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How Much Money Do Free-To-Play MMOs Make?
simoniker writes "Over at Gamasutra, a new feature article discusses how much money free-to-play MMO games make, with specific real-world stats from game developers willing to discuss how they make money with microtransaction-based PC games. In particular, Puzzle Pirates co-creator Daniel James reveals that 'the average revenue per user (ARPU) is between one and two dollars a month, but only about 10% of his player base has ever paid him anything. As a result, he says, approximately 5,000 gamers are generating the $230,000 in revenue he sees each month.' It's obviously quite a different model from the regular $15/month for World Of Warcraft, but it evidently works for some companies."
Stop making your games for Windows only and maybe you'll see more money.
Hint: on campuses there's at least 50% Mac users.
Wow, when did $46 become a micro payment?
most people are going to play it like it's free, as in, not paying for anything. You'll still have a minority that will help to boost the sales by paying a whole lot more than they should for in game items. Likewise, I have never played a free MMO that didn't have someone running around the home city just shouting out advertisements.
Xaotik Designs
Maybe it's because the $1-$2 range is across ALL users, not just those that pay. Of ALL the users, only about 5000 pay anything, and what they pay is about $230,000. The only thing "bad math" about it is that the 5000 users probably represent slightly less than 5% of the userbase, not the 10% he mentioned. But that's hardly a big enough deal to get worked up over. Perhaps you just misread the summary and instead of re-reading it, posted about how bad the math was.
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Those 5,000 are the ones paying. Total user base would be 115,000 - 230,000 users.
My guess is that the average paying user, will pay 1-2 dollars a month, but there are the very small % of users that drop a ton of cash to make up for it.
Maybe he is using the median average instead of the mean?
Spelling and grammar mistakes specifically left in to give the grammar and spelling nazis a meaning to their life.
Those are the 5,000 users who actually pay. The rest don't.
if the average user gives an average of 1-2 dollars per month, how can 5000 users generate 230,000 dollars?
I believe that the average per user is $1-2 per month.
However, the average per paying user was something along the lines of $50. So the math would go something like:
($50/paying user)(5000 users) = $250,000
or
($1.50/user)(160,000 users) = $240,000
($50/paying user)(5000 users) = $250,000
Clearly it should read:
($50/paying user)(5000 paying users) = $250,000
"(ARPU) is between one and two dollars a month, but only about 10% of his player base has ever paid him anything. As a result, he says, approximately 5,000 gamers are generating the $230,000 in revenue"
So 10% of the player base is paying him and that player base equals 5,000 people. So there are 50,000 people a month playing - nice.
But wait a sec...ARPU is only $2 on the top end and 5,000 people pay this, so that's $10,000 a month - where is the other $220,000 coming from!!!!! Even if all 50k people were spending $2 a month that's be $100k - Where did I miss something?
OH I GET IT NOW - From the actual article....
"Indeed, James reveals that Three Rings' MMO Puzzle Pirates takes in approximately $50 each month from each paying user (ARPPU) for a total of $230,000 a month, all resulting from microtransactions."
This is different than what the blurb mentioned - I guess it did get me to read, but only this time - you're tactics won't always work on me!
Ave Molech Setting
Hey Troll, please look at the comment right above yours.
I think the reason those numbers work for a free MMO is there is most likely a small userbase and doesn't take mass network resources. But WoW on the other hand has some high costs associated with a larger game. In the end its still not the same overall numbers but it might nearly be the same net profit gain percentages.
Anything can be found funny, from a certain point of view.
rtfa, ARPU = Average Revenue per user
ARPPU = Average revenue per paying user.
That 5000 is the percent that actually pays, the 1-2 dollar average is across all his users. There's still some bad math or heavy rounding in there since they say that 10% of the users pay, and so the average paid by paying users should not be 25-50 times the average paid by all users.
is it 6? I'm guessing 6, 6 right?
"approximately 5,000 gamers are generating the $230,000 in revenue he sees each month."
If you knew, why the hell did you ask me?
The Kruger Dunning explains most post on
Interesting that this was posted today without announcing that today was also the day that DDO (Dungeons and Dragons Online, Turbine Entertainment) announced it was going free to play. Just a thought.
Well, however your spell it, I love buying Squishies from that guy.
