The Power of Free-To-Play

Slide 1: The Power of Free To Play

Slide 2: Adrian Crook adriancrook@gmail.com www.FreeToPlay.biz

Slide 3: “Free” In the Real World

Slide 4: Free To Poop No cost to public or taxpayers Providers recover costs/profit via ads on exterior

Slide 5: Free To Rock Download only launch Free / Name Your Price 40% conversion $3M revenue Still debuted at #1

Slide 6: Free To Fly Nearly free, 5€ flights across Europe Airline derives revenue from cargo, incidentals, etc

Slide 7: Back to games…

Slide 8: What is Free To Play?  NOT a genre  NOT a platform  Numerous revenue models  Players play without paying  Increased player base allows for alternate monetization

Slide 9: KartRider 160M users world-wide

Slide 10: Runescape $60M annual revenue

Slide 11: Webkinz 7M unique users per month 340% growth in 1 year

Slide 12: Club Penguin Bought by Disney for $700M

Slide 13: All Eyes On Free The Battle for Attention NPD: 91% of kids PC Online gaming = f2p

Slide 14: Current F2P Revenue Models

Slide 15: Virtual Item Sales  Unlimited ARPU – users decide ceiling  Value drivers  Rarity/price  Visibility  Dual currency systems  Attention-based  Real money-based  Basics  5-10% conversion rate  Functional, decorative, consumeable, etc

Slide 16: Merchandise  Barbie Girls  9.5M users in 9 months  Webkinz  $20M retail in 24 months  Maple Story CCG

Slide 17: Information Sale  Food Fight  Surveys for Vcash  Potential  36K users daily  Avg 2 surveys/user  25c per survey  $18K/day  ANNUAL: $6.6M

Slide 18: Other Revenue Models  Advertising  Banners, PPC, Video, Sponsored Items  Auctions/Player Trades  Live Gamer, Entropia, Station Exchange  Subscription Tiers  RuneScape, Club Penguin, DR  Event/Tournament Fees  Shot Online (Golf), Ultimate Baseball  Real Estate/Land Use Fees  SL, Entropia  Affiliate  TrialPay, $uperRewards  Donations  Kingdom of Loathing More on www.freetoplay.biz

Slide 19: Looking Forward…

Slide 20: F2P Design Tips  Respect the free players!  Support integrated graphics  Be browser-based (or small dl)  Offer regional payment systems  Provide short compulsion loops  Defer user sign up

Slide 21: F2P Growth Challenges  Virtual property  Linden v Bragg  Slow broadband  6mbps US vs 45mbps Korea  Rising dev costs  Battlefield Heroes

Slide 22: F2P Growth Challenges  Second Life slowdown  Electric Sheep layoffs; UX issues  Secondary markets  IGE; unsanctioned item sales  Kids-only games  NPD: After 18, kids leave F2P

Slide 23: F2P Trends & Opps  New F2P platforms: social networks, iPhone  $upercash, EA Blueprint  Breaking down the walled garden model  Metaplace, WoW Armory, DR Char AP  NPD top sellers as F2P games  “We’re looking at the sort of game that five, six or seven years ago, they would have been putting in a box and selling on retail shelves. With the new technology, we can deliver this through the browser.” – Mark Faulkner, Jagex

Slide 24: Adrian Crook adriancrook@gmail.com www.FreeToPlay.biz