TFA:

      Kim says people prefer prepaid cards to tying credit cards to ongoing subscriptions to online role-playing games as is the case with popular "World of Warcraft."

    3. Re:A new age of micro-transactions? by compro01 · · Score: 2, Informative

      in Maple Story the micropayments were used for buying cosmetic items to customize your character's appearance. so you could purchase sun glasses, designer shoes, hats, etc. but they have no effect on gameplay.

      Which is complete nonsense now, as they do have numerous items that "affect gameplay" to a significant degree, such as experience rate boosters, drop rate boosters, an item for penalty-free resurrection (death usually results in the loss of 3-10% of that levels EXP, which can be huge (double-digit hours of training) at higher levels), pets that allow automatic looting and automatic healing (if your HP or mana drops below a set point, it will automatically use a potion if you have the item to do so), among others.

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    4. Re:A new age of micro-transactions? by KGIII · · Score: 2, Interesting

      http://kingdomofloathing.com/

      Way too much time invested. You can buy an IOTM or the likes but you can also work to earn them via earning meat.

      --
      "So long and thanks for all the fish."
  3. An interesting market experiment... by creature124 · · Score: 5, Interesting

    I have played several Korean MMO's (with engrish interfaces, of course) based off the business model (Maple Story, Flyff and the like), and from my experience, most people can't/won't spend money on them, but those that do tend to spend big, customizing every piece of equipment they possible can. The fact that these games are still running several years on is proof of profitability.

    It will be interesting to see how this pans out. It might be quite nice to play a free game with decent english ingame.

    1. Re:An interesting market experiment... by LandDolphin · · Score: 2, Insightful

      MAny MMO's could be profitable. However, it seesm that instead of making great games for a nitch market, companies are more interested in making the next "WoW".

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  4. Re:Nice article... by dolphino · · Score: 2, Interesting

    Probably because they have only "talked" about implementing micropayments in BF Heroes, just as the idea of micropayments is in the "what if" stages with titles like Spore.

  5. War of Conquest by owlman17 · · Score: 2, Informative

    War of Conquest has a similar model. Its free, but you can buy upgrades, items, tech, etc. They even give out points that you convert to either cash or buy more items, tech, etc.

  6. Not nearly the first by neostorm · · Score: 4, Informative

    Nice. This article forgets that there are tons of free-to-play MMO's already available in the US.
    Knight Online
    Fly For Fun
    Granado Espada

    And lets not forget our own domestic free-to-plays, such as Guild Wars, Minions of Mirth, Graal Online and the like.

    Here's a great resource for all of these- http://www.gameogre.com/

    1. Re:Not nearly the first by Lueseiseki · · Score: 2, Interesting

      You're missing the point of the article. The article was detailing how American developers are getting in to the 'free-to-play' system that is traditionally used by most Korean developers. The first three games you mentioned are all made by foreign devs. Guild Wars costs money to play, MoM has two clients (one paid and one free, balance issues much?), and Graal Online is not cool enough to have a wiki article. In the 'free-to-play' games being speculated about, the entire client and entire experience is FREE, but you can also opt to pay for small player cosmetic differences and et cetera. This is my personal favorite method of paying for games (in most cases), because you can have the full experience of the game, and decide to pay if you've enjoyed it as much as to want to customize your experience.

  7. Question: by WDot · · Score: 2, Insightful

    Why would I care what my character looks like in a first person shooter? Looking at the combat arms website, it suggests that the stuff that you buy is cosmetic, which makes sense in an MMO or even a third-person stylized action game like GunZ, but in a military style shooter? You won't be able to see your character in game, so the extra stuff is only a display of wealth. Plus (and this may be simple personal preference), customized military gear doesn't seem as exciting as shining armor or flashy action anti-hero clothes.

    That said I hope it works out for them, but I'll take my $50 games with everything included.

    1. Re:Question: by lysergic.acid · · Score: 2, Interesting

      you don't have to customize your character. that's the whole point. you can play it completely for free if you want to, and many people do. most people who play MapleStory do not spend any money on it, but it's still profitable enough to be a huge success.

      and the whole point of customizing how your character looks is for it to be seen by others, not you. do you buy expensive clothes just to look at yourself in the mirror all day? it's just like how people wear fancy clothes in real life to impress others. you want to express yourself aesthetically and distinguish yourself from others. they're just applying this social dynamic to online games.

      RTFA. this model has already proven to be very successful in several free Korean MMOs. that's why the big gaming publishers are showing interest in it. it's not hard to understand why character customizations is appealing to some people, and therefore a potential revenue stream. if enough people download a free game, at least a small percentage of them will want to accessorize their avatar and will be willing to pay for it--especially if your game attracts female players.

      the more co-ed and lively or interactive of a social environment you foster in the game, the more invested people will be in their avatars, and thus spend more on cosmetic add-ons and customizations. MMOs are naturally immersive because of their combined social and role-playing element. people willing to spend 20+ hours a week playing an MMO, then what's a few dollars on virtual apparel/accessories?

    2. Re:Question: by WDot · · Score: 2, Interesting

      (I did RTFA). That's what I said--it makes sense in an MMO, especially since a. You can see yourself and b. MMO's are more social in general. It's great to show off your gear in a city or to whichever shmuck happens to walk by. But this is an FPS, which as far as I can see from the site doesn't have MMO trappings like cities or general social areas. It seems to be very much a deathmatch FPS, which means that you're less likely to be standing around enjoying the eye candy and more likely to be running, finding cover, and shooting.

