Why isn't Ford attracting more customers by giving out cars for free and then charging for additional stuff later? And if that model wouldn't work for cars, why would it work for computer games? The answer is in what an economist calls the marginal cost of an item, which is the cost of producing and selling one more of it. Once your game is finished and you have a distribution platform and everything, the marginal cost of selling one more copy is pretty close to zero. The same isn't true for cars, because even when the car is designed and the factory is built and set up, it still costs thousands of dollars to produce one more car and sell it.

The "culture of free" on the internet is very much linked to that zero marginal cost. Even piracy depends on zero marginal cost, because it doesn't cost the pirate more to make a copy of a game or other content than it costs the developer / owner of that game or content. Free2Play wouldn't work without zero marginal cost. But a lot of people confuse zero marginal cost with zero cost. It does not cost nothing to produce content, because it always costs time, and that time has an opportunity cost. However there are people on the internet who voluntarily produce content for nothing, me included. And that leads to an interesting economical question: What is the difference in quality between free content and paid-for content?

There are two sides of that: People who produce content for nothing are by definition "amateurs", which comes from the Latin word for love, they do something for the love of it, without payment. It can be argued that in certain cases such a work of love can be superior in quality to content produced by "professionals", who only do it for the money. In an environment of zero marginal cost a "professional" might be tempted to steal or rip off successful content from somebody else and sell it to you, like for example many cloned mobile games. On the other hand, if you car had a problem with its brakes, would you prefer a professional garage to fix it, or would you go to somebody who has a sign on his yard "amateur repairing cars for free for the fun of it"? Without financial incentive, an amateur might not be willing to invest too much time and money into a creation. Thus there is a viable economic theory that some very high level content will only be created in the first place if the developer thinks he can make money out of his creation. You can make Flappy Bird for free, but not Destiny, Battlefield, Bloodborne, or Grand Theft Auto.

Last week Valve announced a scheme which would allow people making mods to sell those mods on Steam. Most people reacted very badly to the idea, because they believe that they will have to pay to get the exactly same mods that previously were free. And of course the freeloaders made an immediate appearance, trying to sell mods based on the free work of others. But what about the long run? Isn't it likely that at some point a mod will be made *because* the modder was confident in his ability to sell it, a work he wouldn't have undertaken for free? Up to now very few mods end up being better than the original game. But with a mod economy in the future we might very well see a lot more high quality mods.

What I find curious about game economics is that there appears to be a large population that is always defending the status quo, even if that status quo is contradictory. Thus among the people complaining most loudly that mods are best if they remain free we also find the same people who previously argued that games are better if they are not for free.