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Valve Switching Team Fortress 2 To Free-To-Play Increased Revenue Twelvefold 196

Posted by Soulskill
from the ahh-the-rare-dodecaboost dept.
An anonymous reader writes "We've frequently discussed the growing trend among video game publishers to adopt a business model in which downloading and playing the game is free, but part of the gameplay is supported by microtransactions. There have been a number of success stories, such as Dungeons & Dragons Online and Lord of the Rings Online. During a talk at the Game Developers Conference this week, Valve's Joe Ludwig officially added Team Fortress 2 to that list, revealing that the game has seen a 12-fold increase in revenue since the switch. He said, 'The trouble is, when you're a AAA box game, the only people who can earn you new revenue are the people who haven't bought your game. This drives you to build new content to attract new people. There's a fundamental tension between building the game to satisfy existing players and attract new players.' He also explained how they tried to do right by their existing playerbase: 'We dealt with the pay-to-win concern in a few ways. The first was to make items involve tradeoffs, so there's no clear winner between two items. But by far the biggest thing we did to change this perception was to make all the items that change the game free. You can get them from item drops, or from the crafting system. It might be a little easier to buy them in the store, but you can get them without paying.'"
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Valve Switching Team Fortress 2 To Free-To-Play Increased Revenue Twelvefold

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  • by decipher_saint (72686) on Thursday March 08, 2012 @05:48PM (#39294827) Homepage

    Congratulations guys ;-)

  • We have a winner (Score:5, Insightful)

    by LostCluster (625375) * on Thursday March 08, 2012 @05:52PM (#39294883)

    Call it freemium, call it widget frosting, call it whatever you want... giving the core item away and selling the addons has always worked in the gaming industry and this is just another victory for the concept.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      giving the core item away and selling the addons has always worked

      FTFY

      See razors & blades as prior art.

      • by r1348 (2567295)
        Or HP printers and inks...
      • by marnues (906739)
        Not in the slightest. I can play TF2 without paying a cent. I cannot user a razor without a blade. The first is paying for additional content. The second is rent seeking.
    • business school 101 (Score:5, Informative)

      by slew (2918) on Thursday March 08, 2012 @06:01PM (#39294995)

      A common truism you learn in business school is that it's usually easier (and less costly) to sell more to your existing customer than to try to get new customers...

      If every new dollar you earn is less costly, you have more operating margin which you can then use to feed back into your business and make it grow faster. Thus cross-selling and up-selling techniques are really just no brainers that nearly everyone uses. Works in almost any business (including the gaming industry).

  • Pay to win (Score:5, Insightful)

    by Omnifarious (11933) * <eric-slash@@@omnifarious...org> on Thursday March 08, 2012 @05:56PM (#39294925) Homepage Journal

    I think keeping 'Pay to win' concerns at the forefront is the key. Nothing turns me off of a game faster than that. At least, when the game is one where I'm competing against other people online. When it's a single-player game, the idea that you have to pay in order to win really irritates me, but if it merely takes a fair amount more skill to win if you don't pay, then it's sort of OK.

    • Re:Pay to win (Score:5, Informative)

      by Opportunist (166417) on Thursday March 08, 2012 @06:21PM (#39295249)

      When I heard TF2 is going f2p I was fearing a p2w system, akin to many other f2p games where you are essentially the "product" for those that dump money on the makers because your tools, your weapons, your equipment just cannot hold a candle to theirs and you're, essentially, akin to some rather smart bot on easy difficulty level.

      Valve solved the problem fairly well. As far as I can tell, you can have all the items for free that someone who spends money can have (well, aside of some vanity items without any effect in game). What happened is that you can either dump money on them to get the weapon you want NOW or you wait for the random system to drop one on you.

      Also, the weapons in TF2 are not like in most other games where you don't touch your "newbie" gun anymore once you got something better. The fun part is that you don't get more powerful with more choice, you just get more versatility and more choice for certain situations. Pretty much every item that gives you some bonus in one area has some rather nasty drawback. A gun that slows the enemy does less damage, a rocket with more direct damage does less splash damage, a sniper gun that does more damage uses tracer rounds and gives away your position... you get the idea.

      • What happened is that you can either dump money on them to get the weapon you want NOW or you wait for the random system to drop one on you.

        At least half of the freemium games out there do this, and it's only marginally better if at all.

        You can grind for a weapon, and eventually, after spending time slogging away with weak weapons, you'll reach the point where you've got equipment that you want for the class you like (hopefully). Or you can spend the money now, and immediately have the equipment you want.

        Some of the weapons in TF2 certainly seem better than their free companions, and even just granting extra versatility in a game is still grant

        • Hmm... quite seriously, I play most of the time with stock items, there are only a select few that I actually consider interesting as an option, but they're usually for very special occasions that I could as well tackle with the stock items, it's just more fun to do it with the alternatives.

          I couldn't really put my finger on any non-stock weapon and say that it is THE default choice for any of the classes. Most just "allow" you to stick with your class instead of switching to another one. Like, say, using a

          • Again, even just being able to eventually have a weapon drop or craft it is something I'm not for. I just plain don't like being at a disadvantage just because I haven't devoted the same amount of time into a game or paid as much money as other players. Just not my cup of tea. I prefer even playing fields, especially for games I've paid retail for.

