Ethics of free to play games

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Ethics of free to play games

  1. 1. Whales, True Fans and the Ethics of Free-to-Play Nicholas Lovell GAMESbrief Develop Liverpool November 24th 2011
  2. 2. Nicholas Lovell, GAMESbrief • Author, How to Publish a Game • Director, GAMESbrief • Clients include Atari, Channel 4, Channelflip, Firefly, IPC, nDream s, Rebellion and Square Enix • @nicholaslovell / @gamesbrief
  3. 3. Subscribe to the blog
  4. 4. Show offer: Get 80% off • Go to www.gamesbrief.com/store • Enter code DEVELOP • Get How to Publish a GAME for 80% off: • Digital: £99 £19.80 • Physical: £149 £29.90 • Both: £149 £29.90
  5. 5. ASK THE AUDIENCE
  6. 6. Q1: Are free-to-play games evil?
  7. 7. Q1: Are free-to-play games evil? Interactive options:  Yes 14%  No 86%
  8. 8. Q2: Is Zynga evil?
  9. 9. Q2: Is Zynga evil? Interactive options:  Yes 46%  No 54%
  10. 10. Q3: Is Tiny Tower evil?
  11. 11. Q3: Is Tiny Tower evil? Interactive options:  Yes 10%  No 30%  What’s Tiny Tower? 60%
  12. 12. Q4: Is the National Lottery evil?
  13. 13. Q4: Is the National Lottery evil? Interactive options:  Yes 35%  No 65%
  14. 14. FREE – IT WORKS
  15. 15. Free has been hugely successful • Zynga: • filed its S-1 • $600m + in revenues • Valuation expected >$10bn • Tiny Tower: • 2 men, four months • Currently #12 in the top grossing chart • Conservative estimate: $3m revenue in first 12 months • (PS: # 1, 3, 4, 5, 6 are free too) • Bigpoint • €200 million in revenue • €650 million valuation
  16. 16. Free is a marketing technique• Free means you have a lower barrier to entry• Free means more people try your game• Free gives you players; players are potential customers• It’s all about the conversion from free users to revenue generating users• If you are not free, you are competing with free • Advertising-funded • Pirated • Free from someone else
  17. 17. WHY DOES FREEWORK?
  18. 18. The price/demand curve • In an era of physicalPRICE distribution, you need to set a single price • For games, around $40 “It’s great value, I’d have paid much more” “That’s too expensive for me” Demand
  19. 19. Now we let users set the price • Hypothesis: Allow users to choose howPRICE much they spend on your product, and your revenues will go up  DDO revenues up 500%  LOTRO and Everquest II showed a similar story $3 $5 $5 $1 $5 $3 $10 MMO $3 $3 $3 $1 $5 subscription Demand
  20. 20. WRONG!
  21. 21. Allowing users to choose how little to payis not the secret • We all knew that 95% of users played forPRICE free • We now know that 80-90% of revenues come from 0.5% of users  Spending $50 - $10,000 or more Demand Paying: 5% Free: 95% 80-90% of revenue from 0.5% of users
  22. 22. Making it pay • The 10th Drone from DarkOrbit • Sells for €1,000 • 2,000 sold • That’s €2 million in revenue • In 4 days!
  23. 23. The Nine Inch Nails Example Ghosts I – IV Ultra Deluxe Edition: $300PRICE Ghosts I – IV Deluxe Edition: $75 Ghosts I – IV physical: $10 Ghosts I – IV digital: $5 Ghosts I: $0 Demand
  24. 24. The rule of 0-1-100• Make it enjoyable for people to play for free for ever• Make it easy for people to spend $1• Make it possible for people to spend $100 per month
  25. 25. An iOS example: Pocket Frogs
  26. 26. An iOS example: Pocket Frogs
  27. 27. ARE FREE / FREEMIUM/ F2P GAMES EVIL?
  28. 28. NO
  29. 29. F2P = evil (or not)• The business model is designed to take money from you • So is the coin-op, or the MMO, or the DLC • Games are a business – we should always remember that• Some people spend lots of money on it • You get lots of content for free • Instead of paying for access, you pay for the experience that you VALUE• They’re not real games • Grow up. • Oh, and the games will grow up too• They don’t have enough skill / fairness / challenge • Well don’t play them then • Just because you don’t like them, doesn’t mean they are evil
  30. 30. Some valid concerns• How much money is it ethical to take from a single player, in a single month?• Are microtransactions appropriate for children?• Are there certain games that aren’t suited to free-to-play • I say no • There may be some players who aren’t suited to microtransactions• Free-to-play games that are just operant conditioning chambers (“Skinner boxes”) are likely to stop working
  31. 31. Beware marshmallow eaters
  32. 32. Whales versus true fans• True fans spend money because of what you do• Whales spend money because of who they are• This is not a perfect distinction• Make high-value content and consumables THAT YOU BELIEVE IN• Hold your head up high
  33. 33. Avoid buyer’s remorse
  34. 34. Conclusion• Free-to-play doesn’t have to be exploitative• Sell things that players value – these don’t have to be expensive to make• Be generous• Seek out true fans, not whales• Make games you can be proud of
  35. 35. Thank you nicholas@gamesbrief.com Follow my blog www.gamesbrief.com Buy my booksDEVELOP (until Friday 11 pm)

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