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Whales, True Fans and the Ethics of Free-to-play games

By on September 22, 2011

The inexorable rise of free-to-play gaming has led to a vast array of criticism of the free-to-play model.

Social, casual, mobile and other free-to-play games have been derided as not being games, as being Skinner boxes, as using operant conditioning to make hollow mockeries of gameplay and as being evil.

The heart of the criticism of freemium games revolves around two issues:

  • Metrics-led design,where game designers build games that deliver to a spreadsheet, rather than aim to delight gamers
  • The exploitation of  whales, where most people play for free, but a few spend a bucketload of money

A recent comment on Twitter from Jurie Horneman has helped me understand the fundamental challenges in free-to-play games, why so many people think it is unethical, and how to reconcile making money in free-to-play with making high-quality, entertaining games.

Whales versus True Fans

Jurrie’s tweet said:

Trufans spend money because of what you do; whales spend money because of who they are

That insight has helped me to separate out the key distinction between the two types of spender.

A True Fan loves what you do. In other media, they are the Arsenal fan who attends every match, home and away. The Rolling Stones fan who has been to a gig on every tour they’ve done for the last twenty years. The Potter fan who has a hardback edition of every book, every movie on DVD, the extra books and a Hogwarts robe.

These are people for whom spending a huge amount of cash on their favourite entertainment brand or experience is value of money. It is about self-expression, or status, or satisfying a collector’s urge, or keeping up with the Joneses, or any number of other emotional or social reasons. The emergence of free-to-play is good for True Fans. They can explore more content, for free, than ever before. They can pick and choose which content, be that games, books, music or whatever, they love and spend lots of money on it, while getting their other content for free. They may even spend less money on content than they did previously, but allocate it more efficiently to the content creators whose work they love.

Do whales all suffer from poor impulse control?

In the famous Stanford Marshmallow experiment from 1972, psychologist Professor Walter Mischel tested the impulse control of a group of four year olds. Each child was put into a room sitting in front of a table. On the table, there was a marshmallow on a plate. The child was told that they could eat the marshmallow if they wanted to. If they waited for twenty minutes before they ate it, they would be rewarded with a second marshmallow.

Mischel then followed the children through school. He found the children with good impulse control (defined as waiting the twenty minutes for the second marshmallow) were “psychologically better adjusted, more dependable persons, and, as high school students, scored significantly greater grades”

(Note the obvious disclaimer for a study such as this that causality and correlation are not the same things.)

Tiny Tower screenshot

Tiny Tower, a highly successful, free-to-play, iOS game is targeted directly at people with poor impulse control. The game is entirely free-to-play, but every action you take -  building a new floor for your skyscraper, stocking the shops with goods to sell, waiting for residents to move in – takes real world time. It is very easy to spend the in-game currency, Tower Bux, to accelerate some of these actions.

At the time of writing, Tiny Tower is the 22nd highest grossing game on the App Store, and shortly after it was released, I wrote a post estimating that Tiny Tower was on track to make $3 million in revenue in its first year.

Its success is, at least partially, down to its ability to offer people the easy route to immediate gratification, something which people with poor impulse control are likely to grab.

Are whales just about poor impulse control?

I don’t want to single out Tiny Tower as an example of an exploitative game. It is a game put together with love and passion by a pair of brothers who clearly care deeply about their game. It is my favourite game on iOS at the moment.

It is not a game about self-expression, though. Its revenue model focuses mainly on people who can’t wait.

Elsewhere, in games from Zynga, for example, this revenue model is taken to a more extreme level. Zynga seems to be using every psychological trick in the book to encourage people to come back, to level up, to spend money and to spam their friends. These are all legitimate game design (and marketing tools).

When they are done cynically, without love, it is to see why the free-to-play detractors attack such games so easily.

The ethics of free-to-play games

I have been struggling with this issue for a long time. On the one hand, I think free-to-play (or freemium) offers content creators an amazing opportunity. For the first time in history, they can share their content, for free, around the world and, using the interactive nature of the Web, use the free content to discover a direct communication channel to their biggest fans. This is an amazing opportunity (and one of the many reasons why established media companies are so scared about the Internet in general and piracy in particular).

On the other hand, it has enabled games to exploit – using techniques honed in cynical marketing companies and the murky world of gambling – those people whose personalities make them easy marks for Skinner boxes and operant conditioning.

This is not a fundamental flaw of freemium. The free-to-play model can be, and often is, an ethical way of sharing high-quality content to the world, and giving your biggest fans something they crave, value and will pay for.

If you are making a game with love and passion (or a book, a single, a TV show) and can find a way to offer high-quality, premium stuff that is really expensive, but valued highly by your audience, you are targeting True Fans. Sleep easy at night.

If your game (or book, single, TV show) is all about psychological tricks, not delighting your fans, you may be very profitable, but you are targeting Whales. Be wary of cynical exploitation: I don’t believe it’s a long term business model.

Are you targeting Whales or True Fans?

  • If your customers suddenly stop, realise how much they have spent, and suffer buyer’s remorse, you’re targeting Whales
  • If they know how much they’ve spent and view it as value for money, you’re targeting True Fans

Freemium business models are not evil. They may prove to be the best thing that ever happened to content creators and True Fans alike (although not to twentieth century media distribution monoliths).

Choosing whether to target whales or true fans is one of the biggest decisions you can make.

Which will you choose?

