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[Gamesbriefers] How can Sony make the PS4 great for free-to-play games?

By on March 4, 2013

Question:

PS4Naughty Dog has just announced that Uncharted 3 multiplayer will be free-to-play on PlayStation Network. Sony has not yet announced how it will be handling F2P on PS4, but it is showing signs of being open to the idea.

What is on your wishlist for Sony to do to make PS4 a great platform for free-to-play game designers and businesses?


Answers:

Ben Cousins1Ben Cousins Head of European Game Studios at DeNA

– Highlight F2P games on the digital storefront, don’t push them below paywall games
– Smooth out the payment flow as much as possible
– Provide high quality analytics or an API to the commerce backend for developers
– Have the official Sony customer support treat F2P customers the same as paywall ones
– Allow developers to add title updates and patches very quickly (under a week) and for free
– Create a full system for launching and managing betas, encourage it
– Have relaxed policies regarding what content can and cannot be live updated to titles on the platform without an official patch or title update
– Push PSN store cards hard at retailers
– Actively seek top F2P developers and IPs


ben boardBen Board Senior Product Lead at Boss Alien

Brilliant list. +1 on everything there.

Plus: add lots of ways for players to tell each other how much fun they’re having and to go download the game. Facebook links that trigger instant downloads on your console, for a start, but ideally a beefed-up messaging system in the platform that lets players see and tell each other what they’re playing. A decent reviews/ratings/searching system players can use to find the good stuff would also help if there’s going to be a lot of these games on the service. Uncharted might be high profile but for smaller fry to succeed they’ll need viral channels for discoverability.

Also Sony will likely have a bunch of policies and platform cert requirements unfamiliar to FB/mobile devs (or at least at another level compared to iOS). That stuff makes players’ console experience as smooth and consistent as it is, but it could be a culture shock for those devs meeting those rules – and for Sony, who’ll be making those rules up as they go and might take a few attempts and months to get it right.


Oscar ClarkOscar Clark Evangelist at Applifier

Sony have a lot in place already to enable F2P games and the PSN store is actually pretty flexible… its just not a great user journey.

From my PS Home days I know that its possible to do flexible payments including ‘per use’ consumables, time period licence, and a totally open approach to bundling of goods.

However there were at least some quirks. For example, you couldn’t buy a non-consumable item twice and when all the units/time had been used for a consumable there was no longer a record that you had owned it.

For Social Play, the Facebook API needs better integration with PSN Friends and updated so it doesn’t spam non-PSN friends on Facebook.

We all know that the user-journey for payment flow needs streamlining. However, this is a double-edged sword as Sony have to be seen to being fair on parents/card holders. I spent a lot of time in discussion over whether there should be a PSN virtual currency or not. In the end, despite my pro-virtual currency stand, I decided that it wasn’t necessary. The wallet actually handles a lot of the necessary functions inherently. However, I do feel that having some consistent virtual currency for freemium games and an allowance given automatically to subscribers would really help F2P games.

Additionally all goods had to be pre-setup by the PSN store team and thay process can take a little while – the PSN team are a great bunch but there are only so many of them.

The issues I’ve mentioned above aren’t show stoppers, but they require some creativity to work around. If these could be smoothed out alongside the smoothing of the Consumer payment flow that would be a great help.

Sony have learnt a lot about Freemium on Console through PS Home, I just hope they put some of that experience into PS4.

Following a side conversation with Nicholas it is worth adding that although Sony has some very flexible tools in the infrastructure, even with PlayStation Home they have some unusual constraints in what they allow to be done in practice (some of which I am probably partly to blame).  For example you can’t sell the same premium currency that you calao give away.  But you can sell Blue Premium Currency and give away Green Premium currency worth the same in gameplay.  In this way its usually possible to find a creative compromise, but it won’t be easy if you want to do something which is not already live.


PatrickO'Luanaigh2Patrick O’Luanaigh Founder of nDreams

I totally agree with Ben’s points (both Bens) but would like to add two more.

1) Sony need to allow developers complete flexibility on pricing and make it easy for developers to automatically adjust pricing and hold sales in the same way that Apple do. Currently this is a lengthy manual process with different rules for different regions.

2) Currently the biggest Sony region, SCEA, pay non-US developers quarterly. Given the delays within their payment process, this can result in money being paid by a player on October 1st not arriving at the developer until March 1st the following year. This hurts small studios much more than big studios – particularly if they have funded the game themselves, where cashflow is much tighter. At an absolute minimum, they need to pay everyone globally in the month following the sales if they want to be indie friendly.

I should add that I think Sony are already significant way beyond Microsoft in terms of their flexibility to indies, digital publishers, free-to-play and cross platform. Microsoft are archaic in that regard and need to change this urgently IMHO.


ben boardBen Board Senior Product Lead at Boss Alien

This conversation will likely apply equally to NeXbox if it allows F2P as a model, and MS are definitely further behind. It’s an option on Win8 and Windows Phone, and that learning will apply to console, so it’s not totally unexplored; but there are a lot of questions around even the top-line requirements of Cert, IAPs, discoverability, virality etc – and that’s before the more detailed level of practical gotchas that Patrick outlines.

