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Is F2P the natural fit for Virtual Reality?

By on January 18, 2016

This is a post by GAMESbrief’s Rob Fahey, co-author (with Nicholas Lovell) of The F2P Toolbox and Design Rules For Free-To-Play Games. You can also read more of his work every week on

2016 is going to be the Year of VR. It might not be the year VR succeeds, necessarily, but it will absolutely be the year in which some of the industry’s biggest players (notably Sony, Valve and Facebook) make big, expensive efforts to push the VR headsets they’ve been teasing for the past 18 months or more into the hands of consumers. A dream of science fiction enthusiasts and gamers for decades, VR ought to deliver the most immersive and “real” experience of a fictional world ever created – and as credible headsets get closer and closer to being a real consumer product category, the excitement of those who have dreamed of VR gaming for so many years is almost palpable.

Excitement is wonderful, of course, and there’s not a damned thing wrong with taking a moment to sit back and marvel at the technological progress that has delivered the kind of miniaturised displays, motion tracking chips and 3D hardware required to make high-quality VR headsets a reality. Excitement is also, however, responsible for papering over logical cracks on a regular basis, and it’s not unfair to note that game creators themselves – many of whom are hugely and publicly enthused about the potential of VR – are mostly slap bang in the middle of the demographic most likely to have harboured fantasies regarding VR since a tender age. Their enthusiasm is actually VR’s secret weapon, to some degree; the technology’s status as a gamer pipe-dream gives it something of a free pass, and probably ensures far more and far better early software support than a platform encapsulating a less beloved science fiction ideal might hope to receive.

Excitement is wonderful, but it doesn’t answer – perhaps even obstructs answering – some important questions about where VR is going. Big question number one, for us at least (“The Business of Games” is right up there in the masthead, after all), is this; how is VR going to make its money?

It’s a tougher question than some might imagine, especially in light of the announcement that Oculus is going to be merely breaking even on the Rift headset (despite its slightly eye-watering $600 price point) and is even open to the idea of subsidising the hardware down the line. Since presumably they haven’t been offered an infinite line of credit by parent company Facebook and don’t plan on keeping the lights on by filching Mark Zuckerberg’s gold card when he’s not looking, this implies that Oculus has other approaches in mind for making money from VR. It’s not just Oculus which needs to concern itself with how this new platform makes money, though; it’s everyone developing, or considering developing, on this new frontier.

“We’ll sell monolithic games with an up-front price tag” is a business model, sure, and it’s tempting to think of it as the default setting; for VR, with its high price tag, its sci-fi credentials and its consequent market of well-to-do early adopters, the monolithic “traditional” model makes some sense at the outset, and is likely to be pursued by many game creators. After that, though, everything gets more uncertain. Who will the second wave of VR adopters be? If the devices get some mainstream traction – even enough to push them towards the kind of adoption seen for consoles, if not smartphones or tablets – what will that audience look like? Who is the market, in the long-term, for high fidelity virtual reality headsets? You may think that last question is an easy one, but it’s not; if I’d asked you in the early 2000s who the market for pocketable supercomputers with ultra-high-resolution screens was, I’ll bet that middle-aged women pouring billions of dollars into consumable items for match-3 puzzle games wouldn’t have been on your radar (and if they were, you’re now probably sufficiently wealthy that you’re having this article read to you by your butler while you train to become a brooding vigilante, or something). If VR achieves escape velocity, and that’s a big if, the shape of the space into which it launches is eminently likely to surprise us all.

Beyond audience, we also have to think about usage context. How, when and where are people going to be interacting with their VR headsets? The science fiction response ranges from the utopian (VR as a popular entertainment that fills a similar role to today’s immersive videogames) to the dystopian (VR as an addictive escapism that we jack into ceaselessly at the expense of our health and real-world lives), but they all make the basic assumption that VR is something you engage with for long periods of time; you pop on the helmet and enter another world for hours. Yet what we’ve seen of VR until now has been quite different – perhaps it’s because of the specific needs of showing off hardware at trade shows and press demos, or perhaps due to the limitations of pre-production hardware, but almost everything demonstrated on VR up until now has been a bite-sized experience, not necessarily in terms of the scope of the content but certainly in terms of the amount of time you’re expected to spend with it. Whether this is a hard limitation of the current approach to VR remains to be seen, but it’s easy to imagine that spending hours with a Rift or a Morpheus headset could be uncomfortable at best and nauseating at worst. This is a really important variable that remains undefined; is the context for VR short, immersive experiences, or hours-long play-sessions in virtual worlds?

