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Monetizing Free-To-Play Gaming Models
eldavojohn writes "Last week, a game consultant named David J Edery gave his two cents on why free-to-play (F2P) game models aren't as prolific in the West as they seem to be in the East. Aside from a few unprovable cultural divides, he makes some interesting claims concerning conversion rates of non-paying players to paying players. Some customers pay hundreds for functional items and only a dollar on aesthetic items while other users might be the complete opposite. He also notes that converting a non-paying newbie into a paying customer is not the same as converting a non-paying salty dog. He defines 'aggressive monetization' to mean how much money will advance you 'unfairly' in the game. He focuses on two classes of items: those that provide performance-neutral aesthetics and those that provide performance enhancing or functional advancements. He claims to have access to ARPPU ('average revenue per paying user' per month) rates among several game developers and states that 'more aggressive monetization model and a loyal, niche userbase can hope to generate $50 per paying user per month, on average,' while 'a F2P game that limits itself to flat subscription revenue and/or non-functional items is generally more likely to fall somewhere between $5 and $10 per paying user per month.' Like any good consultant, he also gives ethics a footnote in an otherwise verbose post on monetizing free to play games. Has anyone here had experience pricing items and content in free-to-play games?"
Wait, what?
Golfers spend considerable money on things which are supposed to improve their game. It's usually mediocre players buying stuff that won't help them. There's a lot of that in running shoes, too. (Much to the annoyance of Nike, their sponsor, the Stanford University track team trains running barefoot.)
If a game that is billed as f2p is too agressive in making things cost more people will be annoyed and leave, on the other hand make it opposite and you do not get enough money.
That balance is ofcourse modified by the way to "force" the user to buy things. For example if the grind without buying some items is way too slow the level of dissatisfied people will likely be higher, than if the grind normally is "slow" and the acceleration items for example change it to "medium"
I've played numerous F2P MMORPGs (at least 20) that operate on a micro-transaction model. While many of them were not good enough games to justify payment of any kind, those that have gotten to my wallet have done so in varying degrees. I have sunk over $400 each into three separate games, and one of those three has exceeded $1000. If you take the $400 figure, even at a $15/mo subscription [above average for a subscription based game], I have paid the equivalent of over 2 years of subscription time to each of these three games. I am not an exception to the rule. I have met multitudes of people in each of these three games that have invested at least as much as I have, and no shortage of people who have invested at least an order of magnitude more into them. For each person who isn't paying, I can assure you, someone is making up for it enough to turn it into a major profit.
When I was a kid, they had free-to-play games in the arcades. This was where you stood in front of the machine and pressed buttons while the demo played.
It's correct, for US at least. Europe is pretty good. I hope you aren't thinking Asian connections are shitty because they are slow to you? They obviously are fast for everyone living there and you can get up to 1 gbit connections in several countries.
However, other thing is while there are people with personal computers, most people use web cafes. It wouldn't make sense for them to buy games, nor would companies really like nor make the same amount of money if the web cafes just buy the games once. When all the items or game subscriptions are tied to individual accounts, players will spend money no matter if they play at home or web cafe.
I like to buy my game, and immerse myself in the content to have fun. The painful part of parting with cash is complete.
Buying "items" in a game kills the fun, in the same way that paying for sex kills my boner.
This is missing an important dimension. When he says aggressive monetization gives 5 times more money per player, he forgets to say that it also reduces the number of players, because some players are simply put off by the idea that the game is not fair.
Therefore it might not be more profitable.
I created this account specifically to reply to this post. He defines 'aggressive monetization' to mean how much money will advance you 'unfairly' in the game. Does not accurately represent the linked article. In the first paragraph: For the purposes of this post, I'm defining "aggressive" as the sale of items that impact gameplay and/or speed up a player's progress, in addition to other, less controversial premium features like aesthetic items and account personalization. Nowhere does it mention the word 'fair' or any variation of the word in the entire article. I have no comment on the linked article's content, just that slashdot has been filled with crap like this more and more often lately. I won't be continuing to visit slashdot(and my brand new account will go to waste) if this sort of posting does not stop. That is all.
