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A debate on free-to-play

By on May 16, 2012
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This post takes a special format: Cliff Harris of Positech Games and I exchange views on free-to-play gaming, and then share the conversation with you. Let me know if you think the format works, and don’t forget to join the conversation below!


Cliff Harris, Positech Games
Nicholas,

FreeToPlay is not the future of games, or at least I hope it isn’t. The entire business model is built upon cynicism, mainly the idea that players will think they can play game A for free, as opposed to game B which costs $30. We both know that someone, somewhere has to pay for the game’s development, and for that idea to work out, you either need to hook some ‘whales’ who pay out a fortune and subsidise everyone else, or you have to constantly nag all of the players to pay for in-game items.

Either way, the business model will lead to design compromises that do not exist in any other artistic medium. A writer or movie director can compose a piece of entertainment safe in the knowledge that the customer has bought into the idea of the entire work. Imagine the impact if the audience were asked every chapter or scene to pay a few pennies to access the next part of the story.

We wouldn’t tolerate free-plus-microtransactions in other media, why should we tolerate it in gaming? Free to play is nothing more than the new version of a very old idea, the free demo. The difference is that with a free demo, the understanding is you then make an honest pitch for the player to purchase the game at the end of the demo. The F2P model seems to rely on interrupting the player mid-game to constantly pester them for a few pennies.

How is this a better business model?


Nicholas Lovell, GAMESbrief

Cliff,

You start by making the mistake of thinking that all users love your work equally.

The idea that all users should pay the same price for a piece of entertainment, however little or much they enjoy it, is a bizarre concept born out of the limitations of physical media. In the old days, when there were no bits and distribution was exclusively by atoms, content creators had no choice but to fix the price. It was the only way to sell an entertainment product via retail stores. The consequence was that a superfan who loved that game would get hours of incredibly cheap value. A user who found after a few hours of play that it wasn’t for them was, in effect, subsidising the heavy players.

Free to play changes all of that. It lowers barriers to entry, which means people can play and enjoy the game while they work out if they want to spend money on it. It enables people to play the game for ever, for free. As long as the player is playing, the creator has the chance to say “hey, you’re enjoying my game. Here are ways that you could enjoy it for more, by spending some money with me.”

It’s more honest (because it allows players spend according to their level of engagement with the game), it is cheaper (because you build a title for continued play, you don’t have to spend all of the development and marketing budget prior to launch) and it is more profitable (because you let those who don’t want to pay play for free, while allowing those who love the title to spend much more than the initial price).

What’s not to like?

PRESS SPACE TO TAKE YOUR TURN


Cliff Harris, Positech Games

Nicholas,

I accept people are prepared to pay different prices for games, but this is why we have collectors editions and DLC. I don’t accept that we are just being shackled by the physical properties of the medium, because that also applies to books and movies. They capture the whole audience by having hardback or signed copies, and DVD specials with extras.

This is all fine. I have no problem with extra content being made available after a product is complete. The difference is that you are advocating designing the game around such a business model from the start, which I think makes for an inferior product. Books may come as hardback/paperback, but you don’t have to pay extra to get all the characters, that would be mad, yet it’s how F2P games are being designed.

The other problem is that the game is no longer a shared experience or level playing field. I can now be shot by someone with a gun I didn’t buy, or outrun by a car with engines I haven’t bought. Games are about fantasy and adventure and getting away from the rat-race and treadmill of real life. Is it not bad enough that MMOs feel like a second job, without importing all the envy and unfair competition from the real world too? Real world games would never allow this. Football teams don’t get more players if their team has more money, we accept that when it comes to games, it should be about skill, not bank balances. And as for barriers to entry, there are already none when the game has a free demo.


Nicholas Lovell, GAMESbrief

Dear Cliff

I think that we are coming at this issue from two different directions. I care about players, but I also care about the businesses that make games. After all, if it is hard or impossible to make a living from making games, fewer talented people will make fewer great games.