MS is set up to work with big publishers on big games, and it does that extremely well. Putting processes and pipelines in place for smaller studios and high frequency throughput of small titles, while keeping the big publishing model, will be a real learning experience for them – and the developers relying on them.


harry holmwoodHarry Holmwood CEO of Marvelous AQL Europe

I broadly agree with everyone’s comments so far, but thought it worth pointing out the biggest difference (today) in Sony/Microsoft and Apple’s business models.

Sony/Microsoft, historically at least, have made a loss on hardware, with a view to making a lot of money from each user on software. It worked well because there were big margins on software, which cost pennies to replicate (if not develop) and sold for tens of dollars. Keeping a closed distribution system (including retail and manufacture in that closed loop) kept prices high, and margins strong in the absence of any alternative.

Apple sells desirable, premium-priced hardware, making a massive margin on it. It’s the opposite model. The App Store and iTunes are an important part of that business because they make the Apple devices so much more desirable. But Apple makes a tiny amount of revenue from those services, relative to its hardware business. By opening up the pricing and distribution, the resulting price war ($5…99c…free) and content glut created a great environment for Apple, and for those developers with the right products at the right time. That the phones are heavily subsidised by network operators successfully allows customers to ignore just how much they’re really spending to own the device. People still like to think ‘free on £30 a month’ means free, despite the fact you can pay £5 a month for similar service. [editorial note: see also Why Apple doesn’t care about the App store]

Both models are perfectly valid. Microsoft became all powerful with DOS and Windows, while IBM became yet another computer manufacturer when the former opened up their software platform, allowing any hardware manufacturer to build a PC. The hardware became commoditised, and operating systems (and later Office applications) became the place to make money. The cheaper the hardware became, the harder it became for the hardware vendors, but the more money Microsoft made.

Google have made Android free, so arguably the hardware and operating system are commoditised – because they want access to users for advertising.

But the challenge now for Sony/Microsoft is how to reconcile the two business models – hardware cheap enough to sell in big numbers (which PS3, and 3DO before it weren’t), with software that people can make money on. It’s very easy for us to pontificate about how Sony should open up pricing completely, and that there’s more money to be made on a free Call of Duty than a paid one. But that’s a tough call to make. The incredible success of the most successful mobile game – Puzzle and Dragons ($2m per day at last report!) – doesn’t come close to the $1bn made by Call of Duty: Black Ops 2 in 15 days, although I’m sure a F2P title will eclipse it one day soon [editorial note: subsequent emails not included here clarified that the $1bn figure is revenue only, and profits minus costs and royalties would be much lower]. The console companies don’t (yet) have a ‘must have’ service subscription model like the mobile phone companies do, so they still need to rely on retail to get their hardware into people’s hands. If retail sees no money to be made on software, they’re going to want to make money on the hardware, which could push the pricing too high. It’s a difficult balancing act.

Personally, I would like to see the consoles get to a much cheaper pricepoint. If they stay at current prices, it’s hard to see more than 40 million units of either being sold this generation, without major moves into emerging markets, which I think looks unlikely. 40 million units is great, but if we’re operating on the basis of, say, 10% of F2P users ever becoming paying users, that’s potentially only 4m paying users (8m across two consoles). Even if those 8M generate an ARPU of $1000 per year, that’s only $8bn in revenue, a big drop from where the console business is right now.

So, my suspicion is that console companies are still not going to be viewing F2P as an opportunity, but as a necessary evil in today’s market. They’ll want to try to maintain as much of the premium business as possible, while making F2P available in order to try to maintain market share. They don’t want F2P to drive down their ARPU, because, right now, 100% of their users are paying.

What would I like to see:

  • Cheaper consoles – ideally built into every TV and licensed to every manufacturer
  • Games I can play on any device – I don’t want to buy into Sony or Microsoft’s ecosystem. I’m not buying a Vita just because I buy a PS4. The electronics companies have to learn that they have to fit into the consumer’s ecosystem, not the other way around. Once users get into this way of thinking any other approach seems archaic. I now save all my work to a Google drive, which syncs to various PCs and Macs at home and work. It means I can work anywhere, on the most up to date files, without thinking about devices, syncing, or downloading. This level of convenience will be completely expected by gamers in the very near future.
  • Ultra-easy payment systems for users
  • Complete freedom of pricing, per territory, item etc for developers
  • Easy and instant updates and systems to help iterate quickly – this is possibly a big ask, as they won’t want to be damaging their brand by having buggy products available. A completely open store pretty much means a given app can get only minutes of testing, whereas console companies will dedicate many man days to each title.
  • An excellent means of searching, reviewing, discovering apps through my own preferences, third party reviews and social graph

Ben Cousins1Ben Cousins Head of European Game Studios at DeNA

I agree with the assessment of Sony and Microsoft’s position. I consider it a ‘trap’. They have two options this generation.

1. Console hardware that is powerful enough to eclipse mobile for the entire generation, sold at a loss for years, & with the risk of hardware failures. this means they need to focus on premium software in a world that increasingly expects things to be free. A direct repetition of last generation, in effect.

2. Less powerful, more generic console hardware which is sellable at a profit – giving them more flexibility re: business model. Sadly this opens them up for mobile getting parity with them on specs even sooner.

Both companies are stuck between a rock and a hard place. PS4 seems to be going for option 2 and I hear rumblings MS will do the same. It’s high-stakes poker, that’s for sure…

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