The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. - Einstein
Do we really need the verbification?
The days of people making games as a labour of love are almost gone. Not totally, but close. It's now all about "monitization" and figuring out exactly how much you can get people to shell out for on an ongoing basis and companies keeping more and more control over the game after you buy it.
I think the golden days of computer gaming were 70's through early to mid 90's. Then, like Hollywood and RIAA music and much else which ends up with Big Money behind it, financial interests ripped out its soul.
After reading the article, the author seems to simply not talk about two things (at least as related to conventional MMORPGs).
First, he doesn't address the question of the effect of monetization on player base. In his HappyFunTime example, for instance, he blithely assumes that both monetization systems have the same number of players. But is this true? I know many players who actively avoid games with aggressive monetization systems, especially those where the best items are available only via RMT or where progress beyond a certain point requires RMT purchases (which is not related to whether or not you can continue to play forever for free, it's a question of whether, eg., access to the best end-game instances and raid zones requires paying or not). Their thought is that games aren't a paying job for them, and those sorts of games are going to be dominated by professional players for whom the game in fact is a paying job (they either make money off of player-to-player RMT if allowed or they're employed by a plat-farming and/or power-leveling service) They're also wary of putting time and effort into developing a character in a game where their progress and ability to play with their friends may be randomly blocked by the vagaries of real-world finances (eg. your friends want to run a raid but this week your checking account just doesn't have enough in it to pay for access to that raid zone). For them it's safer to stick with games with a less aggressive monetization model, ones where they won't have those problems.
Second, there's the question of how well the player base will stick with the game when economic times get tough. We're going through a time like that right now, for instance. I'd think that when times get tight players will abandon games that effectively mandate out-of-pocket costs (ie. have aggressive monetization models) every month more readily than fluff-only or flat-subscription games. In games where RMT gets you fluff-only items, you can cut your out-of-pocket costs quickly and decisively without seriously impacting your game experience. In flat-subscription games, you don't even have to worry about your cost level since it's going to remain steady and predictable. If you can afford to play at all, your play experience doesn't depend on how much you're spending. My experience has been that those things create a player base that finds the game a better value for the money and that'll be less likely to drop it than other things when their entertainment budget starts to get squeezed. IMO designing a game that's highly vulnerable to economic ups and downs is a more risky proposition than designing one that's attractive even in the bad times.
ie, free-to-play games that actually have a recurring cost for the developer. Because how to monetize free-to-play games has been solved when the first game came out: people bought your game, and you got their money.
But your entire argument falls flat on ONE important point. Where is the F2P behemot? WHERE is the Blizzard equivalent?
This is the amusing thing in most MMO debates. People talk about how succesfull PvP is, but not a single PvP game is a financial success. And F2P games are surefire money machines, yet none of them do all that well.
Simply put, the number of idiots that spend as much as the parent on a single game are few. Ther is more money in the masses then the niche. And F2P payers are niche. You get F2P fans arguing about the success for their game with a whole 2 servers and a third might be coming any day now!!!
The real reason for the geographic difference is that original american MMO's were run by dumb americans unable to provide any other payment scheme then credit cards. SOE was the first to sign up with global payment companies to provide world wide payment solutions. No credit card, no Ultima Online or Meridian 59. And you could forget about localisation.
The asian MMO developers operated in a vacuum, they had an audience that wasn't being catered to.
This has changed and WoW is played around the world.
Even today, most western MMO subscription companies are horrible about payment solutions. Don't underestimate the difficulty of selling to customer who can't pay you money.
But in the end, F2P tends to be more expensive. For 1000 bucks you could have bought 3 lifetime editions of Lotro. Why pay more for lesser games?
F2P only appeals to the cheap skates and the mathematically challenged.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I remember in the early 90's, the SysOpp of our local BBS had a variety of level-limited varieties of what today is called a MMO (although it was only as massive as a typical football team, and only one or two of us could be online at a time). They were ASCII/ANSI based dungeons where you fought monsters and got stuff. Only 15 minutes of play per day per person please! Other people want to dial in!
