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If people are buying your 'premium' iOS game, why try free-to-play?
If people are buying your 'premium' iOS game, why try free-to-play?
August 14, 2012 | By Cassandra Khaw

August 14, 2012 | By Cassandra Khaw
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    26 comments
More: Smartphone/Tablet, Business/Marketing, GDC Europe



While Germany-based FishLabs Entertainment's 3D space trading and combat simulation franchise Galaxy on Fire has done incredibly well as a premium title (in general, the Galaxy on Fire games retail at $6.99 and above) on the Apple App Store, the company is pushing into the free-to-play market with their upcoming Android release.

Why the change? Today at GDC Europe, FishLabs Entertainment's CEO and co-founder Michael Schade explained that it was because they were concerned that they were "giving away some potential." As such, a decision was made to take a closer look at the free-to-play market and in-game monetization.

There were definite challenges to this decision. One was convincing themselves that such a change was a good idea. "Myself and a lot of the team members are C64, PC and console players. We're slightly old-school; we pay for a game and that's it. We're used to that."

"It feels kind of weird to have to pay to progress faster in your game," Schade observed.

However, this slowly began to change after he found himself making in-game purchases on Lord of the Ring Online in order to keep up with his friends. Though he had purchased both the core game and a lifetime subscription, he was still investing money into the MMORPG -- a fact that helped cement his acceptance that in-app payments may well be the next step for the company.

Schade also touched on triple-A titles on the Apple App Store that have made effective usage of the free-to-play model and in-app purchases., such as Chair's Infinity Blade and NaturalMotion's CSR Racing.

"You can say what you want about the way [NaturalMotion] is monetizing the game but that's the result. The game looks awesome. They have 350, 000 reviews on App Store." Schade noted.

"So, who are we to say that F2P is not okay?"

Gamasutra is in Cologne, Germany this week covering GDC Europe. For more GDC Europe coverage, visit our official event page. (UBM TechWeb is parent to both Gamasutra and GDC events.)


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Comments


Adam Danielski
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I am pretty sure any company with the ambition to make money understands that F2P is the future of gaming. Any company that disagrees better have an Angry Birds or similar game that will sell into the millions. There are lots of players that will pay for an advantage.

If you look at any company and what type of positions they are hiring for they are moving outside the traditional hires and looking for economists, psychologists, and people who specialize in the best way to convert the free gamer to a paying gamer.

For years EA has been crying about the price of games and how it has not changed for 30 years. The tides are turning now. EA found that gamers will pay $50.00 and then turn around and buy content on day 1 to add to the game.

This is the new business model for companies looking to make money outside of crowdfunding.

k s
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If money is all one cares about then they should stay the hell away from any creative medium. Look at hollywood they make films with the express intent to make lots of profit but they are creatively bankrupt but the film industry outside of hollywood is teeming with creative people who are less concerned with profit. Why should the games industry go the hollywood route?

Nuttachai Tipprasert
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"Any company that disagrees better have an Angry Birds or similar game that will sell into the millions"

You knows what? That's exactly what we need for our industry right now. We need to make good games to make money, not that crappy games that monetize by using psychological tricks. I'm working in the social game company myself and after one year of struggling, our company already started to realize that the only thing that can sell our games is "good game design". So, F2P or not, you cannot make money from psychologists or economist alone.

Zynga is the very good example. Look at how low they're sinking right now. And you think that they don't have any good psychologist and economist on board? I think not.

Lance McKee
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"I am pretty sure any company with the ambition to make money understands that F2P is the future of gaming"

I think any company with an ambition to make as much profit as possible right now would think that F2P is the future of gaming. I think a company like Nintendo, which has been going strong for almost 40 years now and is the most successful company in the industry, would argue that the model might be a bit short-sighted.

Matt Robb
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'"It feels kind of weird to have to pay to progress faster in your game," Schade observed.'

Of course it feels weird. It should feel especially weird for a game designer. You're supposed to progress faster based on your skill at the game, not on how much money you shell out. F2P models involving paying just to progress faster violate the concept of a fair playing field. Plenty of other ways to monetize a F2P game exist.

It's just my opinion, but catering to the people that will pay money to beat other people at games is not good for the art, even if it's profitable for the industry.

Kellam Templeton-Smith
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It's frankly obnoxious to the players-before if you wanted to rob yourself of the satisfaction of progression (or even just got stuck in something), a lot of games had fairly robust console commands/cheat codes. Now, you pay for something similar.

Lance McKee
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Sounds like great logic to me. I'm sure everyone has just as much fun throwing away their money to play through a game they've already purchased as the CEO of a successful company does. I know I find myself thinking, "Man, as soon as I pay down these student loans and hospital debts I'm TOTALLY going to play one of those games where I can pay money over and over!!"

Here's a fun multiplayer game I like to play with my kids: we each put a dollar in the toilet and then flush to see whose dollar gets down the drain first. Somehow we all keep losing though - I can't quite figure it out.

