Paying for free

A common attitude of traditional video games developers starting in the free to play model is to assume that because the game is free, players will be grateful and, if given the right marketing exposure to raise awareness,  will come in numbers to enjoy this “gift” that the developer is giving them.  It is understandable for newcomers to the F2P model to think like that at first, because they are used to charge for the fruit of their work, but it’s definitely delusional. It is actually a selling process (even though it’s free). Would you be expecting to do a lot of sales by just putting a product out there there and letting customers come to you? Then don’t do it with free to play games either.

The reason is that, while the user doesn’t pay you any monetary value to enjoy the game, she actually pays a price in attention and time. Those are scarce, and have an indirect monetary value, different for everyone (how much would you pay for a faster train that will save you an hour of commuting time, or a cleaning lady to save you chore time?). Any barrier in the way of getting into the game (downloading a client, filling a boring registration form, etc) actually raises this price. Clicking on the “download” button has a price, clicking install has another price, patching has a price, etc. If you measure the dropoff rate at each stage versus your cost per acquisition, you can see exactly what this price is on average. Reducing these barriers is like dropping your price.

The user is also paying in time and effort spent doing things in the game that will profit to other players (and so to the game’s operator and developer). She will tank, DPS or heal, help other players, be a trade partner, be a PvP opponent, tell jokes, gossip, organise events, participate in groups, lead raids, leave stuff in guild vaults, create user-generated content, rate user-generated content, post in forums, etc. Also, just because she participates, the operator can record and measure her stats and behaviour to improve the game, and that’s very valuable.  All of that, while fun for the user (and so different from the price of downloading or patching), is also an indirect payment to you in terms of time and attention.

In the case of most MMOs and online games, there is also an anticipated cost. It is highly likely that the user anticipates (and most of the time rightly so) that your game is an investment. There are very few online games that are truly immediately entertaining. Most of the time, the persistent aspect means that it will become more and more fun over time. Or, in the case of more immediate and skilled-based games, building up the skills is preliminary to having fun (especially in the case of PvP games – the fun may never happen if your skills stay low). Also, the community aspect makes the game also more fun the longer you stay into and build connections. After all, there’s only so many games one can play at the same time,  and switching games  is costly, and becomes increasingly so the longer you have played. Confronted with a vast array of choices (and increasingly so as the number of F2P competitors increase), the rational player is likely to be picky about investing in any of them, even if the access is easy and thus it requires relatively low upfront attention investment.  Would you pick up and start reading Tolstoy’s “War and Peace” right now, even if it was free and in a convenient format? Chances are that you would postpone it until you feel you have enough time to enjoy it (and maybe that time will never come). Reading a few pages is pointless. Starting to play an online game for one hour doesn’t make any economical sense either, for most games.

A rational investment strategies for players is for instance following an existing community (that’s time saved from having to build relationships again), or finding a maximum of information about the game to be sure it’s worth investing in (for example, is it enjoyable to play according to my schedule?).  Amongst the less differentiated categories with a lot of competition (for example, “vanilla” fantasy MMOs), this tends to promote big  popular games over small niche ones – there are more chances to meet people inside, and a game that is popular with numerous players is less likely to go bankrupt and disappear, reducing your investment to nothing.  Beyond the safety, the user has to be assured about the long-term appeal of the game : will the endgame be interesting, will her friends stay? There’s a part of communication strategy to the players that should appeal to the investor in them : an MMO or online game service should communicate stability and long-term interest just as a financial product should.

So, free has a price that players are paying for, and which is refelected in the price per acquisition. It just happens to be smaller that if you also charge for accessing the game. Free with immediate “return on investment” for the player, no friction or barriers to entry would be the absolute “free” level.  It’s important though to keep in mind that, like any price, it is relative depending on how much your consumers are sensitive to it.  At the extreme end of the scale, a very niche game with no direct competition maybe can require a lot of time, attention and effort to get into, in addition to charging for the access, because the people interested in playing it in the first place are likely to be less price-sensitive and more willing to invest. Of course, such a pricing might make more difficult to convert people  (in the sense of getting them interested after they tried the game.)

Coming back to the selling process, it’s easier to imagine if you think of the online game purely as a web service. A lot of web services are free, or have a free component, and the users expect them to be, they don’t consider that as a gift. It does not mean that they all get incredible traction, because getting users to register and come back is a continuous sales process, a battle that is fought everyday.

Tags: free to play

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