Tobold's Blog
Thursday, October 28, 2010
One-way street

Have you heard of the Free2Play game that was so successful that after a year they changed to a monthly subscription business model? No? Me neither! While the reverse story, games starting out with monthly subscriptions and changing to Free2Play is becoming increasingly common, that move appears to be a one-way street.

There is a general perception that the "successful" games can get away with a monthly subscription payment plan, while those games that fail to make it into the top tier are forced to switch to Free2Play. Nobody expects World of Warcraft to go Free2Play, or SWTOR to be released as Free2Play game from the start.

But if the business model was only a question of how successful a game is, then how come that the more successful Free2Play games never change to a monthly subscription model? What does that tell us that a switch appears to be possible only in one direction, but not the other? Just two years ago, any mention of microtransactions or Free2Play evoked a big howl in the comment section of this blog, about how that would be the end of MMORPGs. Today the move towards Free2Play appears nearly inevitable. What changed?
To me it seems simple - F2P offers better profits, so why would a company switch back. Especially the model used by lotro and ddo - where you can still subscribe and get almost anything by doing so seems better than plain subscription - you get all the players that want to subscribe, plus all those that only use the micro transactions.
You unveil a very interesting point. In fact, I would go so far as to postulate that MMOs of the future (even near future) will be released with a LOTRO like F2P model. Why not?
Malthan has it right, with the F2P model which gives the subscriber everything PLUS the option of buying xp potions and fluff items from the shop with free points earned from subscribing it is a win/win. This also allows the publisher to keep those on that just want to test the game or see what it is about.

The only issue here is the boxed/download with 30 days playtime option, which has always been a standard with subs driven model. I can see this option being something of the past. To play a new MMO, you download the client and either sub (gets you 30 days playtime) or not: play with limited options.

I think the trend has proven that an evolution of the business model of modern MMOS will go this way.
Heh, Tobold i think you should play some of these F2P games to figure out what happened to the subscription notion.

The most successful F2P games all STILL have subscriptions! I can subscribe to DDO and LOTRO and EQ2 .

Especially DDO it does not take one very long to realise subscribing for 3 months is in fact BETTER [if you know you will play consistently for that long] than remaining F2P .

In fact i'm willing to wager that Turbine has set it up intentionally so that your natural progression will be:

a] Get client for free and play for free
b] If you like it, you will most likely dish out $20 or so to upgrade a few account options
c] If you STILL like it , you will upgrade to subscription and get access to everything.

Now the line between [b] and [c] is not very clear to most average players, so they don't make the connection and end up spending $20-$30 per month [double a subscription] to access various content. They are essentially paying for a "lifetime sub" in monthly installments.

Even in my Guild in DDO, all the players that's been there for a few months are all on subscriptions. Don't be fooled into thinking the hardcore players are actually on F2P.

Looking at Turbine's model, the main thing to note about the F2P-model is OPTIONS and FLEXIBILITY. They never actually removed the subscription model! They just added another model so you don't need to go "cold turkey" on a game because you're only playing once a week.

This is essentially my issue with WoW. I like to play it once in awhile, but sometimes i just want to log in and do one dungeon and not log in for a week while playing Fallout:New Vegas .

A subscription model is actually like the anti-marketing, because once you need a break you are forced to CUT ALL TIES with the game. A F2P model [with a subscription option] you can bounce around between the two options at will as it suits you.. ask you why would anyone opt for a "subscription only model" vs. "f2p model with a subscription option" ?
one factor limiting the migration from F2P to sub model is the cost. You suddenly have to add strong security, a payment infrastructure, people to handle it, and various thefts/scams (means also a legal dpt).

Not to mention if it wasn't thought out from the start, you'd have to redesign your game...

ANd in all honesty, if you game is already succeful as F2P, why would a user pay for anything? :-)
Subscription games that go F2P are not the same as an MMO that is made as F2P.

The difference is in the modeling, don't you think?
One as aspect of F2P I would like to see discussed more is that because F2P is a pay as you go model it gives the player the freedom to play the game at their own pace and in their own way. I think this is a huge change. It makes it far more economically feasible for casual players who want to to dip in and out of games and for players who keep multiple mmorpgs on the go at once. I think this greatly expands the potential market for mmorpgs and is the only way the market can support a wide variety of titles.