      Plus there's the vanity aspect of admiring yourself all clad in epic gear. ;) I'm not trying to get into an argument, I'm just asking if this will work as well in something that's less social and more action-oriented. I suppose if Combat Arms designs the game such that people see some of the same players over and over, it might work though.

  8. Kingdom of Loathing by ThreeGigs · · Score: 3, Interesting

    http://www.kingdomofloathing.com/

    Different type of game entirely, but same basic business model. And they've been doing things that way for 4 years now. Free to play, but $10 gets you a nifty trinket.

    Yes, the business model works in principle and in practice. And it's about time that more genres of games that use that model become available.

  9. This is old news .. by Saffaya · · Score: 4, Informative

    Every MMO to appear in Korea for several years now have been based on the Free-To-Play model.
    Even those who were launched on a subscription one migrated to it, forcing their western licencees to do the same.

    Example :
    _RF Online (CodeMasters dragged their feet but had to accept the free to play model)
    _Granado Espada aka Sword of the New World (K2 Networks wanted a hybrid system, but had to change to a pure free to play one)

    Even legacy power house Lineage 2 from NCsoft is heading towards a cash shop item addition to its subscription based model.

    More recent ones like Perfect World are free to play from the start.
    To sum up :
    Free-to-Play IS the de facto business model in asia, and has been for years. The western licencees also are bound to use free to play.

  10. F2P is a good model...in some ways. by jbsooter · · Score: 2, Informative

    The people with money will pay for the extras and the people without money will play because its free (not really free just being paid for by people willing to do so). All the free players stay because its free fun and the pay players stay because there is always something interesting going on when the server is full. Cash shops are usually addictive as hell too. I've had to set some pretty strict rules on myself about using them or else I'll go nuts and spend spend spend.

    The International (U.S) Ragnarok Online just opened a free server with a few gameplay tweaks to make it harder and the population is already consistently higher than the two smaller premium servers. The Korean RO opened a free server a while back and its population is substantially larger than all the pay servers combined and I expect it will be that way in IRO too. In fact a lot of people from premium servers are probably going to want to transfer their chars to the free server since the guild wars are probably going to be much better with such a huge server population.

    My biggest problem with free to play servers is the fact that the population is a lot younger and not as english speaking as pay to play games/servers. I like having a reasonable expectation that I can communicate with anyone I come across in the game. I also like not having to assume everyone is 12. I'm a young adult with some disposable income and I want to play my video games with people like me. A monthly fee does an ok job at insuring I get what I want.

  11. Netcraft confirms... by Cowclops · · Score: 2, Funny

    Only old people in Korea get cheap car insurance for playing free video games.

  12. WOW so many bad facts by Foo2rama · · Score: 4, Informative

    www.k2network.met Has been bringing in Free to play microtransaction games into the US for awhile like 3 years Warrock an FPS and Sword of the New WOrld... Hell even Nexon brought had one like 6 years ago in the US with Shattered Galaxies. As for Virtual markets... EQII runs it own, and even UO had a strong real money economy going.

    --


    ---In a time of Chimpanzees I was a Monkey.
  13. Pah Second Life has them beat by syousef · · Score: 2, Insightful

    On these things you pay money to customize your player - clothe them etc.

    On second life you pay money so you can take off your clothes and not be the only one lacking a virtual penis.

    Second life has you by the balls my friend!

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  14. Re:Wednesday? by KGIII · · Score: 2, Insightful

    Dual boot?

    If the OS running under what you're wanting to do is so antithetical to you then you *might* want to take a look at your values. If you don't have a copy of a legit Windows OS running around than my apologies and you are correct in saying so but, really, unless it is financial reasons it isn't that hard to boot to another OS to run what you want.

    The day I let an OS decide, or even a goal, what I use for software is the day I fail. What matters to me is getting what I want or need out of the system in the least risky way possible. *shrugs* It's not a Microsoft vs. World thing to me. It's just getting what I need done to be done in a reasonably decent amount of time with a reasonable amount of security.

    --
    "So long and thanks for all the fish."
  15. Neat concept but game needs work by daskro · · Score: 2, Insightful

    Combat Arms plays and feels like a fps in late beta.

    Most of the game mechanics are down, the guns and game physics are okay, and the net code is decent. There is a lot of potential in the customization of characters and weapons but even at this stage the kind of upgrades are neither give you significant advantage nor have a "wow" factor apart from "I have a red dot on my ak now." This is important because other games with similar business models, such as Pangya Golf, give the user the option to buy items and upgrades that significantly increase one's performance in game.

    How would one create these kind of upgrades for a game that is decisively skill dependent? Imba body armor upgrades? Super speed combat boots? auto-aim? All of these upgrades would be neat and all but what they won't do is make up for players who are terrible at FPSes but have Mom's Credit Card.

  16. Free-to-play aka F2P by akmurray · · Score: 2, Interesting
    I'm the lead developer on a browser-based MMORPG ( http://www.domainofheroes.com/ ) that uses the same "free-to-play, micro-transaction upgrades" model. We're still in open beta right now, so everything that we would charge for is free, but the upgrades we sell are convenience and customization options like increasing your inventory or customizing your chat appearance. I hate item sales personally, so we don't have that option, good or bad.

    The game mentioned in the summary is not the first game in the U.S. to embrace the micro-transaction free-to-play model (not by a long shot), but it is true that this model is becoming increasingly popular. We just got back from the Austin Game Developer's Conference and that was the hot topic on everyone's lips. "Are subscriptions dying? Is F2P the future?"