Monday, June 17, 2013

A Disconnect on F2P

First off, check out this article by Klepsacovic. Money quote:

Sell a man a fish and you feed him for a day; offer a man a free fish and an inexpensive fishing class and he'll get really pissed off and starve to death instead.  Because he's stupid.
Brilliantly encapsulates a lot of the forum chatter about F2P.

I often think there is a disconnect between how players think F2P works, and how companies think F2P works. You can tell what a company thinks about F2P not by what they say, but by what they offer for sale.

Let's say that we have a subscription game. The earnings might look like:
  • 100 subs * $15/sub = $1500
Now, let's take a F2P game. Judging by the forum rhetoric, players believe that the revenue works like:
  • 300 players * $5/player = $1500
But if you look at what most game companies actually sell, it's pretty clear that they believe their revenue looks like:
  • 25 paying players * $60/player = $1500
They sell some small items, but most of the store is targeted to people who are willing to spend a lot of money.

This is the real advantage of F2P. Rather than trying to scrounge up more subscribers, they remove the limit on how much the former subscribers can pay them. It's easier to chase a few whales than thousands of small fish.

For example, F2P in The Old Republic has roughly doubled revenues. However, I would wager that the majority of the increase in revenue comes from existing subscribers, and not the new players. That is why TOR focuses on Cartel Packs, because subscribers are willing to buy them.

But a lot of F2P players have not come to terms with this, and the forums often break into complaints that item X is too expensive. But the truth is that even if it was cheaper, most players wouldn't buy it.

16 comments:

Xintia said...

Excellent observation, and I think a quick look at RIFT's F2P conversion proves this. Trion is basically selling everything but the kitchen sink in their store, the understanding being that the people who support their game will be more than willing to spend far more than $15 a month to show that support. F2P essentially removes TWO barriers that allow for increased revenue. People tend to focus their attention on the "first" barrier, which is ENTRY barrier of the subscription itself. But the subscription fee is a barrier in a second way as well. It prevents people from spending MORE on your game if they choose to.

Clockwork said...

A while ago I recall reading from someone in the industry that the hardest part of any game, whether F2P or buy-to-play was getting that first $1....even that small of a price, people tend to be reluctant about. Once a player spends even $1, the chance that they will spend more goes up exponentially.

My only trouble with it is that I have yet to see a company try the alternative of selling a lot of things relatively cheaply. The goal being to get more players to spend. However I think this is also due to the fact that as Klep pointed out, for a lot of players, even a single transaction is too much. The other issue with that method is that then players will start accusing you of just trying to milk them for money; and claim that the things you are selling should be free. That higher price seems to add an element of "prestige" to the pay-walled stuff, and makes players think it is non-mandatory.

Syl said...

Interesting observation, Rohan. In SWTOR's case I'm actually curious as I'm not too informed about the game: why did they go F2P? were they in financial trouble and if they really knew F2P was gonna bring more revenue, why not do it from the start?
I agree it's sub players busing the most in F2Ps - that's because sub players tend to be frequent players. we know for a while that frequent players who play more hardcore and are into endgame also purchase more in stores. in a way that is a good thing because it still means companies need to be mindful of their subscribers, even after the F2P switch they can't change the game too drastically that it would antagonize them. you may go F2p but you cannot afford to lose all your subscribers. what you can hope for is inviting more players to try it out and win the odd person over to subscribe too. which worked in my case with LOTRO.
there are also F2P players who spend 5£ here and there on cosmetics but who would never sub. as long as they don't become the center of attention, I don't see how that's a problem.

In reply to what Xintia said:
I guess I just don't see the issue in wanting to spend more; even in sub games like WoW you can spend more on 'useless' stuff if that's what you prefer. WoW has no barrier any more than GW2 does.
so is the main problem here that it's okay to 'pay for useless extras' but not for anything else?
that's a bit of a shaky rule imo. especially since there's only silly stuff in many ingame shops, anyway.

Shintar said...

@Syl: Basically, EA had some serious WoW killer aspirations with SWTOR (no really), clearly dreaming of getting and keeping millions of subscriptions, so when the game dropped down to about half a million subs it was a serious disappointment for them. According to previous statements it was still earning them just enough money to be profitable at that point, but nothing to write home about. Seeing how F2P is all the rage now, the conversion was basically EA's attempt at still getting higher profits out of the game.

Syl said...

@Shintar
Makes sense. they really did go overboard with those development costs, didn't they. I guess for them as for many others that converted, it's an attempt at getting the best of both worlds - keep your core playerbase but also try and attract more casuals.

Helistar said...

For example, F2P in The Old Republic has roughly doubled revenues.

Problem is, for how long?
Many F2P games sell you unlocks, which are once-per-account or once-per-char. After you've got them you have zero need to spend more.

I found myself in this situation on LotRO. I usually tend to buy subscription for the "all access, no questions asked", and on LotRO this provides you with "free cash" to buy stuff. After some months I had enough to unlock all I needed.....

For SWToR it was even worse: I spent 17E and after unlocking the professions I could not find anything useful to buy (not that it mattered much, as I stopped playing short after).

Redbeard said...

Astute observations all around.

If anything, I'd be tempted to throw a little bit of money at some F2P accounts I've got for simple stuff --like bag space-- more than fancy gear. I'm actually less inclined to spend money on accounts I've already got a subscription on, but I can see where some folks will go and buy the latest cosmetic stuff.

marcleoseguin.com said...

