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

They had free-to-play in arcades when I was a kid

[noidentity]

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.

Re:Long time lurker, first time poster.

[gamricstone]

Dear god I didn't realize it would remove every newline I inserted manually.

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.

Re:Maybe

[TriezGamer]

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.