Eventually we all chipped in a few bucks (Convincing my mom to write a check to a stranger I met on the computer ("how is he on our computer?") was a challenge). But eventually we got enough dough together to buy a license so we could all level up, and go attack the much more powerful monsters represented by such fear-invoking characters as '#', '%', '&'. Oh yeah, I remember old '&'. He'll never cross us again. I'll tell you that much.
There's probably more, but that's the ones I've seen.
I had a really long, intelligent-sounding post detailing two F2P companies, but it got lost when I hit the back button. Oops.
Summary: F2P works, in both models.
Aesthetics: People will pay real world monies for in-game aesthetic improvements. See: Guild Wars, entire economy revolves around bling with stats identical to ordinary items bought from NPCs, just shinier.
Functionality: Silk Road Online. Either you pay to quicken the grind, get EXP, and stacks of pots/etc, or you are food for bots. Perfect World: same deal. No EXP scrolls? Enjoy getting PK'd. Oh, and watching everyone else floating around on really pretty animals in really pretty armor. PW is also interesting because they changed it for the Western release: much LESS grind, you level faster. They figured we westerners wouldn't sink as much time into grinding/farming.
Soth SRO and PW are expanding their userbases and continually adding new servers. GW isn't doing too poorly either (I still play, and buy items from their in-game store with cash).
To my mind, Kingdom of Loathing has done a fantastic job of handling this type of problem. Though not what most people think of when they think of a F2P MMO, they have made all items that one donates for tradeable, allowing non-paying players to experience the "premium" content if they are willing to farm hard and long enough for in-game currency. So people who are willing to pay can buy extra to sell in game to people who are not willing to pay real life money for them. It's a system that could easily have broken down horribly and made the whole economy wildly unbalanced, but through attention to detail and a commitment to making all items and content available for every player, they have succeeded where many games have failed.
The only drawback to running barefoot is you can easily pickup hookworms
It's not always a drawback. It can help people get over autoimmune disease.
Players are more likely to pay if they get more advantages out of it, but players who can't pay or can't pay enough to stay competitive won't really have an incentive to play.
The game has to remain playable regardless of the level of monetary contributions or else it ceases to be about gameplay and turns into a bidding war. While that might give you a couple high income players, I doubt it's feasible in the long run.
I used to play a MUD by a certain well-known developer in the MUD community. It was advertised as free-to-play, pay-for-perks, but its scheme had two major flaws:
The power plateau was ridiculously high, it took thousands of dollars AND months of playing to reach it, per character.
The baseline character power level, at which the game was by design balanced required an investment of around $200-300. There was no segregation between paying and non-paying players, both competed in the same game world. This put non-paying players at a big disadvantage unless they just wanted to use the game as a glorified chat-room. The developers used to counter this argument on message boards saying that players can get the perks through contests and in-game currency. However contests were not frequent enough and too competitive to make much of a difference (usually the same clique of players won). And buying them for in-game currency required weeks of grinding quests (mere knowledge of which required a lot of gameplay beforehand) competitively against other players with similar goals (because the game offered no instancing).
Was the game successful? Moderately, they're making some money, they've made quite a lot of a couple selected players with deep pockets. But ultimately there never was enough players to keep the game from feeling empty, usually just a couple players per character class at any given time. I heard their other games using the same model were more successful though, on the order of 500 players logged in on the most popular one. But I can't help but wonder what kind of numbers they could have raised if the price for playing the game competitively was an order of magnitude lower. Their MUDs are actually worth paying for, compared to all the uninspired DIKU clones, just not that much.
I regret sinking $200 into it before I realized I just can't compete without buying the equivalent of a used car in skills and virtual items.
1% of the player-base pays for 100% of the costs. The rest is profit.
In my opinion, all premium content should be able to be purchased with the in game currency.