The largest problem I have with F2P is the opportunity cost. Few games today deserve more than a month or two of anyone's time and it's a true needle in the haystack to find different.

If you've been gaming for 10 years, then you've been built with the idea that 15$ gets you access to everything but on a timer. F2P is different in that it unlocks little but lasts forever. People are simply used to getting everything available, blasting through it in 2 months and only having paid 15$. Quite the mentality to break.

Redbeard said...

@marcleoseguin--

I've often wondered exactly how much free time people have to be able to say that you can blast through all available content in a game in a month or two.

Maybe back in the day when I was in college and wasn't dating I could pull off a run like that, but I just can't see most people simply blowing through content like that without neglecting some critical things. Like, say, a job or classes or a spouse or kids....

Rowan Blaze said...

@Redbeard & marcleoseguin:
Yeah, I have never taken less than five months to reach max level in any game, between RL obligations and severe alt-oholism. I really only jumped on the F2P bandwagon following GW2. I spent years plunking down 15 bucks a month (sometimes less with longer commitments). I still didn't get to see ALL the content in various games, because of the time commitment required. With F2P, I can buy what I need, or decide that I don't need.

I still see SWTOR's F2P conversion as punitive and petty to former subscribers in a way that other F2P conversion have not been. In TSW, for example, the subscribers get additional benefits, but the freeloaders lose nothing that was available before the conversion. (Though think the current model is Buy2Play, much like GW2)

Also, I may have a higher tolerance for it, but I haven't played a game I think is as intrusive as what Kleps describes in his post. Most of the time, some additional feature requires a special currency to unlock. This currency is available through an exchange of RL cash. But is that any different other special currencies in game that you have to earn through dungeon running or whatever? Remember the Time=Money equation. I don't have as much time as some folks (see above) but I do have a little extra money.

marcleoseguin.com said...

It has nothing to do with completing content, it has to do with attention spans. Core gamers certainly can stick around longer but the gypsy gamer usually suffers from the "ooh look, a dog with a puffy tail" syndrome.

Look at it from a systemic view rather than a personal one. Gaming populations take massive nose dives at the end of the first 3 months, then flatline. Rare is the game that maintains the user base past that point, or even grow from there.

If the first few weeks are seen as a trial of the game as a whole, and portions are locked behind paywalls, then you're in a demo. SWTOR is a different experience as a subscriber or as a F2P member. Which is likely to make people say "this is fun"?

Rowan Blaze said...

"People are simply used to getting everything available, blasting through it in 2 months and only having paid 15$."

Sorry, I interpreted that as "seen all the content."

Redbeard said...

@marcleoseguin--

I'm with Rowan. I interpreted your comment to be "having gotten to max level and seen the content".

jim said...

I feel rather sad every time this discussion comes up. f2p has ruined mmorpg games and it is a fact.

Everyone and their grandma keeps coming up with the infamous time=money and therefore everything in the game can be acquired by either time or money.

Keep that up but refrain from fucking complaining about 3 month games morons. Without time there is NO DEDICATION and NO EFFORT. How are you supposed to connect with an online world without any effort? how are you supposed to FREAKING CARE ABOUT IT?

So either play games on and off for 1 month max but please know deep there that there is no way possible to make you keep playing beyond a certain point without requiring YOUR EFFORT and DEDICATION. No grind = no care for the game at all.

Please ppl just stop complaining it has gotten too old.

marcleoseguin.com said...

@jim

Ignoring that fact is like ignoring that the sun is in the sky.

If you don't want to try and find a way to get people to invest in a game, F2P or not, then it's basically a single player game. A F2P game is going to have more people that don't care about it exactly because there is no cost barrier.

Imagine if a F2P game offered the entire social game for free but you had to pay for solo content past a certain level. That would more or less force social bonds and increase the likelihood of game "stickyness". It could also backfire.

RJ said...

The point marcleoseguin makes is interesting in that it highlights the main difference between F2P games made by "Western" companies, and F2P games made by Asian ones (generally speaking).

Western F2P games tend to be selling cosmetic gear, convenience items, and account unlocks. While these tend to go over somewhat well with people (to be read as: the offerings themselves don't feel generally sleezy, though the prices could be), they impose kind of a hard cap on the amount of potential earnings that title can rake in. You can only purchase unlocks once per account/character, and how many of those cosmetic items are you going to buy, after all? That just leaves convenience items as "recurring" income.

Meanwhile, Asian F2P games tend to be selling power, often through temporary gear or lotteries. A lot of their offerings are designed to get you to keep coming back to that slot machine. Thus the design is around constant consumable items intended to keep the player "competitive" with the content.

Random boxes have started to enter Western-run games, as well, but at least the ones I've been playing at least have the items in them be worth the price of a key at bare minimum.


Also, to jim: I think you are misunderstanding what the statement means. At the very least, none of the F2P games I currently play have any way to directly convert money into "content", like what you seem to be inferring. Maybe I'm misunderstanding, but, for example, no matter how much money I may spend Star Trek Online, I can't do the end-game content any faster, or earn the rewards from it quicker. No amount of money I throw at the game will allow my Fleet to build their starbase any faster. All the money in the world won't make me better at Operations in TOR.

I honestly can't say I know of any F2P game that directly lets you short-circuit content with money. At least, in the fashion it seems you are suggesting.