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?"

Comments

Gaming profit models

[peterofoz]

From the games I seen I can draw the following profit opportunities:

• F2P comes with a banner or side advertisement. Subscribing eliminates the ad. Example: Runescape. Aggressive would be popup ads or commercials. More subtle is ads incorporated into the game landscape. Example: SecondLife
• In game items - cosmetic. You just have to look good in some social games. Aggressive is where you have to have a clothes item to enter an area or complete a quest where you already have a time investment. Example: SecondLife, Farmville.
• In game items - functional. These items let you get ahead with better tools or weapons. Aggressive is where it provides a really unfair advantage. Example: Mafia Wars. Some have have items using in game cash you can earn by playing or find along with other kind of cash you have to purchase. Example Farmville, Wizard 101.
• Time advantage. Some games have recharge timers where you can just wait 24 hours to recharge, or pay for an instant recharge. Example: Evony, Wizard 101 Pet Games
• Content - Games offer a F2P area with access to additional content by subscription or by single cost per area. Examples: Wizard 101. Some games provide a place to put content, but you have to create it. Example: SecondLife.
• Content + Subscription - Games that require you to purchase the content and then require a subscription for online play. Examples: Eve Online, World of Warcraft.
• Real World purchases - Games that blend game play with real world purchases, such as buying a coffee at 7-11. Example: Mafia Wars, Farmville. Many game makers also have a store where you can buy shirts, hats, mouse pads, etc. Examples: Slashdot, Jagex.
• Information - Hints and Helps - Games (typically puzzle quest types) where you might need a hint to complete a puzzle. You get the hints by purchasing a book or magazine, or by calling a help line that charges by the minute providing help via a menu tree. Example: Zork (classic). Newer games might use SMS Texting and let the phone company handle the micro-transactions.
• Marketing - Games that provide free play, but sell your email address and demographic details to third parties.
• IPO - Games that provide free play to build a 1,000,000 user base, at least until the company is sold to investors who then figure out how to monetize it.

There's probably more, but that's the ones I've seen.