The reasoning? Some people are poor, but have a lot of time. For example, the disabled. Rather than absolutely limiting them (they're barely getting by, most likely) to low end items/gear/decor, why not just make the items available in game at a disproportionately high cost? Like for example, your 'stamina' recharge that lets you fight/gain experience/items/etc could cost half a day's worth of grinding and it could cost $2. That fancy hat might cost $10 and take you a couple of days to farm for. There's really no downside to this.
The grinders can grind, the payers can pay. It's economic specialization. Those disabled folks can grind to their heart's content and feel like they're earning something, maybe sell it for some in game currency or *gasp* real cash in a competitive amount with the game servers. Those payers can feel awesome when they get a $0.10 discount on their Fancy Hat because they bought from the grinder.
Nothing will make me stop playing a 'F2P' game faster than setting up obvious noticeable speed bumps to keep the poor poor and the payers on top.
Job? I don't have time to get a job! Who will sit around and bitch about being broke and unemployed then?
How good the game is able to hold or pull an audience. Maple story is probably one of the more successful F2P. I didn't play too far into Maple story (maybe level 40ish) so I'm not the most understanding of it, but, it seemed to be able to grip onto those kind of people who are willing to pay for F2P even though you wouldn't be able to buy a item advantage in that game. you can buy cool costumes (cool compared to what you usually have to wear...) and I think EXP boosters (but those are time savers more than a leg up on those who don't because what cant grinding do that a EXP boost could do besides make things faster) in game. What I think made the game popular compared to other F2P's is the fact that the UI (although stupid looking) was very functional and easy and the game play generally copied what the UI did... the easy part at least (although time consuming). I think, as always, game companies shouldn't try to trick people into giving them the most money by certain methods of player-base/money per person and just simply make a good game that keeps people on for a long enough time they feel it worth it to spend money on the game (like with league of legends for me. i played it enough and found it a decent enough of a game to put 30 bucks into it. I'm still playing and don't see me stopping until valve hopefully makes a better AoS).
This is starting to get ridiculous. The term "free" means "no cost". A demo or "lite version" is only free if you don't advertise the features of the paid version, similarly, a time limited trial isn't free anymore than something with no payments for 90 days. Adware isn't free, nor is anything that you need to exchange valuable personal information for. And "buy one, get one free" is just plain nonsensical.
Lately, commercial software providers have been really abusing the word "free". These F2P MMORPGs are an excellent example. Some MMORPGs actually are completely free, but they're next to impossible to find because of all the P2P MMORPGs that call themselves free. The Android application market is another good example of how demos, trials, adware, spyware, "free program only usable with paid service" and "mandatory donation of a fixed price" software makes truly free (gratis or libre) software hard to locate.
IMHO, we need a new word to differentiate "FREE!!!!! *" from literally "free". I would say "non-commercial", but many businesses generate profit from open source software, and a free sample is most certainly commercial. Unfortunately, there are too many people that can't wrap their head around non-monetary costs to reclaim the proper word that describes this concept.
A good example of a successful f2p game with a 'fair' system is League of Legends. The entire game is free, but they make most of their money by selling custom skins for different champions that players can control. It has no functional difference in the game, but somehow they manage to sell enough to keep the company going.
AC:
Internet connections in the West are extremely shitty compared to those of South Korea and Japan.
odies writes:
I hope you aren't thinking Asian connections are shitty because they are slow to you? They obviously are fast for everyone living there and you can get up to 1 gbit connections in several countries.
BREAKING NEWS:
Reading with comprehensions still out of reach of masses.
The reason I don't play any of these games (Combat Arms, I'm looking at you) is because the for-pay items are hugely unbalanced. Yes, I enjoy geting pwnd by mommy's credit card....
D&D Online appears to be the most balanced of them all though. All you can get is character slots, potions, and hirelings.