            And that's even if it's "only" that I'm less versatile or have fewer options. There may be an item that suits my playstyle better. There may be an item that count

        • I am mildly annoyed that I paid money for this when it was standalone and all I got was a stupid hat.

          Or you could have bought any of the dozens of 'multiplayer' shooter games that have come out since the release of TF2 where there are no servers still up, no players, and no game to enjoy.

          TF2 going F2P added a ridiculous amount of content and prolonged the playable life of the game by years. You don't have a game if nobody else is playing.

          • That's why I'm only "mildly" annoyed; that and how these days I only tend to play the game when a friend pulls me into it anyways. Mild like the "spicy" food the local Asian restaurants serve white people.

  • by deciduousness (755695) on Thursday March 08, 2012 @05:56PM (#39294935)

    I think the key to all of this for me, and why I like it over other similar models, is this statement:

    "You can get them from item drops, or from the crafting system. It might be a little easier to buy them in the store, but you can get them without paying."

    If you are lazy, you can pay. If you don't want to pay, you can work a little for it. Sounds good to me!

    • by AvitarX (172628)

      I like the way puzzle pirates did it.

      Everything came from drops, and you needed gold to use certain things (kind of like a luxury tax). You could buy gold with in-game money/items, or real life money. The game economy itself remained the same as in the monthly subscription version though. No amount of money created game items from scratch (with the exception of gold). The general currency was pieces of eight.

    • It takes a long time to get all the items with a 6-8 item cap per week.

      Oh, did Valve forget to mention that free players can receive items from trades, but not give items to others?

      • by Xeranar (2029624)

        . . .Free players need only buy 1 item from the Mann Co. store to move up. I believe the cheapest item in the game hovers around .25 cents? Maybe 50 cents..It's still exceptionally cheap. Once again the upgrade weapons are accessible through crafting and achievements. Achievements can be done on achievement servers and would speed the play up all together. The argument is hollow because for some reason detractors desperately want to make this a greater ideological argument than it is. Valve made a grea

    • by brainzach (2032950) on Thursday March 08, 2012 @06:31PM (#39295351)

      Paying doesn't mean you are lazy.

      Time is money. Maybe someone with a busy life doesn't want to spend 10 hours getting a $5 dollar item for free when they make $60 an hour in the real world.

      • by DreadPiratePizz (803402) on Thursday March 08, 2012 @06:55PM (#39295559)
        The problem with this line of thought is that you've ALREADY decided to use your time for leisure and not for making money. There's no opportunity cost there; by playing the game you've already committed yourself to not making money. So you could either not make money and not have to pay, or you could not make money and have to pay. Which sounds better?
        • by Overzeetop (214511) on Thursday March 08, 2012 @07:31PM (#39295893) Journal

          Actually, it means that if you don't have lots of free time, or prefer not to spend an inordinate amount of time in the game, you can still have a complete, fulfilling experience, leaving some of the drudgery time wasters behind. I means you can do more of the fun stuff with the time you spend.

          • by vux984 (928602)

            , you can still have a complete, fulfilling experience ... by paying not to have to play the game! Hurrah!

            leaving some of the drudgery time wasters behind. I means you can do more of the fun stuff with the time you spend.

            You mean the game has "drudery timewasters" literaly DESIGNED to be drudgery time wasters -- and then it offers you way to pay your way to leaving them behind?

            You just came right out illustrated one of my points for me.

            I mean seriously... how is this not offensive?

            The motivation for game de

        • Maybe I don't want to spend my limited gaming time playing a game where I'm at a disadvantage compared to all of the other players simply because I haven't invested as much time or money as they have? I don't play games to work at them, I play them for the enjoyment.

        • You don't have to look at it as earning money. People pay extra money all the time to give themselves a better leisure experience. If paying money gives you an better experience then it is worth the price.

          I just think it is like golf. Some people will want to buy the most expensive golf clubs and personal trainers because they believe it makes them better. Others are content saving money using their old equipment and grinding it out at the driving range. It is still a game based mostly on skill, so no o

      • by Ihmhi (1206036)

        Or, you can sit in an idle server overnight, Check in the morning and you have your weekly allotment of items.

    • by vux984 (928602)

      If you are lazy, you can pay. If you don't want to pay, you can work a little for it. Sounds good to me!

      Calling people who buy items "lazy" is all well and good.. but:

      Its hard for someone smart not to be sitting there waiting for that rare to random spawn to calculate the number of hours they are spending trying to get X divided over the cost of X in some marketplace... at which point you realize that if you wandered around the city collecting cans you'd have had that item 3 months ago.

      As soon as a game pre

    • by rwv (1636355)

      If you are lazy, you can pay. If you don't want to pay, you can work a little for it. Sounds good to me!

      Sounds like: If you want a challenge, you can play the game. If you just want to get through the game, you can pay.

