South Korea's Free Computer Game Business Model Hits the US

Anti-Globalism writes with this excerpt from AFP via Yahoo! News: "Seoul-based 'free-to-play' computer game titan Nexon on Wednesday blasted into the US videogame arena with a 'Combat Arms' online first-person shooter title that makes its cash from optional 'micro-transactions' by players. The game makes its money from players that buy animated helmets, outfits, emblems or other virtual items to customize in-game characters. To keep the battlefield even, players earn experience or advanced weaponry by skill so people essentially can't pay for power. ... Startups and established game makers including Japanese goliath Sony are venturing into the free computer game market, according to DFC Intelligence analyst David Cole. 'It looks like it could be very big,' Cole told AFP. 'It's one of the things everybody seems to be looking at. The challenge is it is a very new model and it remains to be seen whether customers used to a free model will be tight when it comes to actually spending money on it.'"

A new age of micro-transactions?

[compumike]

We've heard about micropayments for years, mostly for web content. But clearly this kind of market for virtual goods emerged in WoW -- without the explicit support of the company. It looks like the vendors are catching up! Still, there are lots of games that aren't based on continuous user profiles, and where the imbalance created might be significant and disruptive.

The other concern I have is about how to manage this between kids and parents. It's one thing to have a fixed up-front payment to buy a game, but to have kids (teens) linking credit cards (or even pre-paying) to a game seems like it might not go over well with the parents...

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Hey code monkey... learn electronics! Powerful microcontroller kits for the digital generation. [nerdkits.com]

An interesting market experiment...

[creature124]

I have played several Korean MMO's (with engrish interfaces, of course) based off the business model (Maple Story, Flyff and the like), and from my experience, most people can't/won't spend money on them, but those that do tend to spend big, customizing every piece of equipment they possible can. The fact that these games are still running several years on is proof of profitability.

It will be interesting to see how this pans out. It might be quite nice to play a free game with decent english ingame.

Re:Nice article...

[dolphino]

Probably because they have only "talked" about implementing micropayments in BF Heroes, just as the idea of micropayments is in the "what if" stages with titles like Spore.

Kingdom of Loathing

[ThreeGigs]

http://www.kingdomofloathing.com/ [kingdomofloathing.com]

Different type of game entirely, but same basic business model. And they've been doing things that way for 4 years now. Free to play, but $10 gets you a nifty trinket.

Yes, the business model works in principle and in practice. And it's about time that more genres of games that use that model become available.

Re:Not nearly the first

[Lueseiseki]

You're missing the point of the article. The article was detailing how American developers are getting in to the 'free-to-play' system that is traditionally used by most Korean developers. The first three games you mentioned are all made by foreign devs. Guild Wars costs money to play, MoM has two clients (one paid and one free, balance issues much?), and Graal Online is not cool enough to have a wiki article. In the 'free-to-play' games being speculated about, the entire client and entire experience is FREE, but you can also opt to pay for small player cosmetic differences and et cetera. This is my personal favorite method of paying for games (in most cases), because you can have the full experience of the game, and decide to pay if you've enjoyed it as much as to want to customize your experience.

Re:Question:

[lysergic.acid]

you don't have to customize your character. that's the whole point. you can play it completely for free if you want to, and many people do. most people who play MapleStory do not spend any money on it, but it's still profitable enough to be a huge success.

and the whole point of customizing how your character looks is for it to be seen by others, not you. do you buy expensive clothes just to look at yourself in the mirror all day? it's just like how people wear fancy clothes in real life to impress others. you want to express yourself aesthetically and distinguish yourself from others. they're just applying this social dynamic to online games.

RTFA. this model has already proven to be very successful in several free Korean MMOs. that's why the big gaming publishers are showing interest in it. it's not hard to understand why character customizations is appealing to some people, and therefore a potential revenue stream. if enough people download a free game, at least a small percentage of them will want to accessorize their avatar and will be willing to pay for it--especially if your game attracts female players.

the more co-ed and lively or interactive of a social environment you foster in the game, the more invested people will be in their avatars, and thus spend more on cosmetic add-ons and customizations. MMOs are naturally immersive because of their combined social and role-playing element. people willing to spend 20+ hours a week playing an MMO, then what's a few dollars on virtual apparel/accessories?

Re:Hrmm

[i_b_don]

Right, 20 pieces of flair is pretty stupid IMHO... i think it's a lot more interesting if you're paying for items that actually make a difference. The summary was very specific to point out that this isn't what you're doing, but why not? All you have to do is make the items that you can buy also items you can skill up to.

Think about it this way... there are kids out there who have all the time in the world, either on summer break, or they just have free time, etc. And there are adults who want to play but they have jobs with families but for them, time is more valuable than money. Allowing players to buy weapons or exp or gold Its a good way to level the playing field a bit.

d

Re:Question:

[WDot]

(I did RTFA). That's what I said--it makes sense in an MMO, especially since a. You can see yourself and b. MMO's are more social in general. It's great to show off your gear in a city or to whichever shmuck happens to walk by. But this is an FPS, which as far as I can see from the site doesn't have MMO trappings like cities or general social areas. It seems to be very much a deathmatch FPS, which means that you're less likely to be standing around enjoying the eye candy and more likely to be running, finding cover, and shooting.

Plus there's the vanity aspect of admiring yourself all clad in epic gear. ;) I'm not trying to get into an argument, I'm just asking if this will work as well in something that's less social and more action-oriented. I suppose if Combat Arms designs the game such that people see some of the same players over and over, it might work though.

Re:A new age of micro-transactions?

[KGIII]

http://kingdomofloathing.com/ [kingdomofloathing.com]

Way too much time invested. You can buy an IOTM or the likes but you can also work to earn them via earning meat.

Free-to-play aka F2P

[akmurray]

I'm the lead developer on a browser-based MMORPG ( http://www.domainofheroes.com/ [domainofheroes.com] ) that uses the same "free-to-play, micro-transaction upgrades" model. We're still in open beta right now, so everything that we would charge for is free, but the upgrades we sell are convenience and customization options like increasing your inventory or customizing your chat appearance. I hate item sales personally, so we don't have that option, good or bad.

The game mentioned in the summary is not the first game in the U.S. to embrace the micro-transaction free-to-play model (not by a long shot), but it is true that this model is becoming increasingly popular. We just got back from the Austin Game Developer's Conference and that was the hot topic on everyone's lips. "Are subscriptions dying? Is F2P the future?"