The best part as a kid was when you know the Galaga glitch to get a hold of the ship for free in demo mode.
http://screwattack.com/blogs/ScrewPenguins-blog/The-Galaga-Glitch-Play-the-Demo-Screen
if i remember the post from turbine correctly, lotro will be f2p in a month or two
btw there is also ddo, being f2p since last septembre ... i wouldnt call that a small f2p game, since they went f2p the content get updates roughly every 2 months, one more server had to be opened (7 total currently) and their player base counts in millions
you can still go the subscription path with ddo if you prefer, but you have the choice
Seriously? Who cares. This isn't "stuff that matters".
Too bad the publishers out there haven't thought to actually lower subscription rates to $5-$9 per player like how much they are making from these free games. At some point someone decided $16 was a good idea, and subscriptions have dropped ever since. We don't want to re-purchase the game ever 2 to 3 months. I dont think any of us are foolish enough to believe it costs them that much for bandwidth and to maintain the server. People just don't like feeling like their getting ripped off, and any game that charges you over $10/month is without a doubt ripping you off.
Nexon's Maplestory seems to be doing well over here. Well enough co-workers gave told me they've bought Maplestory gift cards for children they know as presents.
Company of Heroes Online was released in China, then Korea, and looks to do well here as a hybrid. Made in the west, sent east to be converted to free to play, and is now back.
Why isn't f2p as popular here? There are two reasons. #1 is entrenched systems. You've got systems set up at old giants like EA dedicated to the traditional woo the press/buyers and get extra copies of latest game into the stores. You can't change the world over night, but as Company of Heroes Online, Battlefield, etc show, you can do it.
#2 consoles. Most people in the west game on consoles other than Blizzard games. Korea and China still harbour quite a bit of animosity toward Japan and blocked their consoles. Which led to a ton of pirated western PC games. Due to economic differences where somebody in China earns so little it would be like spending $600 on SC2 the west had no interest in attempting to sell to them, but the Chinese and Koreans did. They figured out they should embrace piracy and give things away for free. But for just a little bit of money you can get convenience items. Now there is a market around there that never could've grown up in a console centric society.
It's changing over here, especially on the PC, but it'll be a slow change due to the way consoles work. Although with new phones having so much power and HDMI out, maybe the console itself will go away soon.
What happens with many F2P games in Asia is the division of users into paying and non-paying categories. As a free user, you simply can't compete with the paying users and do not attempt to. But you can become a mid-level player and get away with lots of stuff without paying a dime, which is part of the fun. It's like being a startup making a living among the corporate giants.
I think part of it is that KOL is very light on the PvP aspect, and it can be opted out of entirely without missing much. If PvP was a bigger part of the game, though, I think you'd see a much bigger gap between those who donate & those who don't.
Have you been touched by his noodly appendage?
Apparently you are among those masses. What odies was trying to do is reinforce the first comment. Another AC commented back with a message of astonishment and odies was giving further detail for that confused poster. Likely odies assumed that his state of astonishment was due to thinking that Asian connections are slow as that Someone in the USA would experience a large amount of latency between their computer and one in an Asian country.
Err... I took "Wait, what?" to mean "Wait, what [does this have to do with the story]?"
Golfer shoes are pretty much in trend these days and people wear it irrespective of whether they have ever played Golf.
I play Combat Arms, and they've started seeing the light recently, now that you can pay for some permanent weapons. Most weapons and gear you can just rent, which is ridiculous. Worst yet, some pay a rent to be Elite Moderators, and then just kick any good players who kick their butts, so for $15 or so Nexon get from them, they end up ruining the game for hundreds.
"Free-to-Play" leads to dishonesty like for example when you pay money for in-game items and your item is later rendered useless by a new better item released in the game store which you "have" to buy in order for your character to remain competitive
Similarly game publishers are entitled to change the EULA without warning so your hard earned cash spent in good faith within the game world towards a certain goal can become useless when the publisher decides to change the goal posts to force people to cough up cash to get their character back up to the level of gear that he/she used to have.