Unfortunately this aspect of f2p often gets overlooked because of the focus on the "Free as in beer" aspect of f2p, which of course isn't even true.
Can you imagine the problem of telling millions of customers, who may have invested thousands of hours into their characters, that from now on they need to pay money to be able to play?

Me neither. Of course it a is a one way street.
I think F2P is more profitable in the long run. But the developers first need to get their money back from their investment. That is where box sales and monthly subscriptions come in. Once that income dries up it is time to switch to F2P.

If they would start off as F2P they miss out the initial boom. They would miss out the income from tourists that won't stick around. AOC and WAR made a lot of money the first three months. Imagine they would have started F2P. The initial burst would have still been there, but they would have made $0 of it.

I think when looking into the future companies will remain using box+sub model from the start to rake on the initial burst. Direct F2P games will not get that boost, and thus will remain lower budget at start.
@ Tobold

Nothing has changed. It simply means that gamers are willing to try out things for -free-. What is the difficulty in understanding that?

The howls you refer to come simply from the aspects of the F2P billing model that a LOT of players still have yet to understand, in that a player just simply doesnt know (going in) just exactly what they will be charged for once they get hooked with the F2P bait.

Are you telling me that you honestly expected to be able to buy that uber sword for your character in the F2P game you participated in earlier?

The howls are, and have been rightfully directed at the implementation of the F2P model, not the model itself.

Now, if the implementation failures of a significant number of F2P MMO's continues, then yes, I would say that there might be issues with F2P games, and that gamers should beware and howl all they want.
Here's why:
The player who has poured hundreds of dollars into the game who now needs a subscription of what he already had is cheated. Or the company can offer to apply his previous purchases as credit towards further subscriptions. But in that case they've lost two sources of potential income: his subscription and whatever more money he'd have spent in the shop.

They can't be sure that current free players are going to subscribe. People don't react well when suddenly they have to pay for what they thought of as free. This might apply even to the infrequent content buyers who are using the F2P model to very carefully maximize their value, possibly because they're not getting $15 a month of value from the game.
Its a matter of flexibility, for both the players and the developers.

with a f2p/microtransaction model. players can choose how much they spend on their gaming, and some will spend more than they would on a monthly subscription. Similarly Developers can put a price on every individual bit of content and can track the kind of content that does well more easily. This allows them to direct their efforts into content that people actually want to pay for rather than working on loads of content which no-one ever touches.

The flip side of this is that its a gamble. Developers need to balance the content they charge for very carefully against the content that they give away for free. Too much and they're not making any money, too little and no-one will play their game.

Its also a gamble in that they're relying on some players paying more per month for content than the price of a subscription, and that there are enough of these players to keep them in the money.

Think of it a viagra spam. You send out enough of those emails someone is going to bite. Similarly, you get enough people playing your f2p game, some of them are going to pay for stuff. You just need there to be enough.
But what happened to two main worries people had about Free2Play?

- Fear that developers would deliberately make games tedious so as to better sell items that make the game less tedious.

- Fear that "rich" players would buy themselves huge advantages over "poor" players
I don't know if Lineage 2 in Asia is free but I do know that it is heavily cash shopped. But interestingly, one of the newer, and more successful regions for Lineage 2 is in Russia. So popular in fact that many Europeans are playing on the Russian servers which have several times more subscribers than the standard EU and NA servers combined.

The model used in Russia? Completely free to play the whole game. All races, classes, levels and zones. But, you can upgrade to a premium account which has a monthly fee. All the premium account gives you is double exp and double cash off mobs. Virtually all accounts that are played for more than two months get converted to premium.

I think this is a good example of a game that goes from free to play over to pay per month, at least at the player level. We could also see this as a shift in the payment model at the level of moving into a new region. So looking at it at a company level might not be the only thing that should be considered.

I am also not sure we have seen the whole free to play thing play out yet. Don't forget that there are at least two distinctly different kinds of free to play going on. PWI type free to play where you can play the whole game for free if perhaps leveling slowly or lacking extra bank space. These games are designed from an item level on up to support a cash shop. These games will never change because they really can't, they are designed to be free to play.