      It does seem perfectly rational that there are people who get enjoyment from doing it the hard (time consuming) way and other people who get just as much enjoyment out of doing it the easy (expedited) way.

  • by s.petry (762400) on Thursday March 08, 2012 @06:01PM (#39294993)

    We already knew that Linux can be a profit area for business, even though it's "Free". Now we see that same thing working in Gaming.

    It requires some new methodology, and business modelling of course. But it works!

    I'm always glad to see success stories. This a great example. Steam in my opinion has done a great job creating a platform. TF2 plugging in and taking advantage, very smart!

    • They already have a microtransactions store. It's called iTunes.

      • by s.petry (762400)

        Don't try to fool people. iTunes is just a segment of the industry, not the industry as a whole. The industry management (RIAA and MPAA) do not want this model, and fight against it. Hence we had SOPA and PIPA being lobbied for, and lets not forget the constant stream of lawsuits, invalid DCMA take down orders, domain seizures, and other miscellaneous police actions.

  • Don't auction games work this way? You 'win' by being willing to pay more than anybody else. Seems to be a proven model.

  • "Look Dad - this one's free!" appeals to every Dad who just spent hundreds of dollars on stuff they left on the lawn or on the floor of the bathroom.

  • Since Valve *is* stealing their business model....
  • by Qwertie (797303) on Thursday March 08, 2012 @06:13PM (#39295143) Homepage
    Switching to "freemium" now may have increased revenue now. That doesn't necessarily mean it would have been a good idea to release as freemium in the first place. Valve had 4 years to convince people to pay up-front for TF2, and they succeeded quite well! But after four years, you've just about exhausted the supply of people that are willing to pay up-front. Switching to freemium not only brings in new customers, it also convinces some of the original buyers to pay again for in-game items. Now that's smart.

    IMO they struck the right balance, too: TF2 is still fun without paying anything (or in my case, any more than I paid for the Orange Box.) If you had to "pay to win", people might be pretty pissed off.
  • So, is that 12x the revenue at release? Or 12x the revenue compared to when they went free2play which was after the game had been out for years and basically wasn't even for sale anymore? Also... Revenue? What a useless number. How much have PROFITS increased? You now have hundreds of thousands of people playing your game for free... not buying anything at all. Are the few that are paying, actually making up for all that?

    The clear endgame for this situation is to get people to pay as much money as possible
    • Revenue is an accurate indicator of success in the video game business.

      Most of the costs of a video game is during development which is a fixed costs. Once a company makes enough money to cover its fixed costs, most of the additional revenue goes into profits. It doesn't costs that much more to distribute additional copies of a game especially if you are doing it online.

    • So, is that 12x the revenue at release? Or 12x the revenue compared to when they went free2play which was after the game had been out for years and basically wasn't even for sale anymore?

      Actually, it was still in stores, both standalone and as part of The Orange Box. At least they were in Best Buy a year ago (I don't buy that many boxed games any more...).

  • by VGPowerlord (621254) on Thursday March 08, 2012 @06:47PM (#39295487)

    One of the major themes in alternate weapon in TF2 that they aren't necessarily better than the weapons they replace.

    There are two weapons in the entire game that have clear upgrades. Those are the Medic's Bonesaw and the Soldier's Shovel.

    I'll use the Soldier's Rocket Launchers as an example of weapons that are sidegrades. The rocket launchers are:

    Rocket Launcher - 4 Rockets per clip. 20 rockets total. Rockets shoot slowly. Rockets have a good amount of splash area.

    Direct Hit - 4 Rockets per clip. 20 rockets total. Rockets shoot quickly. Rockets do 20% higher damage. Rockets mini-crit airborne enemies. Rockets have 70% smaller splash area.

    Black Box - 3 Rockets per clip. 20 rockets total, rockets shoot slowly. Rrockets have a good amount of splash area. Player gains 15 health per person hit.

    The Liberty Launcher - 3 Rockets per clip. 20 rockets total. Rockets shoot quickly. Rockets have a good amount of splash area.

    The Original - Identical to Rocket Launcher, but fires from the center instead of from the right.

    Cow Mangler 5000 - 5 Rockets per clip. Unlimited ammo. Slower reload time. Rockets shoot slowly. Rockets have a good amount of splash area. Can not do critical hits. When your clip is full, right-click to shoot a charge shot (takes 3 seconds to fire, during which you move at 1/4 speed) which does mini-crits and sets enemies in its splash range on fire... but uses the entire clip of 5 rockets. All shots do 80% less damage versus buildings, but a charged shot disables buildings for 4 seconds.

  • by Kaenneth (82978) on Thursday March 08, 2012 @08:14PM (#39296269) Homepage Journal

    Since the subject came up, I'm going to mention that EverQuest is going to launch their Free-to-Play program in about a week. (the original, EQ2 has been F2P for a while now) info is at http://www.everquest.com/free/ [everquest.com] (also a new fresh server starting.)

    I don't work for Sony, I just like (and play) EQ. In fact I work for a competitor.

    I'm not a fan of the F2P model, I plan to keep my regular sub; but an MMO needs fresh blood to stay healthy, and I'm hoping this will boost the userbase.

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