It's an error in the summary. The article states:
Indeed, James reveals that Three Rings' MMO Puzzle Pirates takes in approximately $50 each month from each paying user (ARPPU) for a total of $230,000 a month, all resulting from microtransactions.
I haven't read the article, but, to me it seems the takeaway here is pretty obvious: Your users are content and they are providing themselves. The question becomes "Are the users that never pay anything valuable enough to the users that may pay something to convince them to continue paying and participating at that paying level, or would those same paying users pay as much without the addition free users as human content?" And I think that's a tough question to ask which can only be answered through actual testing.
The resulting possibilities are 1) You get no money because now hardly any players join the game world and thus it is not as fun and thus people who are willing to pay, aren't willing to pay for very long. or 2) The game is equally as fun with a smaller user base, the paying base actually grows because their friends hear it's fun and put up cash before they even try it, and you end up with more revenue even though you have a much smaller total playerbase.
Big gambles because to me it seems like you have to try pay-to-play first before moving to free-to-play. And moving to a microtransaction model might alienate the small userbase you already accrued in the first situation. And switch it around? You'll lose all the free players who never would've paid and if they were required for paying players' enjoyment... yeah, I think I'll stay out of this market.
I read the script, and I think it would help my character's motivation if he was on fire. -Bender
I've not played a lot of the free/micro-payment MMOs but the ones I have fooled around with act the same way. That being if you want to have any real power in the game your forced to pay. And it's not that I'm saying that paying for an MMO service itself is bad. Rather that paying a flat rate subscription MMO is a better deal.
As such I either want to a) play for free when online; such as when playing a FPS, RTS, or even back in the day with a RPG like NWN. (A philosophy I supported by writing/hosting Stick a Fork in Me.) Or b) pay a subscription that covers everything, save for legitimate-not one every 3 months-xpacks, such that I don't get sucked into some micropayment black hole.
I think it's cool that the model exists and all the more power to those implementing it but I find it unlikely that it will be as good a model as subscription based MMOs. Too many ways that micro-payments can be 'shady' methinks.
Really, I know what I'm doing...Ohhhh, look at the shiny buttons!
If you read the article, it says the money is coming from people making micropayments adding up to $50/month each. Ummm, ouch, that's a shitload of money. For that you could buy a new, retail game each month. It is also way more than subscription MMOs. Pricing for those varies, but seems to cap out at $15/month for the big ones like WoW. Means for each month those people pay for this game, they could have a little over 3 months of WoW.
I think that is precisely why some publishers are so in to the micropayment idea. They figure if the individual transactions are smaller, you'll end up spending a lot more money. I don't like that idea. I'm certainly willing to pay for games, I buy retail games and I pay for an MMO, but there's a limit to how much I'll spend. For $50 a month I'd better get a hell of a lot of entertainment, otherwise I'll be looking elsewhere.
I am curious about the investment Disney and others are prepared to make in games like Pirates of Caribbean.
Free to play.
Period.
I think the small-time developer should be asking this question.
Disney has a lot of assets it can bring to the table.
IP. Creative talent. Tech.
It won't be generating headlines on Fox News when the addict passes $100/mo in "micropayments."
This I think is a model for disaster.
... per player. But they make it up in volume!!!!
Guild Wars is pay to purchase, but from then on it's free to play. Its graphics are astounding (better than WoW IMO - much less cartoony) and it supports huge numbers of players. It's got a huge amount of content - after 2 years of solid playing there's still lots that I haven't done yet.
I've got 3 accounts (mine, brother, mule - used to be 4, but I gave one to my nephew). The interesting thing with GW is that there is no significant advantage to buying additional stuff beyond the 3 campaigns (each standalone) and one expansion (which can be used with any of the campaigns). There are lots of things you can buy (extra character slots, extra account-wide storage, skill unlock packs, etc) but nothing that gives a significant advantage in the game - e.g. everything in the skill unlock packs can be unlocked by playing the PvE game, or doing well in PvP and using the points you get to unlock things.
Over the past 2 years we've gradually bought all the campaigns and expansions (most at sales, some full price) - all up, we've spent approx US$500 on the 4 accounts. ArenaNet has continually added new content and updates - enough that last night I finally bought the other 2 campaigns for my mule account.
GW has been more than worth the money I've paid - and maybe some day I'll buy some more character slots, etc.