The second kind would be like EQ2X (don't know about lotro, haven't played it yet.) where free gets you a limited game. You pay for additional races, classes and levels if you want to. Possibly also eventually paying for downloadable content like new instances or continents. The payed portions could come from 1 off payments as for unlocking a new race or could come from a subscription, as in getting full access to the broker instead of paying per transaction.

In the second case, I think it is at least conceivable for a company to switch back since they are still often offering the subscription as an option. However, it will also depend on what happens with a cash shop. If the cash shops in these games start selling stat items which basically pollute the world's item base, I can't see them ever being able to get the genie back in the bottle. At least for those servers.

Which also brings up what the definition of going to pay to pay would actually be. Would it be enough for a company to simply start offering a pay to play server along side an existing free to play server? Or does it need to abandon the free to play model all together.

In the end. I think we don't see particular servers transitioning from free to play to pay to play because people see it as a purity issue. Once you have free to play elements in an economic system, it will be forever so tainted.
People are cheap. They dont realize what that $15 a month is going towards. If they realized that their money is going towards server maintenence and content they might feel different. A free to play mmo with the same user base as lets say WOW would never be able to compete content wise.
Mandril said: with a f2p/microtransaction model. players can choose how much they spend on their gaming...

Unless of course the design of the game is so contrived that players have no choice as to whether they pay or not, and or how much.
Chris said...Unless of course the design of the game is so contrived that players have no choice as to whether they pay or not, and or how much.

Whatever the model, people will just not play that game.
A game has to be something special now to survive in a subscription based environment. I don't think even wow would be able to release today as a subscription service.

Games released today are not competing against wow, but other games in the f2p market.

Wow was largely as successful as it was by it's early entry in this market and the rts games that preceded it, giving it a good fan base from the word go.

Star Wars seems to be a given that it will succeed, I personally think it will fail due to George Lucas being a failed director killing the series with the recent films (for mammy fans) and the way war hammer and final fantasy have shown big budget mmo's don't always succeed.

another game to have a successful wow subscription type will be a long time in the coming.
Klepsacovic wrote: Whatever the model, people will just not play that game.

You forget that in a F2P environment the client itself is usually free for download, or else the developer would be answering to the FTC for misuse of the word "free". The stats that I've seen indicate that gamers are more willing to download and install something for free even though there is an inherent risk of the F2P implementation being questionable.

The surprises that occur within the F2P model do not occur until -after- the user is "given" the game install/content. At this point the damage could very well have been done with spyware, toolbars...ect. that the gamer just simply did not want. At this point the choice to play or not is irrelevant.
It's because most F2P games suck.

I'll go even further. Name one non-failed sub F2P game that is a joy to play and would be worth the subscription cost. Seriously, name one.

The only reason F2P is on the radar was because of the failed sub games that chose it over folding. The rest are crap, will always be crap, and get ignored by most of the gaming press, hobbling along with enough subs to make a profit due to their relatively low dev costs.

Here's a deal. Don't play DDO, don't play EQ Extended, don't play LOTRO. Now go out and play F2P games. You'll understand then.
I think Malthan's post is spot on; even though (e.g.) Turbine games are "F2P," they're also still available as subscriptions. By offering both options, they ensure that everybody who wants to play their games will have an option that's right for them.

Keeping this in mind, it's not really a question of "switching" to a subscription model (since that's already supported), but whether to *remove* a f2p option.

So... why would one do that? What's the advantage of *not* having F2P, when you already have the systems to support it? I really can't think of a reason at all.
How did we go from
Chris said...Unless of course the design of the game is so contrived that players have no choice as to whether they pay or not, and or how much.
The surprises that occur within the F2P model do not occur until -after- the user is "given" the game install/content. At this point the damage could very well have been done with spyware, toolbars...ect. that the gamer just simply did not want. At this point the choice to play or not is irrelevant.
Are we talking about designing legal games that manipulate players to get more money or are we talking about scams? There seems to have been some sort of sudden shift here.
@ mmomisanthrope

I beg to differ. Guild wars and Lotro are head and shoulders above most mmo's and IMHO above WoW too, in the case of lotro.

Lotro is an incredibly well crafted, immersive and intelligent fantasy mmo. With content patches that put most games to shame.

Wow sucks, a personal opinion, as a subs based game.
I believe he's comparing Lotro to real F2P games, not Lotro to WoW. And on that note, I agree with him.
Klepsacovic wrote: Are we talking about designing legal games that manipulate players to get more money or are we talking about scams?

