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The Death of Free-To-Play
by Benjamin Quintero on 06/27/12 12:18:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.


[reprinted from my blog...]

In the spirit of the many public predictions for the future of video games, I've decided to make a prediction of my own.  In 10 years, free-to-play (F2P) games will be about where they are today.

Don't get me wrong, there is going to be a massive bubble of insanely high quality F2P games to breach the global market in the near future.  My argument is that the market will not survive it.  Let's break down the F2P model at a high level and see exactly where and why large profits are being made from them.

  1. F2P games today are mostly games built around lower development risks with the potential for a viral level of monitization.  Budgets for these games are not generally the $30M - $100M that we see every day in the high production consoles games.  Most of these games are close to or less than $10M at best.  These kinds of budgets will have an impact on the amount of content that can be released as well as the kind of experience that can be had.
  2. There are not many F2P games on the market today, not compared to the numbers that we will see in the next 5 years.  It's easy to see where a gold rush could saturate the market.  Coupled with high risk, high production development, we could stand to see major players losing big and falling back to the fixed price sales that have worked for the past 30 years.
  3. F2P relies heavily on "whales" because the casual purchase is not enough to sustain the game.  Whales spend over $1k a year on some "free" games but they are in short supply compared to the population of people who refuse to pay.  What happens when the market is saturated with F2P games?  The whales may distribute their funds or choose to focus on a single game, allowing other F2P games to die on the vine.  Though 40% of F2P gamers are willing to shell out a couple dollars, it's the whales that keep the doors open and the servers running.  The other 60% of gamers are a market of people who might choose not to play games at all, or prefer to pay a fix price for the complete experience.

How many high profile face plants will it take before investors are pulling their portfolios?  There is large potential in that market, but the risk may be too high and may fall into the same sequel tropes we are already starting to see with publishers like Activision in the console space.  F2P might be the gold rush that iOS was a few years ago, but I hardly consider it a threat to completely obliterate the dedicating game experience.

The F2P business model would not fit the mold of games like Journey or The Last of Us.  No one wants to pay $3.99 for a consumable that gives longer stamina in Shadow of the Colossus.  No one wants to pay $0.99 for each brick that Ellie throws in Last of Us or $1.99 for longer flight in Journey.  These kinds of monitization strategies destroy narrative and put the focus on the use of consumables to achieve an easier win.  They remind us that we are playing a game and evade any hope of drawing us into the fiction.

Pay-to-Win will always be an argument against F2P, and the day that these games are no longer pay-to-win is the day that we will see the whales disappearing and the business model collapsing.  If players can invest a typical amount of time into a free game; 6-10 hours, and experience it without paying, they wont pay.  On the flip side, as long as the friction exists to ask people to pay for the better experience, there will always be people who close that game and move on to the next free game.

I'd define "death" in the same manor that perhaps Ben Cousins defined the death of consoles; this idea that the market still exists but has been reduced to a point of no return.  F2P games will retract in 10 years from the bubble that we are about to experience.  From the ashes, there will be a small collection of victorious developers who likely had strong backing from major publishers.  The rest will have spent a lot of money and failed hard, closing doors for potentially some well known names in the business who thought they could be one of those winners.  I don't think that F2P will be forever gone in 10 years, but it won't be what some imagine it to be; the end all solution that prints money.  That market will be more of what we see today, lots of people playing for free with a handful of whales dropping between $200 - $10k on a free game.  Overall the user base will grow as the awareness of free games becomes a global event, but it won't be enough to sustain the influx of businesses trying to capitalize on them.

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Michael Kelley
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I'd hoped we were already in a bubble. The sooner it pops, the better. But there's another outcome that should be far more frightening for most; that the indie game dev scene mirrors the indie music scene in which people release games just to hear themselves programming and a lot of good games (bands) get drowned out in the noise. With free engines such as Unity and free art assets floating around, the entry barrier to making your own game is becoming much the same as releasing an indie label album.

Michael Stevens
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There's a lot of interesting stuff to chew on in there, thanks.

"Pay-to-Win will always be an argument against F2P, and the day that these games are no longer pay-to-win is the day that we will see the whales disappearing and the business model collapsing. "
I'm not sure this is true for all designs. I expect it applies best to games where the main draw is the mechanical gameplay and not the social component. A lot of the F2P games I've encountered are entirely combat-centric, so the only meaningful way to spend money is on things that aid combat. A broader design would invite broader monetization.

I'm not a huge fan of F2P games, but I think there are still a lot of models out there yet to be explored (or matched with the playstyle they belong with)

Benjamin Quintero
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I agree, there is probably a way to make (some) money using a truly free model. It raises the question if those models that are scrapping by on good faith (and not exploitation) can survive when there are 1000 F2P games with 20 more rising up each year from large and small teams. We are already seeing this to the Nth degree on iOS and it's pretty clear that only the top 10-25 seem to be the survivors. That's a lot of collateral damage.

