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[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.
- 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.
- 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.
- 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.