The design of any game that has embraced the F2P concept has been such that it relies on either manipulating the player through the games design to make money, or puts software on the players computer to make ads appear, or what have you, in an effort to generate revenue. Some even do both, but both IMHO rely on the questionable ethics surrounding the implementation.

The market itself has created this gray area of what is permissable within the F2P model of revenue generation - and what it boils down to is nothing more than the questionable ethics that surround the model itself.

Which in the end poses the bigger question: If you dont pay for something, does the company have any legal contract with you by which they can be held liable for any problems that arise such as account/identity theft, server down time, major bugs that cause data loss..ect?
Even if they wanted to go back to subscriber based system i don't think they can. ppl would literary go ballistic over it. Even if free to play doesn't actually mean that ppl CAN still get by soso without spending any money, but every one does, and probably alot more then they would of it were sub only. But they read "free" and their brains disconnects. So converting (back) to subscriptions doesn't compute for most ppl that it will actually be cheaper for them.
@mmomisanthrope - League of Legends is a F2P game that I would have no problems paying a subscription for.

I really like the option sub f2p model - it let's me play a game slowly at the begging without having to worry that my 14 day trial will run out, and then subscribe if I really like the game. Plus I can drop my subscription and still enjoy stuff like holiday events or just a quick few hours of play.
@Tobold said:
"What happened to ...

- Fear that developers would deliberately make games tedious so as to better sell items that make the game less tedious.

As someone who voiced that fear a lot in the past I think that market forces have combined to make it less likely to happen. At this stage there are several very good f2p games available that are not tedious. Any game that tries this will lose customers fast.

The Allods debacle was a salutory lesson for any game developer who tries to design content specifically to force players to spend more money in the shop. I am sorry that it happened to what appeared to be an otherwise well designed game but it was probably an important lesson for the industry as a whole and I am sure it looms large in the memory of any new company thinking of going free to play.
good point mbp.

I think the f2p model, truely free to play where you are otherwise not limited in what characters, races, zones or levels you can play need to limit the item shop to convenience items and appearance stuff. Mounts, exp potions, maybe bigger bags and at the very most for gear, only leveling gear. No endgame.

After all, there needs to be an actual game in their somewhere and a money spending contest doesn't make for much of a game.
F2P changing to P2P would lose customers. This, in turn, could cause a cascade of people leaving the game since the community shrinks and more importantly, your circle of friends will likely become compressed.

OTOH, P2P switching to F2P can only gain new players who are willing to try it out for "free," and decide to keep playing, some even paying. There's essentially no risk as the level of backlash will be low, especially in a game like EQ2 which segregates the subs from the freebies.

Then, we can compare the games themselves. MMOs starting off as F2P tend to have more problems: bugs that don't get fixed, perhaps cheats that run rampant or GM corruption. I've heard about or experienced this in several (asian) F2P MMOs.
Common sense renders F2P into a lower financial tier than subscriptions, wich in 2010 is total bogus. Turn WoW into F2P today and you will see an overall rise in revenue. Why's that? There's that rare treat. The non-teenage player. The one with losts of disposable income, the ones that dump thousands of dollars into Facebook games. The very same ones are within the WoW community but right now they are limited to spend money by the game itself. If those borders break down by going F2P you will see people spending huge amounts of money into single games.

Games will have single customers, that are worth hundreds of subscriptions worth by todays standards. F2P when done right, leads to increased revenues and why would you go back to lower ones? That's why we don't see the other way around. Think sparking pony in WoW but times 100. WoW would be perfect for this, cause there's no superior alternative the hardcore could escape to. The only thing holding Blizzard back yet? Their last straw of dignity. It's just a matter of time though...look at what Valve did to TF2. You can actually buy better items for pretty high prices now. I'm convinced we will serious RMT in WoW within the duration of the Cataclysm expansion. It's free money and lots of it. Think class changes, think buyable high level characters, think mid-tier loot. 100 justicar points for 10 bugs. We're very close to that.
I think the biggest change has been them getting away from the dirty word "microtransactions". Now they say "free to play". Everyone likes the word "free".

The other side of that is if a game goes from F2P to a subscription model people preceive it as not having a choice in how much they spend anymore, even though they probably spend more in the "free" version.
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