Dragos Inoan
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I'm sorry, but you are terribly off the mark in your article regarding Pay to win. Can you give any logical explanation to back your arguments ? If not, I'll throw 2 titles at you that are not pay to win and do just great: League of Legends and Team Fortress 2.
It's true that Free to play came in bulk from the Asian market, where the society is caste driven and pay to win is accepted, however the fact that most of the western developers adopted just shows how much of a bad solution is for the western society which keeps equality and fairness in high regard.

Benjamin Quintero
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One might argue that Team Fortress made their money WAY before they were F2P and they converted over to prolong the revenue, but development costs were already paid back in spades by that point. I don't know how much they've made in microtransactions but I'd be curious to hear Valve say that they've grossed more using the F2P model than their original fixed price model.

As for League of Legends, I'll be honest I haven't played that game. But I'm sure anyone else who has played could probably speak to it's achilles heel as well.

True F2P may work for some games, but play-to-win so far has been the most profitable; maybe with LoL being the one exception out of the many.

Ole Berg Leren
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In League Of Legends, the things you can buy are generally cosmetic, champions and convenience items like experience speed-ups. The xp speed-ups might be seen as a "pay to win" feature, but it doesn't take long to reach level 30 (which is the cap), and all the mastery points needed to fill out the trees (think WoW-talents, just weaker) you want.

Champions are a bit different, as they give you entirely new playable characters with different (some arguably better) skill-sets. The counter-argument is that all the champions are on a free, weekly rotation, and are purchasable through Influence Points (in-game acquired resource).

There are also runes, which are stat-enhancing (increased crit%, critdmg, movespeed), but if I remember correctly, you can only buy them with Influence Points.

In conclusion, I think LoL is an exception, as you put it :)

And to see how much TF2 has earned on being F2P vs Fixed-Price would be interesting. Someone should ask their new economist to produce a diagram.

Raja Bala
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Add Dota2 to that list.
Now, Valve and Riot games have invested heavily in making these games. These are PC/Mac games as well, not for the mobile/tablet segment. They also have a huge 'hardcore gamer' community playing them, which is not the case with many P2W games or Farmville-ish ones.

A lot of the 'true gamers' understand what a big step it is for Valve to make Dota2 free. I'm one of them, and don't mind spending 20-30$ buying cosmetic items in the game that has given me so much fun!

Comparing them with a mobile/tablet P2W game that a lesser known studio releases doesn't seem fair.

Jeremy Reaban
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The thing is, if games are exceptions, then how are they being profitable?

If people only spend $25 or so over the lifetime of the game, how are they making money?

It's not a case of F2P being magically profitable. All the extra cash (over regular pricing) has to come from somewhere.

Part of it is that people just don't admit they spent money on the games. And part of it is that you spend more on games than you think.

The first F2P game I played, at the end of the year going over my finances, I realized I had spend $300 on it. It was just so gradual, I never really noticed. "Oh, I'll just buy this. And that." It adds up.

Benjamin Quintero
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@Jeremy - knowing what you know now, would you drop another $300 on the next free game? That's the thing. How many whales are there and how many will there be when the patterns of F2P become commonplace and easier to identify. The F2P is very much about exploitation of human greed; be it large or small, it's in us all. Some people might be perfectly happy to spend $300 every year. Others might look at that and question if that was money that could have been better spent elsewhere. Was that game worth $300 to you; I wouldn't imagine any intangible product is worth that much if you can barely remember what you spent it on.

Ting Chow
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@ Ole Berg Leren: I think one thing I want to point out, should a customer choose to pay cash for champions, by doing so they are gaining an immediate advantage: the advantage of choice. True, eventually champions become free for a week, but a player choosing to play strictly for free only gets to use ~10 champions (and this number increases very slowly over time), some of which may or may not have good synergy with the other champions on the player's team, whereas a player that has been paying for champions all along probably doesn't have this problem (or is at least using a champion of his/her preference so he/she is well practiced with that champion).

I admit, this isn't exactly a big deal for most players, but for me it is enough of difference that makes me wary of LoL. Will DotA2 work that way, or will all the heroes be available out of the box?

Luis Blondet
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"The F2P business model would not fit the mold of games like Journey or The Last of Us. No one wants to pay $3.99 for a consumable that gives longer stamina in Shadow of the Colossus. No one wants to pay $0.99 for each brick that Ellie throws in Last of Us or $1.99 for longer flight in Journey. These kinds of monitization strategies destroy narrative and put the focus on the use of consumables to achieve an easier win. They remind us that we are playing a game and evade any hope of drawing us into the fiction."

F2P does not work in games that have strong narratives, but it does work well in some competitive games and works very well in vanity games and by that i mean games that allow you to play that "keep up with the Jone's" mentality.

Jason Carter
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Agreed. League of Legends works exceptionally well at this because it is a purely competitive game. For LoL, I have no problem chucking a few dollars here and there for a cool skin to set me apart from other players, yet when it comes to a solid MMO, I want to avoid most free MMOs like the plague. They simply don't have the funding to make it great. Now Guild Wars 2 (while not F2P, but subscription free) seems to be an exception to this but we shall see in the long run.

