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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.
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.
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
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.
If it is a game like the traditional fantasy MMO, then high end raiders and solid group dungeon runners will start resenting people who can just hit a store and buy with real-life currency items that are up to par with them. If the game wants to be another Second Life, that is one thing, but I'm sure the high end players in WoW would start leaving in droves if Blizzard had sets of armor for sale with stats that were equal to items earned in raids/groups.
Appearance stuff is different. People buying non-combat pets are looked at money wasters, but it doesn't affect the game. Mounts are iffish. In a way, they are a bargain for WoW players who have a lot of alts because it means all 50 chars on the account have some type of steed. This also goes for appearance armor. If someone wants to have their mage wear plate for $10, go for it, as long as the armor doesn't give a stat advantage.
When it gets over the line with traditional MMOs is when someone who spends lots of cash at the store starts having a PvE or PvP advantage. What would kill a MMO is an item that as significant as game play as journeyman's boots in the early days of EQ1 [1] being in the store. This means that one would have to purchase stuff in order to keep their membership in a raiding guild, or be on the top tier (and trust me, in some MMOs, having an item is as important if not more than having a decent gearscore in WoW [2].)
[1]: In the early, pre-Luclin days of EQ 1, jboots mean the difference between booking it to a zone if one got overwhelmed with mobs, versus certain death. Your membership in raiding guilds depended oftentimes on having this item.
[2]: Gearscore is probably the most critical thing people judge on in WoW. You can be a moron, but if you have a high enough GS, you had to at least have survived enough high end fights to earn good equipment, assuming the character was not ebayed.
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.
monetize
–verb (used with object), -tized, -tizing.
1. to legalize as money.
2. to coin into money: to monetize gold.
3. to give the character of money to.
4. Economics . to convert (a debt, esp. the national debt) into currency, esp. by issuing government securities or notes.
Also, especially British , monetise .
Origin:
1875–80; L mont ( a ) money + -ize
—Related forms
monetization, noun
It's not a verbification, it's a legitimate word used correctly in the summary, you ignorant, misguided wannabe grammar nazi.
Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
It's even worse when the grammar nazi is completely wrong.
Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
There's probably more, but that's the ones I've seen.
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.
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.
You're completely right about the difficulty in paying for most western MMOs. I recently started playing a relatively new one, and whenever I look at the help channel, multiple times a day I see people going "I wanna upgrade from my trial account, is there any way to pay without a credit card?" but for that game, there isn't (well, maybe paypal, I can't remember). And that's just when I'm online. That means this company's losing out on literally dozens of customers every week, just out of ones that mention it. How many more customers on trial accounts just poke around for payment, then give up? How many others research a bit, then when it's only CC payment, decide to not even try? Due to an anaemic payment method selection, they could be losing out on thousands of dollars a month in revenue. Considering it's a fairly small MMO right now (I think I heard about a 25,000 player base), that's not an amount I'd think they could afford to turn away from.
Canada: The US's more awesome sibling.
You are attempting to create an argument where there isn't one. There is no NEED for a 'behemoth' free-to-play game, and I don't see where anyone was saying that there needed to be one. Free-to-play games don't have to be massive to succeed at making money, which is the whole point.
In addition, you're making the assumption that WoW is successful because it isn't free to play -- instead of the fact that it had a marketing behemoth (worldwide), an extremely popular brand name (worldwide), and a very highly praised development team (worldwide) working behind it.
Furthermore, if you WANT to see sizable Free-To-Play games, they're out there if you look. You also mention 'lifetime' subscriptions to LotRO -- a game that is in the process of converting to free-to-play precisely because of the success of DDO's free-to-play conversion that the company already had.
>Why pay more for lesser games?
Who decides they're lesser? Subscription numbers are meaningless to personal tastes. I've had more fun playing free-to-play games than any retail subscription game - and not for lack of trying them. I've had active subscriptions at one point or another to approximately half of the mainstream subscription MMORPGs in the west.
Another benefit of free-to-play games: When I'm struggling financial, I can still play and just stop paying.
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?
Look, this verbificationismness needs to stop. Let people use wordy things the way they want. Be tolerantish.
If you can read this, I forgot to post anonymously.
Look, this verbificationismness needs to stop. Let people use wordy things the way they want. Be tolerantish.
Funny, and I actually agree. This is why I questionized my original response.