The Catch in the Free-to-Play Model

Proponents of the free-to-play, cash shop, and micropayments financed philosophy of online games like to point out what they see as a key flaw with the subscription model:  Subscriptions set a cap on how much money your customers will give you.

You’re stuck.  You only asked for $15 a month, so that is all you got.

Now the conservative accounting guy in me can see the benefits of a steady revenue stream.

Subscriptions x $15 = monthly gross revenue.

That is nice and predictable.  Your business plan revolves around getting and keeping subscribers, which is at least a concept you can get most people’s heads around.

Still, I see the point of another approach.  In the free-to-play model, not everybody is going to pay but, as the joke goes, you make it up in volume.

So instead of 100,000 subscribers chipping in $15 a month for a top line of $1.5 million you just get a lot more subscribers and have some percentage of them pay $15 or more.

Of course, that is the fuzzy “step 2” in the process, the details between the idea and profit.

You have to make a game with enough free content to be viable so that you can build that subscriber base from which you will generate your revenue.  Only a certain percentage of your user base will ever give you any money however, so having free content that brings people and keeps them is a plus.

Okay, that sounds a lot like getting and keeping subscribers.  But you have the word “free” to play with, which is a big plus in the getting department.

So if you want to make that same $1.5 million a month and believe that 10% of your user base will spend, on average, $30 a month on your game, then you need a total user base of 500,000.

And I pulled those numbers straight out of my backside just to demonstrate the equation.  I am certainly no expert on the subject of what percentage of players pay how much in any given game.

On the other hand, I would be extremely skeptical of any model that assumed more than, say, 20% of customers buying in unless your game is balanced such that players are at a severe disadvantage if they do not pay.  And if you did that, you’d be killing off a chunk of the subscriber base that is there for the “free” aspect of the game.  So there is something of a tightrope to walk.

Being somebody who has moaned in the past about there being a lack of subscription options, I have been somewhat interested in free-to-play games.  Certainly I was a lot more likely to play Dungeons and Dragons Online or Runes of Magic under that model.  And the fact that neither game has really stuck with me isn’t really an indictment of those games.  I’m just having enough fun elsewhere at the moment that I don’t need a new game regardless of the subscription model.

The whole free-to-play thing came to my mind the other day when I read an article over at Ars Technica about Battlefield Heroes.

Battlefield Heroes is a free-to-play online shooter that I have been poking my nose into off and on for the last few months.  I own most of the Battlefield series of games, but I haven’t really been into shooters since I was playing Desert Combat, a Battlefield 1942 mod, some years back.

While I bought the next couple of installments in the series, I never played any of them as much as I played DC, so I lost the desire to spend any more money on their games.

So along comes Battlefield Heroes, which is free to play.  I like to play a shooter now and again and this looked good, so I signed up.  Customer acquisition win for DICE and their parent EA.

However, since I only play a couple of times a month, I have no real desire to be competitive in the game.  I play, I shoot people, I die, I have fun.  Customer retention win for DICE and EA and fun for me.

What I don’t do is spend any money.  Not so good for DICE and EA.

And according to that article at Ars Technica, I am hardly alone in not spending any money.

So DICE and EA changed up the game.

Previously, or so it was claimed, you couple be a competitive player by earning enough victory points through moderate play to buy the upgrades you needed to keep up with those laying down cash.  Never having aspired to be anything beyond a moving target most evenings, I’ll take their word for it.

Now, however, you must play a lot more to earn enough victory points to keep up with the neighbors who pay, something seen as a bit contrary to the intended spirit of the game, as illustrated by this EA trailer.

And the community is up in arms about it… or at least the part of the community that wasn’t paying any money and that gives a damn about being competitive.  And while I point out my own lack on that front, I will admit that when I move from target to constant lead receptacle I will often call it a night and do something else.

The Ars Technica article comes to a dark conclusion at the end with the line:

…this update has a very real chance of ending the game.

Maybe over statement, maybe not.  I’m not invested enough to have a good feel.  But as I said above, I think if you try to squeeze to hard, you’ll reduce the player base without necessarily increasing revenue overall.

And the fact that this is coming up makes me wonder where that line is when it comes to cash shop financed MMOs.

Sure, the player base is probably a bit different, and there are certainly some cheap shots you can take at the stereotypical FPS player, not all of which are totally inaccurate.

And the play style is different.  A shooter puts you in direct competition at all times with people who maybe be spending more money than you, while in a PvE MMO at least, direct competition is somewhat limited.  The guy with the store bought mount and sword of might can go on his merry way and not wreck your evening unless he really sets his mind to it.

So far, in the free-to-play MMOs I have visited, I have not seen a huge push to make people feel they need to buy.  Usually what I see are incentives, special deals, and other come-ons to make item shop purchases look more attractive.  But who knows how long that will be the case?  What happens when a game don’t make goals for a couple of months and the CFO is calling to tighten up the business model?

What happens when it becomes imperative for the company to make the players buy more stuff?

Can you push the cash shop free-to-play formula too far in the direction of “must pay to realistically play?”  Or does the MMO model… or at least the PvE fantasy MMORPG model… protect us from that to a certain extent as long as you have a tank, a healer, some DPS, and a monster against which to throw them?