Andrew Lewis pithily tells us in a 2010 Metafilter discussion that ‘If you’re not paying for something, you’re not the customer; you’re the product being sold’.
Besides being a fantastic line to trot out on any occasion where someone bitches about Facebook, it was oddly prescient of the last two years’ rise of free-to-play (f2p to its friends and marketing directors) videogames. While they’ve been around for much longer, the post-2010 wave of releases has marked a dramatic shift in what the F2P sector is and does, and how it makes money.
Kongregate, Newgrounds and others have been doing business for the better part of a decade (sometimes more) – but their monetisation model was one of traditional, web 1.0 advertising sales: cram three or four flash banners on the site, and have done with it. Kongregate does a little better, mostly by being something it’s cool to donate to, but at the heart of matters, the first generation of “free games” was one where the game was along the lines of Hollyoaks: a draw to convince the player to stay around while they were advertised at. With declining pure ad revenues through the 2000s, this model was barely sustainable, and certainly not the lucrative monster that the free-to-play revolution has become.
The secret to the profit models behind Farmville (and clones), The Sims Social, Team Fortress 2 after June 2011, Tribes: Ascend, Star Trek Online, and, perversely, Cow Clicker, is in the other two words: “to play”. These games are free to play, but incorporate paid bits. For the first time, the profit-making vehicle was not the advertising surrounding the ‘feature’ game; it was built in as an enhancement. Here’s a bicycle, but it’s grey and only has a bunch of low gears. Want to go faster or look cooler? Fetch your wallet.
The trick lies in two factors: the diminished barrier to entry, and the low per-transaction cost. These games are anything but shallow: enormous effort goes into the creation of deep and time-consuming systems which will both engage the player and suck money out of them. Here lies the major distinction: the new wave never offers the player an outright pay-to-win; that would be unfair and near-inevitably leads to an almighty community backlash if people are seen to be twinking for money. Instead, one pays to go faster, or to subvert the random roll; if I fancy a camera beard or a Detective Noir for my Spy, or a bolt launcher for my Pathfinder, and I don’t feel like waiting for the dice gods to drop one for me or earning a stack of arbitrary points to cash in for a new gun – I can cough up for it, £2 for the beard, £3.50 for the hat and about the same for the crossbow. If I’m feeling particularly vain, I can even buy the $70 monocle that sparked in-game protest in EVE Online. It’s pricey for an in-game chunk of bling – so much so that it changed economies and made small fortunes for a lucky few players – but it’s got quite the look to it. Show up in Jita, or one of the other, less-populated trade hubs, and before long you’ll see someone with one. And then get monocle envy.
Looking at World of Tanks, you can even buy ammo which beats the dice: better armour penetration stats, in exchange for taking cash out of your pocket and turning it into virtual glory. Thankfully, all these things are pretty cheap: as a rule of thumb, you won’t see many in-game transactions more expensive than a pint. This is well-established as a convention; below a certain threshold, we don’t even think about spending the money – it is literally pocket change, and all that matters to convincing us to spend it on a regular basis is to convince us to do it once: Team Fortress offers a bunch of restrictions on truly free accounts, Tribes a substantial and permanent XP boost to all paying customers, and Farmville is most insidious of all. If you’ve not played, go back and do the tutorial. Spot how they give you just enough gold, incrementally, to try each one of the pay-features as a mandatory component of the start of the game. The first one’s free, naturally.
The coke dealer model of microtransaction sales is perhaps the most insidious aspect of this brave new free world: once you’ve tasted the highs of the occasional hat, new gun, or ship, or unit, it’s tough to go back to a situation where you have to wait twenty minutes to harvest your watermelons, or play ten matches to rack up enough XP to buy that shiny new spinfusor that that bastard kept killing you with last time you played. While the average player isn’t the ‘product being sold’ of the Lewis line, they are reduced to a marketing target – the game must serve two masters now. First and (for the moment) foremost is to be something fun. Nobody will play University Undergraduate Simulator (but if any studios out there would like to test this, my consultancy rates are very reasonable) – building a competent war-themed hat simulator is a key component of selling hats. While this happens, though, the game must bait the player with just enough paid and earned rewards to be unlocked later, or right now if they open their wallet. A better game awaits, inside the paywall: it must do (or the goods must be a sham) – otherwise, why the hell would anyone pay for it? CCP Interactive might have the right idea: a $10,000 monocle, for the starship captain who simply must declare themself richer than everyone else. At least these cosmetic goods, have value only in the minds of the player, not the numbers of the game.
So what does the future hold for the free-to-play generation? In the first half of the year, we’ve seen World of Tanks go public, Star Trek Online convert, Tribes: Ascend launch, both new Mechwarrior franchise games get properly announced and shortly to go into beta, World of Warplanes announce a beta, Planetside 2 launches just in time to ruin January collections, Dust 514 launches around the same time, and Runescape, original among the free-to-plays, hit 200 million users. If nothing else, the industry is backing the free-to-plays hard; we can expect more of them in the future. Valve declared recently that going free rakes in more cash from hat and gun sales in a year, than TF2 made in its’ four-year lifespan to that point, even including the 30% cut that community contributors take from that item store; the Steam item store is not unrepresentative, and we can definitely see the logical conclusion: publishers pursuing constant drip-feed microtransaction revenue streams, rather than big-ticket £60 releases. I’m calling it now: Call of Duty 2015 will be free.