But I think people are rushing too quickly to a F2P model. Most gamers want a great product and will pay for it if it looks good or has a good reputation.

Heck I bought D3 and I played it for like 5 hours total. That darn hype.

Christopher Plummer
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Totally disagree. Free to Play is here to stay because it minimizes the hurdles needed to connect a would-be player to the game. Most of us were introduced to our favorite games via a free-to-play experience (e.g. playing a game at a friends house or borrowing one from them). I see this movement as a way to support that natural route and a necessity to keep the industry growing.

Used properly it can provide freedom for developers to rely more on great content and less on content that would make a great trailer to compel people to buy the game. I believe that the World of Warcraft and Starcraft II starter versions are examples of what we'll continue to see more of. Demos that are now connected to the retail product and can be extended by different payment options. These will allow way more people to try the 100 million dollar investments we make and support dealing with the range of commitment levels that exist in the customer base.

Carlo Delallana
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Not sure if your analogy is correct.

"Most of us were introduced to our favorite games via a free-to-play experience (e.g. playing a game at a friends house or borrowing one from them)."

The game experience didn't change when i played at a friends house (free) and when i decided to purchase said game. Its the same game, my enjoyment of it is not tied to weather i paid for it or not. My decision to purchase is likely due to a satisfying experience with what you call the "F2P" experience of trying it at a buddies house.

The experience of a F2P game is different for a paying customer vs. a non-paying customer. From hats as a form of self-expression to a weapon that deals more damage than others. It can be innocuous to devious, the experience is deliberately designed to be different.

Jason Carter
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I think this is the reason free trial periods work, but I think this argument falls short of the whole pure F2P vs Pay2P argument.

Christopher Plummer
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@Carlo I think the most known 'freemium' games have really shallow extended content. That doesn't mean they have to stay that way.

World of Warcraft is free from level 1-20. You can get more powerful weapons and gear buy buying the game; you'll get even more by buying Burning Crusade; you'll get even more by buying Wrath of the Lich King; and then finally (I think) buy Cataclysm.

Sauli Lehtinen
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I don't wish for it's death, but evolution. I hope that in couple of years free to play games aren't pay to win, but pay for variation.

Purchable unit types in strategy game, new classes in rpg and new weapons in first person shooter can all be designed to be fair in a way that doesn't destroy the game balance. Like very very small expansion packs that don't give unfair benefit, but ability to use different tactics.

The fact that many people wouldn't pay could even be used to benefit the gaming experience - war only needs few generals, but huge amount of infantry :)

Karl E
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Benjamin's view of things may well be correct. However, the sad fact is that no matter how correct it is, it won't be used as the basis for actual business decision making.

Game companies cannot base their business decisions on how certain developments will affect the industry over a longer period of time. They have to do what makes sense at this moment for each project, based on the information they have at hand. This information currently says "F2P may increase revenue."

Thibault Coupart
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There might be a "trend effect" about F2P, but the conclusion that will emerge can already be predicted :

- Every gameplay does not fit with every business model / platforms, Every business models don't fit with every audience (cf P2Win Diablo III model = according to the last numbers of frequentation, hardcore gamers don't look to be very happy with game flow broken at act II and a must pay to win), and finally every audience does not fit with every gameplay (but this one is common knowledge now).

The real big lack in this article is that it tries to analyze a business model trend while disconnecting it from the design factors of a game and the audience targeted factor.

Fredrik Liliegren
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Another point is that to view free-to-play as marketing spend to reach the few that will pay you. So you additional server costs etc for the free players is simply that marketing cost. In our new game its very clear that if you enjoy this game and you dont want to wait to get what we offer for free (everything is available for free) there is an easy way, open your wallet and pay us. But you do not have to to move forward or to win. This makes the Free to Play just that. We don't really need 500,000 users every month to do well we simply need 5,000 paying users every month. But if there was no way to play our game for free, we would have a MUCH harder time finding those 5,000 paying users.

William Volk
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Depends on the model.

1. Virtual currency. Works well in play for fun casino games and 'grind' games. See the highest grossing chart on the app store.

2. Consumption model. Pay for content. We see over 14% participation (% of downloads making in-app purchases) for our daily word puzzle game, Crickler.

Lewis Pulsipher
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I have never spent a cent on F2P games, both because I despise "pay to win" (or "free to die") and because I haven't the gambling instinct/vulnerability that is another major way these games make money. (Another is when the audience, generally not hard core, is willing to pay for cosmetic stuff. Not me.)

Yet I cannot see free play going away, because once people get accustomed to doing something, like playing, for free, they tend to become reluctant to pay to do it (through the traditional retail market). It is the Age of the Internet, of people who believe that everything online is free, and happily pirate to make sure it's free. What saves the retail market (for now) is that it's also the Age of Instant Gratification, and many people can't wait to get a used, borrowed, or pirated copy of a game and instead spend the money for it when it comes out.