Monetizing Free-To-Play Gaming Models 164
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?"
Golf works like that (Score:5, Interesting)
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. [dailymail.co.uk])
Anecdote (Score:5, Interesting)
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.
Re:and thus dies the soul of gaming (Score:3, Interesting)
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.
Re:It is a balancing act (Score:3, Interesting)
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.
Re:Maybe (Score:1, Interesting)
First of all, WoW is an anomaly in terms of subscribers. While there have been several hopefuls that have tried to duplicate WoW's numbers, nobody has achieved it. Not even the previous subscription MMO champion, EQ1, had anywhere close to number of subscribers. You do not need to have massive numbers like WoW for your MMO to be considered a "financial success." Unfortunately, a lot of companies nowadays see Blizzard's pile of cash and want in, so they sink a ton of capital into a supposed WoW-killer. However, trying to out-WoW Blizzard has proven folly for all of them.
As far as PvP, a PvP focused game will probably always be niche, but sustainable as long as the devs cater to that niche. A lot of former DOAC players tell me that they were happy with the game until the devs tried to release too much EQ-style PvE raiding content. In other words, when they ignored their niche and tried to go for more of EQ's players is when they had problems. Then again, DOAC is still running (barely) after all this time. I think Mythic was able to reverse some of what they did before completely destroying the game.
Right now I think the big niche games are Darkfall and EVE, which to my knowledge are in the black because they are doing a pretty good job of catering to their niches and not trying to WoW-ize themselves. They aren't going to have the subscriber numbers that WoW are, but they are going to be able to keep themselves going.
F2P, on the other hand, baffles me. I cannot fathom how these games are making money on the western market. Most of them I've tried are utter garbage, and in many you will end up having to sink close to the cost of a WoW subscription into them to remain competitive. Runes of Magic is at least playable, but it is a subpar WoW clone that is inferior in almost every way. Why start paying into it when you can just play WoW? Then again, it baffles me how some people can even consider sinking cash into all those shitty Facebook games.... so maybe the passable ones like RoM are able to stay afloat because a lot of people are suckers.
The F2P model is hot right now, but I suspect that it is going to crash hard once the Zynga fad wears off and people realize they just blew their money into a subpar game experience. After that, I expect that the hybrid model will be the one that sees the most success. One where you pay for a subscription to a game, and if you want to buy some bonuses once in a while, you can for a small fee. Blizzard already seems to be playing around with this model with pets and mounts.
Re:Anecdote (Score:1, Interesting)
I can attest to the long-term addictiveness of the game. I've been playing Pangya since 2006, over 4 different servers (South-East Asia, Korea, Japan and the main US one) and I just can't seem to put it down.
The game is totally free-to-play and very little investment is needed to to be on-par with 85% of the game's population (as TriezGamer has elaborated) and most of the other items in game are very optional.
However, the game's main source of income is really from the lottery aesthetic items of which there are three types; in-game currency based, spending-based (spend 1000 points on any in-game item and get one scratch card free) and direct-buy based (spend 2000 points for a chance). Of the three different lottery types, two are tradable in-game; and those items form up the bulk of the game's in-game economy. It's actually a model that seems to work quite well since half the fun of the game is really about trying to get all those "rare" items.
Over the past 4 years playing it, apart from the initial investment for decent clubs and clothes, I've sunk in about maybe $500, and that's just on my student allowance (sorry dad, I did skip quite a lot of meals despite you telling me not to). I just started working, earning a meagre internship salary, and out of that I've just spent about $200 in two months, trying for the lottery items.
Admittedly, the F2P model is great for the long-term. As long as the game is relatively fun and easy to get in to, bundle it with the right revenue generators and have a good community interaction (sadly, something that is a bit out of control by the devs), it'll result in a decent long-term revenue stream. I know of pro players of Pangya that are still playing and spending quite a bit of money even after 5-6 years playing the damn thing and reaching pretty much the pinnacle of the game. It's just a game that you can't put down.