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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?"
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.)
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.
The days of people making games as a labour of love are almost gone.
Another way of saying this is:
The days of people wanting to play games made as a labour of love are almost gone
The general public likes games with high production value, and is willing to pay for them. That's the way it goes. However, I think your statement is also false. I would say:
The environment where people make games as a labour of love is becoming highly fragmented
It was easy when everybody you knew had a Commodore 64 or Apple II. You wrote a game, put it on a disk, and showed it to your friend. Now, the market for homebrew is very, very fragmented. There's homebrew for every console imaginable out there. There's homebrew for Flash games, homebrew for iPhone, homebrew for Android. And there's still homebrew for all the legacy platforms (something that didn't exist during your "golden days" because there were no legacy platforms!). In terms of shear numbers, I'd guess that the number of homebrew games is far greater now than at any time in the past, due to the ability of like-minded people to meet over the internet across long distances.
Personally I think DDO gets it about right.
There is enough free content that you can make it to maximum level without paying anything, but you will have to run through the same quests way many more times than someone who pays the monthly subscription so it will be more boring in the long run.
Also you can buy things that speed up your level gain by 20% and items that help you to not have to grind to get certain things that people spend a lot of grinding time on like crafting ingredients.
Overall the option to spend money to speed up things that would take really many hours of repetition is fine, as they still allow you to do the grinding as option. This allows both people with little money and lot of time and lot of money and little time to particiapate. But still raid loot is way better than anything in the shop.
The number of people there again helps to keep people intrested as there are groups to adventure with.