I hate "free to play games" because of this and refuse to play any of them, what kind of morons do these money grabbing game publishers take their user base for? A certain Battlefield Hero's stands out for me as a shining example of a game where the publish did exactly what I mentioned. Pity they are so good at making games, I very reluctantly picked up one of their later titles which is not "Free-to-Play" but with which they include a code you can only use once to gain access to "VIP" content essentially forcing you to pay the publisher directly for this content if you buy the game second hand. Game publishers who insist on these dishonest business practice will be recognized for the same and will get what they deserve over time. Short sited immediate turnover methods to please investors will very likely backfire in the longer term and I for one will be grinning like mad when it does.
You really should use correct grammar if you're going to criticize others for their reading skills.
The conversation wasn't that hard to follow. As others have pointed out his comments were intended
to convey additional information about the environment for gaming in other countries.
-- Programming with boost is like building a house with lego. It's a cool but I wouldn't want to live in it
My take: These f2p games should be regulated, to ensure that they are not taking advantage of people with some instability causing them to spend way more than is healthy.
I think their business model relies on scamming these people out of their money, essentially.
And they seem proud of that.
Giving an unfair advantage to players who pay into a free-to-play game is at least less unethical than what EA/Dice did with Battlefield 2 (and presumably other titles - I don't know as they've lost me as a customer), which is to charge everyone for the game and then sell balance-changing upgrades to people who pay them more money.
Fucking. Evil.
Funny - I play a F2P game called Kingdom of Loathing, which releases a powerful item at the start of every month, and retires the old one (thus ensuring in-game prices for them will go up over time, as you can still buy old ones from players, but no new ones will ever be generated). Every so often a new item of the month will obsolete an old one, and people generally *like* that this happens. In fact, there have been times when many people have complained about it *not* happening - about an old IotM still being necessary, despite it having gotten to be ludicrously expensive.
Of course, the difference, I think, is in how the developers treat us, their customers - those particular game designers go well out of their way to make sure they're not perceived as money-grubbing, most notably by making sure that you actually can enjoy all the content without giving them a penny (it'll just cost you way more in-game dough, to buy them from players who did give them cash). It's a good system, I think. (I've definitely seen F2P games that *were* obvious money grabs *cough*maplestory*cough* - I try to avoid those.)
You've obviously given this no thought from any viewpoint except your own. If a game published no new content, or no content that was any better or different than what was currently available, then people would rapidly become bored and quit. The business owners have to earn money from the
game or they would just get jobs somewhere else. Of course there's going to be new and better content. Further, their model works, as evidenced
by the fact you bought one of their games even after they "cheated" you of your expected reward. Look up "Rationalization" and "Sour Grapes" and see
if they apply to anyone you know.
-- Programming with boost is like building a house with lego. It's a cool but I wouldn't want to live in it
Oh my, you sound like one of them. I'm not even going to stoop to flaming your for your unfounded statement.
I've been the victim of corporate abuse in this regards when the publisher changed the goal posts to generate revenue. I don't care if it was to save their bacon or not.
Nope, never worked for or owned a game company.
So in summary:
If you don't get what you want it's "abuse".
You don't care about anyone but yourself.
Thanks! I've been thinking about creating a game. You've been very educational.
Now I see what I can expect in the customer support if I start a game company.
-- Programming with boost is like building a house with lego. It's a cool but I wouldn't want to live in it
It's not "what I want" it's what the publisher promised. They said the game would always be free to play and your character would not be "crippled" by choosing to not pay for items but they went back on their word and angered a lot of fans.
Yes if you start a game company you can expect people to hold you to your word and slag you if you use deception to generate profit. Good luck with your game company.
Thanks. Out of curiosity can you provide links to the game publisher. I'd like to see what they did in more detail.
-- Programming with boost is like building a house with lego. It's a cool but I wouldn't want to live in it
www.battlefieldheroes.com if you search through their forums you'll find very long and angry threads that date back to the end of last year. I had spent about 50 euros on buying customized clothes items and a couple of weapons for my characters which is roughly what I'd be prepared to pay for a new game. Shortly thereafter EA basically made the game pay-to-play all the claims of being free are now a lie, if you don't spend money on consumable abilities you can't compete.