Matt Walker
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The toilet remark - brilliant. Love it.

Lance McKee
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Thanks!

Doug Poston
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@Lance: It might not be your thing (and I don't like it either), but I live in a city built on the fact that lots-and-lots of people enjoy paying over-and-over to play a game (Las Vegas). ;)

I don't think we should stop making 'traditional' games, but you shouldn't underestimate the F2P market.

Lance McKee
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@Doug: Although I think there's a big difference between the games in Vegas and the F2P video games, there does seem to be a big market out there for F2P games like you say.

The reason it isn't "my thing" though is that I feel like we're taking this industry that provided us with some amazing entertainment and derailing it to chase after a get-rich-quick scheme that exploits people's shortcomings. We're shifting the focus away from providing quality entertainment that people can get excited about to simply providing tools that will hopefully encourage enough customers to throw their money away in our direction.

Maybe you're right though about comparing it to games in Vegas. Maybe F2P is the future of gaming, and when most of the Country realizes what a bad idea it was we'll all have to travel to one or two specific states to be able to play a video game.

Doug Poston
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@Lance: Good points, but I think the industry is large enough now that even if all the 'big boys' go chasing sleazy get-rich schemes, there will still be many great games by smaller developers and those who choose to create 'honest' entertainment.

Lance McKee
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@Doug: I actually agree with you completely on that. I just hope we're right!

Mike Lopez
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The Freemium benefits and logic are sound.

But Infinity Blade and IB II are not Freemium games. They are Premium games with in-app purchases. Chair/Epic have the weight to get massive distribution (thanks in large part to placement in all Apple ads), but anyone who needs large scale distribution best go full Freemium.

Lance McKee
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"The Freemium benefits and logic are sound."

For most software I would agree that the concept works well. It's nice that I can work on a little game for my kids at home with a free version of a game engine, but then use a premium version of that engine paid for by my company to develop a commercial title that makes use of more advanced features, etc.

I don't think it would work as well for something like a novel, where I could get the cover for free but would have to pay $1 each time I wanted to read another chapter. Or a song that was free for the first 5 seconds but each additional 5 second chunk would cost $0.50 to listen to. Are we trying to develop games to be more like utilities than entertainment?

Mike Lopez
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While there are episodic novellas you seem to assume that all Freemiums prevent progress and that is not the case. That is one method of monetization. It is easier to get people to pay for convenience or time savings. Balance gameplay so the grind is layered in after a couple sessions and keeps getting progressively longer. Players will happily grind through (replays or losses) when they are short but eventually will either give up or be encouraged to spend when they hit their own personal time limit.

Other forms of Freemium (and Premium added) monetization are avatar or experience customization, content collection, competitive purchases (pay to catch up to your friend). There are others.

What if your novel example was free but allowed you to experience it in a new way for $3 more per option (maybe the colors signaled the moods of the characters, or there were animated backgrounds, turned off chapter end ads or something else)? The distribution would be 100x and some of the 3-5% of payers would want to buy all the options so you would not cap them at the regular book stand price.

Also you may want to provide new features/content as a service so always update it in the direction of your fanbase so you know you are investing in the right things.

Lance McKee
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My concern is that this seems to negatively affect the feel of the games and therefore might cause more long-term damage to the industry. While some of these concepts do have benefits, and the model overall is apparently very profitable, is it worth it? If shifting everything to this model means trading a group of X people who are passionate about games for a group of 100X people who are mildly interested in games, will that group still be interested ten or twenty years from now? (Please keep in mind these are just things I've been worrying about as a gamer/developer - I have no marketing experience and am probably way off on a bunch of stuff here!)

The idea of episodic novellas still consists of paying for a novella and then enjoying it from beginning to end without interruption - allowing you to immerse yourself in the story if that's what you want to do. If your freemium novel example became a reality, my prediction would be that it would lead to some spikes in profit, but people like my wife who consistently purchases novels on a regular basis and has done so her whole life would lose interest and stop purchasing them. Then when the people who caused the profit spikes got bored with these shiny new toys, they'd move on too and nobody would be left purchasing novels.

Bruno Patatas
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"It feels kind of weird to have to pay to progress faster in your game," Schade observed.

It's not weird. It's one of the cancers of modern game design. It boggles my mind why people would spend money skipping objectives and obstacles, basically skipping fun.

So, the answer for the title "If people are buying your 'premium' iOS game, why try free-to-play? " is... greed.

Troy Walker
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I must be "old school", but F2P is like opening up a movie theatre with free movies and showing only the first two minutes then charging every other 5 minutes to continue watching...

don't we find that model in nasty porn video stores?

Ryan Christensen
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If you are really old school you might see the parallels between arcade (popping quarters) and mobile (popping .99 tokens). I feel mobile is actually a slight return to arcade type progression in that getting farther is paid for because a game has to be fun enough to keep getting quarters. Or nowadays good freemium design makes that fun game experience more fun or longer lasting with more content, cool customizations and more of my favorite games. I can also keep devs employed longer on titles after launch if they have a virtual good life in their design.