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • Nick

    Very good stuff.
    I’m myself discussing a lot about that (IOS game soon to be released), and your point is clear.
    True fans are my goal, cause longterm they will come back. whereas Whales wont come back.

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  • http://www.facebook.com/people/Peter-Van-Der-Watt/728685125 Peter Van Der Watt

    http://www.kk.org/thetechnium/archives/2008/03/1000_true_fans.php

    an older but still interesting and pertinent article regarding True Fans…

  • http://twitter.com/playnoevil Steven B. Davis

    I’m not sure that trusting on the instincts of any game developer will distinguish whales from true fans.

    … or if they will want to.

    If you want to stop “whale hunting” – all you have to do is throttle purchases. This does have the potential to reduce chargebacks.

    You could also have a gradually increasing throttle to ensure you don’t have a problem, such as a child playing with a parent’s credit card.

  • David Barnes

    Great article.

    You might have noticed that Mousehunt’s button to buy in game currency is labelled “Donate”. If you can relabel the purchase button with “donate” or “support this game” and see a rise in revenues you know you have true fans: players are looking for a reason to give you money, beyond the rational value of what you’re selling.

  • http://www.icopartners.com/blog Diane Lagrange

    Nice article. This is especially true for the energy and shortcut purchases, which make a lot of the revenue coming from the whales (last study from Papaya Mobile shows the whales buy much more consumables than the average paying user, and amongst consumables, a lot of accelerators) : http://china2valley.com/you-will-fail-without-the-social-whale
    However, another type of whale spender tends to be collector types, is that closer to a true fan behaviour, or just another psychological exploit? Ultimately, it’s difficult to draw a line and decide for people what’s right for them. I’m not sure the people who spend a lot of money on energy and shortcuts end up regretting it, even if that may seem irrational to many.

  • http://twitter.com/mcowpercoles Myles Cowper-Coles

    Great article. If I was to become a developer (which I hope to one day), I would definitely want to focus on the True Fans. While targeting whales might provide you with more money in the short term, I believe developing games for true fans will provide more than just money.

    As a big xbox gamer, I find it very annoying when developers release a game half made, and release the rest via DLC. I think this is fairly similar to model used by games to get money off whales (but obviously not identical). While this will make money for the developers, I doubt games with this sort of business model will get as many true fans compared to games made by companies such as bungie, blizzard or valve. These are companies that are making games for the gamers, and because of the quality, they end up with huge profits.  

    Games like Minecraft also provide a great model in my opinion. Notch, the developer, purposefully release the game early for a reduced price. It has allowed fans to get the game for a discount price and help in the development of the game by providing feedback, as well as being able to experience the slow development of a game. He may not have thought about who he was targeting, but it has definitely developed a true fan base, and he is gaining huge profits from it. This will also mean many of the players will go on and buy his next game and so on. How many other games get to have a convention combined with their launch party?http://minecon.mojang.com/

  • Levi Ritchie

    Lovelle and Horneman both make the assumption that developers and publishers have an omnipotent understanding of why f2p makes money. I think that’s a terribly dangerous assumption to make. Most of the time it’s as simple as “We tried this, it worked, let’s do more of it,” without all of the exploitation analysis and careful psychological manipulation. 

    I don’t doubt that some people try to use something like operant conditioning to get people to play more, but most of the time they’re just making games because that’s what people want. World of Warcraft is constantly accused of psychological manipulation, and it’s accusers love to throw words like “seratonin” and “skinner box” out there like they understand the dev team’s motivations, but they really don’t. 

    WoW didn’t become successful because it manipulates chemicals in the brain any more than every video game ever made became successful for that same reason. Blizzard has a way of finding out what people want and giving it to them. Since the later patches of WotLK, they managed to speed up the leveling processing, enhance social features, cut time it takes to get from event to event, and redo almost every early game zone to make the game feel more cinematic and fun. No part of that lends credit to the theory that WoW is a skinner box. They just find that certain people like playing games like this, and they cater to that demand.

    Who are we to say people who spend money on free to play games aren’t true fans? More importantly, are we supposed to say pulling people with these kinds of personalities out of a casino and into an online community is unethical? Games that exist just as skinner boxes are all over the place, and they always tend to fail. We aren’t talking about a long-term business failure. These things have immediate failure and way more competition from day one.

  • http://www.gamesbrief.com Nicholas Lovell

    Its a fair point, sort of. I think that there are many companies who absolutely run through the psychological stuff (although I agree they often do it by experimentation).

    But the purpose of this post is to get people to start thinking about the ethics. True fans is a more ethical long-term strategy.

  • Ola Holmdahl

    I object to the term ‘True Fans’. It’s semantics 101: Whenever someone calls a thing ‘true’, ‘real’, ‘genuine’ or such you need to be cautious. ‘Fan’ is short for ‘fanatic’, which hardly implies a rational and loving connoisseur in control of their spending of time and  money. The invention and use of the term ‘True Fans’ makes the article biased. If you were to call ‘whales’ something like ‘Real Afficionados’ the article would read like a comedy. Who wants to ‘exploit’ ‘whales’ when you can ‘delight’ ‘True Fans’? Meh. It smacks of cheap rhetorics. I call do-over.

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  • Dave

    I have a Hogwarts robe.

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  • georginafortuna

    Excellent article!

    It is very important to focus on customer service and value for money. While launching our new game  http://apps.facebook.com/roulettetrillionaire/ we intentionally tried to focus on true gamers instead of whales.

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