Ethics of free to play gamesPresentation Transcript
Whales, True Fans and the Ethics of Free-to-Play Nicholas Lovell GAMESbrief Develop Liverpool November 24th 2011
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
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ASK THE AUDIENCE
Q1: Are free-to-play games evil?
Q1: Are free-to-play games evil? Interactive options: Yes 14% No 86%
Q2: Is Zynga evil?
Q2: Is Zynga evil? Interactive options: Yes 46% No 54%
Q3: Is Tiny Tower evil?
Q3: Is Tiny Tower evil? Interactive options: Yes 10% No 30% What’s Tiny Tower? 60%
Q4: Is the National Lottery evil?
Q4: Is the National Lottery evil? Interactive options: Yes 35% No 65%
FREE – IT WORKS
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
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
WHY DOES FREEWORK?
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
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
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
Making it pay • The 10th Drone from DarkOrbit • Sells for €1,000 • 2,000 sold • That’s €2 million in revenue • In 4 days!
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
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
An iOS example: Pocket Frogs
An iOS example: Pocket Frogs
ARE FREE / FREEMIUM/ F2P GAMES EVIL?
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
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
Beware marshmallow eaters
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
Avoid buyer’s remorse
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
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