The movie theater analogy is only good if you are talking about a bad freemium design. A good freemium design would be you get the whole movie for free but you can buy better headphones, drinks/popcorn, a nicer seat to play in, an awesome hat and maybe a better overall experience or one that is more tailored to your time. The movie is the same experience for all, the payer is just more red carpet. I also think this reflects more service/on demand type entertainment we are moving to.

Hakim Boukellif
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In arcades you're merely paying for the right to play the game. Yes, you can continue from where you last died if you insert a coin, but the game doesn't actually become easier; chances are you'll be seeing that Game Over screen again soon afterwards (at a decreasing interval the more you Continue), because you just don't have the skills to progress. In the end, the only way to beat the game is to get good at it, which is why all the smart kids realised that it's better not to Continue at all and just start over when you die.
Anyway, the arcade model isn't something you'd want at home, so any comparisons made with it don't justify anything.

"A good freemium design would be you get the whole movie for free but you can buy better headphones, drinks/popcorn, a nicer seat to play in, an awesome hat and maybe a better overall experience or one that is more tailored to your time."

The problem arises when the regular seats are adequately comfortable, only a few people are going to pay extra for a nicer seat. If the theatre has to earn all of its income through selling extras like that, it has incentive to make the regular seats less comfortable or have non-paying customers sit on the stairs or something.

"I also think this reflects more service/on demand type entertainment we are moving to."

It remains to be seen whether that direction is a good one. From my perspective, creating external dependencies where there used to be none is a step backwards, not forwards.

Mike Lopez
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There are a range of successful Freemium games that do not hard gate progression, from Cityville casual to League of Legends multiplayer.

What is "old school" (I say as a 21 year industry vet) is expecting that all your consumers are hard core enough to want to play 8-12 hours of gameplay, or that they are willing to take a $60 bet on if the game will be fun enough beyond the demo level. That ship has sailed, my friends, in case you did not get the NPD memos the past few years (and are not working on Call of Duty).

The retail market has been disrupted by digital distribution and mobile apps and they are getting better visually and more sophisticated every day. Join the trend and ride the wave of stratospheric growth in Freemium mobile, pray for a miracle opportunity to work on one of the very few top AAA games that have a chance to survive Premium Retail in the mid term, or go down with the ship when the next, next gen consoles fail to capture the living rooms of past like the latest handhelds are now floundering.

Best of luck to the non-believers.

Mike Jenkins
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Ryan, I don't think your metaphor works. If it did, paying in a freemium game would get me a better computer to play on, a better sound system, food to eat while I play, and a nicer computer chair. Of course, none of these things are true.

Paying in freemium affects nothing but the game itself. The game is the entertainment, the movie is the entertainment.

I think your metaphor would work better if you used things like: you watch the same movie, but you get better actors; you have the same action scenes, but the special effects in your movie look much better; you can skip parts of the movie you don't like.

Lance McKee
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"...expecting that all your consumers are hard core enough to want to play 8-12 hours of gameplay, or that they are willing to take a $60 bet on if the game will be fun enough beyond the demo level."

I agree with that statement, but I don't see how that confirms the F2P model as being a good solution. As a long time fan of games I love spending hours and hours playing through a Castlevania game I purchased for $20. Meanwhile, my wife loves playing Bejeweled 3 on the XBox 360 in smaller (maybe 30 min.) chunks. I think that cost us about $15. We also enjoy playing some Donkey Kong Country together which is one of the rare cases that we are willing to spend as high as $50.

We are willing to spend the time and money on those titles because we can rely on those games and their developers to deliver a valuable experience. Apparently we aren't alone, considering the companies behind those games still seem to be doing fine.

"...like the latest handhelds are now floundering."

From what I've read the 3DS seems to be doing great. Are the claims that current handhelds are "floundering" coming from comparisons with mobile phones?

Diana Hsu
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Yes, of course the reason is profit. All else being equal, games will make more money with freemium. If you want to make your own game without micro-transactions and other FTP monetization elements, you should absolutely do it -- there is a place for such games, just as there's a place for artists who refuse to sell out and make commercially optimized art. Some of them are able to make the big time, and I think that's awesome. But the purpose of every for-profit business is, well, profit. Why would you be surprised that a business wants to maximize their profit, within the limit of the law?

Christopher Engler
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Has anyone considered the F2P model an extension of old arcade monetization? Many players don't enjoy paying $60 up front for a game, but when there's competition, they can be nickeled and dimed beyond $60 pretty quick (or quartered to follow the analogy). Those of us who grew up in arcades know this too well. Skill was often over-shadowed by a guy who'd plop $5 worth of quarters just to prove they could get a little farther in the game than their competitor did.


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