APU = Thank You, Come Again
Of course I understand this is article is about MMOs, but I was surprised/not surprised about the Sims 3 making their new items all micropayment based using 'Simsbucks' or something like that (1 cent = 1 simbuck) most items are a dollar or less. And the only things that are free are people's recolorings of existing items and the little people and the lots they make. What with the Sims being the biggest game ever or something I would be interested to see exactly what sort of money they make from that?
I was looking at Warcraftrealms.com overnight; WoW's population is about to drop like a rock. It's already begun, in fact.
Character classes have been nerfed into the ground, with the Paladin or DK now being the only two worth playing. Any originality is gone. WotLK had the worst instances the game has ever had, and the only thing the developers now focus on is the Arena.
I can see it in my own behaviour; I'd be lucky to log into WoW once a week, now, and even just this last night, while I got up planning on playing WoW, it never happened, even though I spent practically the entire night idling on IRC, bored.
When I'd rather spend a night vegetating on Freenode than playing World of Warcraft, (which I used to genuinely love, incidentally) I know that the game has truly died in the ass...and it has.
I'm starting to think Guild Wars might be worth a look. WoW sure isn't getting much of my time these days, that's for sure.
The article lists only Three Rings and hints at what some other operators make, but it completely skipped the big names in the industry. Frogster and Runewaker (Runes of Magic), Aeria Games (Luminary, Shin Megami Tensei: Imagine and a dozen other MMOs), Nexon (Mabinogi), Ankama (Dofus) and all the others. Where's Barunson, NCSoft (the Korean version) and gPotato? These companies usually localize multiple games from Asia (or France in the case of Ankama) and then launch them as free-to-plays in Europe and the USA. Aeria reported several million players on a bunch of their games, and Frogster reports over a million RoM players in Europe.
If the figures Three Rings gives can be applied to these games as well and 10% of the players pay, there could be several hundred thousand a year in each game. And that's just for operating and translating. In their home countries, these games likely do even better since Asia doesn't like subscription-based MMOs.
Also, there's been discussions about F2P and subscription pricing and the cultural differences between MMO markets these last few months in the MMO blogs. Read Tesh, Wolfshead and Chris F.
It's nice to see real numbers in an article, but it would have been more interesting to get numbers from the heavyweights.
this topic seems appropriate as it was just recently announced that my favorite MMO, Dungeons and Dragons Online, was moving towards a Free 2 Play Hybrid model. The way it'll work is that existing subs at the standard MMO rate of 15/month or so will be converted into VIPs who will have access to all content as well as 500 points / month. Once the game is relaunched this summer, people will be able to play entirely for free, play for free but pay to unlock certain pieces of content or customization options or pay to be a VIP and have the 500 points/month to spend on convenience and customization options. This system is a generally well planned but highly complex system aimed at providing the most options and attracting the most players in a financially responsible way. More information about the specifics of the announcement can be found at the website for the game at http://www.ddo.com/
BlueBadger
maple story's developer, Nexon makes a lot through selling in-game NX Cash...
Interestingly, I can confirm those percentages. I run a free online game (see footer) where you can donate, if you want to. Whenever I checked, it was around 10% (+/- 2% maybe) of the long-term player base that had donated anything, ever. "long-term" here means that I don't count the accounts that go inactive within a few weeks, those people obviously just took a look and decided the game's not for them.
At the same time, those people who do give anything are often very generous. Again, confirmation there.
Does this work as a business model? Not for me (too few players) but then again I've never tried to make a living off what I consider a hobby. Very nice to know, however, that it can work. The problem is, of course, long-term viability. If your income depends crucially on a fairly small number of customers, you're always at risk of them moving elsewhere. Online gamers have a bit of a herd mentality, they often take their friends with them when they move somewhere else.
Assorted stuff I do sometimes: Lemuria.org
I was surprised that the article didn't mention the largest 'free-to-pay' game, Maple Story. It is played by more than 50 million players all over the world. And the developers get hundreds of millions every year, yes, from micro transactions.
Best of all the cash shop items are tradeable for in game items, so free players may not entirely loose out, (but at the cost of farming more.) Latest addition is an alter donation system that may take money out of the games economy by giving rewards to the rich, seems better than the lottery most F2P games have.
The free game give the violence and sex. The cash shop adds the gambling (can you get the rare pet) and drugs (Stamina Savers - double experience.)
Doubt the revenues will be made public though.