Tobold's Blog
Wednesday, January 29, 2014
 
Free2Play vs. Subscription - The Data

There is not much more to be said about the relative advantages and disadvantages of the Free2Play business model versus the subscription business model. But one argument that pops up again and again is that of the relative health of the two business models. And often the data provided are anecdotal. So how well is Free2Play really doing in a western market versus subscription? Fortunately there are good data available on the US digital games market:

In 2013 Free2Play games in the US made $2.9 billion, up 45% from $2.0 billion in 2012. Subscription games in the same period made $1.1 billion, down 21% from $1.4 billion. The biggest market share went to mobile games, with $3.1 billion, growing 29%, while social games (Facebook etc.) are down 22% to $1.8 billion. Note that the table includes DLC sales, but not buy-to-own game sales for PC and consoles. PC DLCs made $2.1 billion in 2013, up 11%, so selling games slice by slice definitively seems to be working.

World of Warcraft alone made $213 million in microtransactions, not counting income from subscriptions, while SWTOR made $139 million. Which actually isn't that bad for SWTOR, whatever number you believe the game cost. Of course we don't know what the cost to run the game are, but profit margins tend to be high once you get past a certain threshold of player numbers.

Comments:
I noticed something about that data when mmo-fallout posted it. http://mmofallout.com/free-to-play-drew-2-8-billion-in-2013/

I find it very amusing that the graph of "Free-to-play earnings" features WoW, a game where microtransactions are only of any use on subscription accoints.

You migh also want to question the accuracy of their numbers. They counted 40.6m active ftp gamers in December, while two days ago League of Legends reported that they have over 60m active each month.
 
You migh also want to question the accuracy of their numbers.

Aren't their numbers US only, while League of Legends reports their numbers world-wide?
 
I'm confused, so where are the details on the subscription games behind the numbers? They even talk about LOTRO under the "Pay-to-Play MMO" section while it is considered the granddaddy of F2P MMOs.

So what games are raking in all the money under "subscription" money? It is kind of important to know who these F2P games are up against right? Or is the entire subscription section consisting of WoW alone, hence there not being a chart?
 
Thanks for linking that very informative article. Today I learned that the biggest online game of today is a PC shooter I never heard of called Crossfire. How did I miss this?
 
Today I learned that the biggest online game of today is a PC shooter I never heard of called Crossfire. How did I miss this?

Careful! That list is world wide, not US. CrossFire appears to be an incredibly successful South Korean shooter, which is barely known outside of Asia.
 
When you have DoTA2 listed in your F2P MMO section, your data is a joke.
 
Aren't their numbers US only, while League of Legends reports their numbers world-wide?

Yes they are. I made a mistake and failed to spot it switched from global to US after the first section.

Some amazing numbers in that. $200m to launch a triple-A MMO might not be such a stupid idea.

 
@Tobold - re-read your link. They classify DotA 2 as free to play MMO.
 
DOTA2 and League of Legends qualify as MMOs in the same way that Vindictus online does.

MMO Lobby with instanced limited-size-group content.
 
As far as I can see they talk about the "free-to-play online games category" when they mention Dota. Note that nowhere in my post did I limit my discussion to MMORPGs. So the only thing that is wrong is that somebody shortened the long description of "free-to-play online games category" to Free-to-Play MMO, which is an understandable shortcut which has absolutely nothing to do with the quality of the data.

But then of course that was just a straw man attack, because somebody just didn't like the truth.
 
I don't really understand the obsession with definitions and semantics. What does it matter what the games are labeled as? The link could call them all fishing simulators and the data would still be just as valid.
 
I find the WoW and SW:ToR microtransaction numbers absolutely astonishing. That is an enormous amount of revenue per player - easily an order of magnitude higher than the high end of what I would have guessed was likely.
 
According to the link, these are estimates, not hard numbers (caption of the first table), derived from information provided by "50+" un-named developers (methodology page). Does this list include Riot, Blizzard, EA, SOE, and Turbine, or are those numbers estimated and/or second-hand?
 
"So the only thing that is wrong is that somebody shortened the long description of "free-to-play online games category" to Free-to-Play MMO, which is an understandable shortcut which has absolutely nothing to do with the quality of the data."

Right...

You would think then they would mention the most popular game in the world (LoL) in that section, rather than point out a tiny blip game like PS2.

But yea, clearly solid data that subscription games like LotRO are on the decline (due to a drop in micro-transactions), while F2P MMOs like DoTA2 are moving up (likely due to an increase in... micro-transactions).

Who is the strawman here?
 
But the section in question mentions DOTA2 And PS2 in relation to things that happened in that segment during November 2013 which in the case of LoL was more or less nothing since it was after the end of season 3 but before the first season 4 pre-patch.
 
You can chant "I don't believe the data, I don't believe the data" all day long if that makes you feel better. But to convince anybody that the data aren't right, you would have to provide better data. As far as I know, there aren't any.
 
Sometimes I feel as though everything on the internet should be prefixed with a warning stating that it is unofficial and nothing more than someone's educated (or not in most cases) opinion.

Too many people read financial estimates then treat them as truth or dismiss them as fiction. They just need to be treated with care fro what they are. The closest we'll ever get to knowing the real numbers but not neccessarily entirely true (or false).
 
The data I would like to read on F2P is the payment distribution, or "how many whales and how much they spend". Of course, since this would reveal the total number of *actual* players, I'm not expecting to see it anytime soon.....
 
Of course, since this would reveal the total number of *actual* players, I'm not expecting to see it anytime soon.

Are you saying that somebody who is playing a Free2Play game several hours every day without paying is not an "actual player"?

The number of paying players is actually not that hard to find, because there tends to be information about total revenue and "average revenue per paying user". For example the data linked give US average revenue per paying user as $50. Divide revenue by that and you get the number of paying users.
 
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