So I start from the premise that if the market is being changed by digital distribution and the immutable economic law that if the costs of making another copy of something trends towards zero, so does the amount that people will pay for that copy. In that environment, I think it will be very hard to keep the price that an end user will pay for a gamer at anything above very low (meaning iOS style prices). It is very hard to make a living at a price point of £0.69 for all but the very lucky. Even Rovio, often shown as the posterchild of iOS development, needed commitment and luck: Angry Birds was their 52nd game.

You’ve argued that you need to gross £100,000 (I think) to make a living. That means selling 145,000 copies of the game if the price is £0.69. You would need to sell 20,000 copies at £4.99.

There is another way. What if you can find a business model that allows people who love your game to spend more? If you design the game to allow those people who love what you do to spend a day’s wages over the course of a year of playing? In the UK, a day’s wages is £100. That would mean you would only need to have 1,000 players who loved what you do to make enough money to live on.

Isn’t that easier and more attractive than trying to appeal to everyone in the same way?

How would that business model work? You make the game entirely available for free, so that people can play, explore and experiment in your world. You offer a way for people to spend £1. They may be able to buy aesthetic changes like personalised outfits, new skins or new buildings that don’t affect gameplay. They may be able to level up faster, unlock items earlier than someone who plays the standard mode. They may even buy additional content (although in my mind, it is better to sell personalisation than content).

Then you need to make it *possible* to spend £100 per month. Not because people will (although some might), but because you want your biggest fans to have choice – about the personalisation, the status, the progress, whatever it is that excites them – and if they are *able* to spend £100 a month, maybe they’ll spend £10.

A thousand true fans, out of perhaps 100,000 playing your free game, and you have an exciting business that is all about making cool new stuff that your biggest fans will love – and want to pay for.

That seems to me to be the best of all possible worlds.


Cliff Harris, Positech games

“Ah but here is the fundamental contradiction. You suggest that because stuff can be copied, it’s natural price is zero, but then you also talk extensively about ways to get money from people for games by other means.

Ultimately, it’s just a shuffling of payment from all gamers equally to a few wealthy ones, but the same amount of money is being generated. The ‘free to play’ games are clearly nothing of the sort, they are more like ‘patronage’ games, where some wealthy people who suffer from gaming addiction subsidise everyone else’s leisure time. An interesting way to do it, but not something that is being done in the interests of making games better. If your business strategy relies on milking a core group of hardcore wealthy addicts, then it means games get designed effectively for a small hardcore subset.

Besides, the popular ‘thousand true fans’ model doesn’t require micro-transactions and free-to-play, they are unrelated.

You can have your thousand true fans who buy the game, without requiring them to be a subset of 100,000 casual players who value their playing time at zero.

I could just about get by with a thousand true fans by selling them $30 games, and many people do exactly this, like spiderweb software and the guys making hex-based WW2 strategy games. There are many people out there happy to pay $20-40 for a game that they really like. It’s a myth that gamers will only pay $0.99 for a game, it’s just that those gamers are a very loud, shouty minority.

You can have your thousand true fans who buy the game, without requiring them to be a subset of 100,000 casual players who value their playing time at zero.”


Nicholas Lovell, GAMESbrief

Dear Cliff,

Of course you can get by with 1,000 true fans paying $30 for your games. The difficulty is in finding them.

Free-to-play games suffer from this discoverability problem too: they need to spend to acquire customers in the same way that traditional games companies have to market their games. The difference is that, because their games are free, they can get many more people into the game to discover if they enjoy it. They can play the game for longer – often forever – before the paywall comes slamming down. They can get their friends playing without having to persuade them to shell out $30. And when they find a true fan, they can make a lot more than $30, while offering things that the true fan values.

There will still be companies making money from games that are single upfront payments for quite some time. Most of them will have established reputations, while new businesses are more likely to start by assuming the free is the optimum price point for consumers AND for the company.

The important thing is that a wider variety of good games will have a chance to get developed than ever got developed before. I think that is something that we can both agree is a very good thing.

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