Audience and context are vital variables because between them they define a lot of the territory that underlies the business model – and the “monolithic game, up-front price tag” business model is just one of several that may end up dominating VR. In the headline, I ask if F2P is a natural fit for VR, and depending on the configuration of the audience and context variables, there are a lot of scenarios in which F2P works perfectly for the platform. If VR finds a mainstream audience, and especially if it turns out to be best used in short bursts (rather than long sessions), then it’s almost certain that F2P will flourish. Even with a core audience, F2P will be an extremely natural fit for VR if the primary play context is short-burst experiences, and doubly so if the platform faces a discovery problem (with lots of software of variable quality appearing, and making consumers wary of paying up-front for experiences that they may not enjoy).

This isn’t to say that the F2P models which might appear on VR platforms will precisely mirror those on smartphones and other devices; the challenges will differ in some places, and thus so will the responses. One area that will be a real challenge for VR F2P is retention – not that this isn’t a major challenge on smartphones as well, but it’s altogether easier to score regular engagement on a device which your users carry in their pockets every day than it will be to convince people to make time in their schedules to slip on a cumbersome headset and immerse themselves in a VR experience regularly. A possible solution is to create software that bridges both of these worlds – available for regular engagement on smartphones, with “deeper dives” in VR possible when the user has the time and willingness – but it’ll be a challenge to turn that into something other than annoying notifications trying to get you to come back to a game you can’t physically engage with right now.

Of course, there will be push-back against VR F2P, just as there was against smartphone F2P – recall that in the early years of smartphone games, premium software you had to pay for up-front was the standard model, and F2P only became ubiquitous as it became clear that the fundamentals of the market demanded something different. VR will likely be the same, with a new business model (F2P or something else entirely) emerging as the shape of the market landscape becomes clear – and the same vocal and outraged critics will emerge as did on smartphones, no doubt. If that truly is a landscape of short-burst engagement, though, it’s almost inconceivable that the “winning” business model will be the traditional “boxed-game” style model. F2P is a strong contender in that instance; other possibilities include a traditional MMORPG style subscription (for virtual worlds, although I think they’ll struggle to convince people of the value proposition of a subscription without the lengthy play sessions associated with most virtual world games) and something more like a cable TV subscription, where you pay for a package of “channels” that deliver regular short-form VR entertainment, not unlike a more complex version of today’s PlayStation Plus. A mixed landscape featuring elements of F2P and elements of subscription is also a possibility – especially if the virtual world possibilities of VR really take off, since players would have strong incentives to pay for cosmetic items to customise their avatars, with the creation of an impressive personal avatar for other players to see being arguably even more compelling in a VR environment than in existing virtual worlds.

For a new device category with so much interest surrounding it from some of the world’s biggest tech companies, VR remains surprisingly shrouded in mystery; we don’t really know which audience it’s aimed at (beyond the obvious early adopters), whether it’s feasible to play for long sessions or only in short bursts, what kind of software is being created for it or how its platform holders plan to make money. Consequent to those other broad realms of our ignorance, we also don’t know what’s going to work as a business model on these new platforms; but it would be foolish to assume that the old “boxed software” style model, already under revision on other platforms, is going to gain a major long-term foothold on such a dynamically different medium as VR.

About Rob Fahey

I’ve been writing about the business of games for 17 years, and have worked on, Eurogamer, VG247 and British newspaper The Times, as well as making appearances on BBC News, CNN, Sky News and others to discuss the industry. I'm the co-author, with Nicholas Lovell, of two of GAMESbrief's books: Design Rules for Free-to-Play Games and The F2P Toolbox. I'm also involved in product development for GAMESbrief - books, Surgeries, Masterclasses and other ways for us to help you make the most from your game and your business.