Kongregate: the science behind the massive profits of F2P games(kongregate.com)
kongregate.com
Kongregate: the science behind the massive profits of F2P games
http://www.kongregate.com/forums/2468-general/topics/431337-emily-greer-ceo-of-kongregate-on-the-science-behind-the-massive-profits-of-tyrant-unleashed-and-other-f2p-games
52 comments
Emily Greer (CEO of Kongregate) has a very good presentation, not to my knowledge already linked in this discussion, about F2P whales: http://www.slideshare.net/emily_greer/dont-call-them-whales-... Partially it's an apologia for the business model, but it is dripping with useful facts and commentary.
I used to be a moderator on Kongregate and had a decent amount on interaction with multiple of the administrators. I also was somewhat involved in the flash game market (just casually as a hobby). When I found out how Kongregate specifically worked with developers to help make games that target the 'whale' spenders, I was pretty shocked. Making games that are not enjoyable, just addictive, in order to take in thousands of dollars from single individuals just seemed so unethical.
I just glanced over that link of Emily's ethical rationale for this, and it didn't convince me. But I'll have to go back through it more carefully before I can decide for sure.
I just glanced over that link of Emily's ethical rationale for this, and it didn't convince me. But I'll have to go back through it more carefully before I can decide for sure.
A few more thoughts on the matter of whales:
On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K.
Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists.
Her most interesting points, in my opinion are as follows:
We think whales are bad (but shouldn't) because they spend their money on virtual goods: "Spending $5-$10k on specialized PC Gaming rigs that improve your skills and enhance your competitiveness is not really that different from spending money for in-game items that do the same. But I bet you all find it a lot easier to contemplate."
We think whales are bad (but shouldn't) because we don't think games are a legitimate hobby: "The bias against games is so insidious that even within the industry we’ve internalized it enough that we question someone with means spending tens of thousands of $s on a game, especially when you combine it with the low value we place on mobile and PC games and especially virtual goods. And so people jump to explanations like “mental illness” or “evil games manipulating players” when the real explanation is that they are rational, wealthy people who are dedicated fans investing in a particular game."
I personally don't agree with her though. We would have no problem with a person spending $10K on software. The issue isn't virtual vs. physical goods. The issue comes down to if games are a legitimate, healthy hobby or not. I would argue that they are not, at least for most of those who are whales. I don't have time to flesh this argument out tonight though.
On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K.
Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists.
Her most interesting points, in my opinion are as follows:
We think whales are bad (but shouldn't) because they spend their money on virtual goods: "Spending $5-$10k on specialized PC Gaming rigs that improve your skills and enhance your competitiveness is not really that different from spending money for in-game items that do the same. But I bet you all find it a lot easier to contemplate."
We think whales are bad (but shouldn't) because we don't think games are a legitimate hobby: "The bias against games is so insidious that even within the industry we’ve internalized it enough that we question someone with means spending tens of thousands of $s on a game, especially when you combine it with the low value we place on mobile and PC games and especially virtual goods. And so people jump to explanations like “mental illness” or “evil games manipulating players” when the real explanation is that they are rational, wealthy people who are dedicated fans investing in a particular game."
I personally don't agree with her though. We would have no problem with a person spending $10K on software. The issue isn't virtual vs. physical goods. The issue comes down to if games are a legitimate, healthy hobby or not. I would argue that they are not, at least for most of those who are whales. I don't have time to flesh this argument out tonight though.
> The issue comes down to if games are a legitimate, healthy hobby or not.
For me the issue is not whether "games are a healthy hobby", but whether F2P games are. I think they are not, or rather I should clarify: the kind of games usually called F2P or "freemium", which base their gameplay on grinding and which try to make you spend money to buy coins, which are powerups that essentially "speed up" the boring parts of the game are not a legitimate, healthy hobby. They are preying on people's addictive behavior while providing very little genuine value in return. They are what people like Jonathan Blow (of Braid fame) derides as Skinner Boxes and what Ian Bogost mocked with his game "Cow Clicker" (http://bogost.com/games/cow_clicker/).
I'm a Kongregate player and there are true gems in there, but most F2P games can be safely disregarded. If it has coins you can buy, or you can spend real money to bypass parts of the game, this is a huge red flag. (Another genre that I completely ignore is the overcrowded "Empire Building Strategy Game", which if you pay attention is always the exact same game with a different skin every time -- and most are F2P, while we're at it).
For me the issue is not whether "games are a healthy hobby", but whether F2P games are. I think they are not, or rather I should clarify: the kind of games usually called F2P or "freemium", which base their gameplay on grinding and which try to make you spend money to buy coins, which are powerups that essentially "speed up" the boring parts of the game are not a legitimate, healthy hobby. They are preying on people's addictive behavior while providing very little genuine value in return. They are what people like Jonathan Blow (of Braid fame) derides as Skinner Boxes and what Ian Bogost mocked with his game "Cow Clicker" (http://bogost.com/games/cow_clicker/).
I'm a Kongregate player and there are true gems in there, but most F2P games can be safely disregarded. If it has coins you can buy, or you can spend real money to bypass parts of the game, this is a huge red flag. (Another genre that I completely ignore is the overcrowded "Empire Building Strategy Game", which if you pay attention is always the exact same game with a different skin every time -- and most are F2P, while we're at it).
Please see my comment above which discusses Emily Greer's rationale for why freemium isn't inherently evil - people already spend large sums on physical sports. Buying better equipment is paying-to-win.
That said, in most sports your equipment augments a skill. The skill of mindlessly clicking (or not clicking -- see the "idle games" genre) isn't particularly fascinating to you or me so we shouldn't make those kinds of games.
Ian Bogost received death threats for removing Cow Clicker online. Was that a fault of his stunningly addictive gameplay, or a flaw in primate psychology that we as a species can work to correct (genetically, or perhaps through social conditioning eg. teaching people not to gamble)?
That said, in most sports your equipment augments a skill. The skill of mindlessly clicking (or not clicking -- see the "idle games" genre) isn't particularly fascinating to you or me so we shouldn't make those kinds of games.
Ian Bogost received death threats for removing Cow Clicker online. Was that a fault of his stunningly addictive gameplay, or a flaw in primate psychology that we as a species can work to correct (genetically, or perhaps through social conditioning eg. teaching people not to gamble)?
This is highly subjective, of course, but I don't think it's the same as with physical sports... or even genuinely challenging videogames!
In those cases sometimes it's partly paying-to-win, but even then there is genuine value in the activity itself. Playing hockey or Counter Strike is its own reward. But clicking cows isn't, it's an exploit of the human brain's tendency towards addictive behavior. Often there is very little "game" in these F2P games, which is why you spend money to quickly progress through the grinding and bypass the boring gameplay. You level up or buy clothes for your mascot or a bigger house, but don't engage in an actual enjoyable activity.
I understand this is a lucrative business opportunity, and of course no-one is forcing anyone to play these games... but I find the whole thing perverse. I don't agree casual games should necessarily be hacks of the human brain.
In those cases sometimes it's partly paying-to-win, but even then there is genuine value in the activity itself. Playing hockey or Counter Strike is its own reward. But clicking cows isn't, it's an exploit of the human brain's tendency towards addictive behavior. Often there is very little "game" in these F2P games, which is why you spend money to quickly progress through the grinding and bypass the boring gameplay. You level up or buy clothes for your mascot or a bigger house, but don't engage in an actual enjoyable activity.
I understand this is a lucrative business opportunity, and of course no-one is forcing anyone to play these games... but I find the whole thing perverse. I don't agree casual games should necessarily be hacks of the human brain.
I 100% agree. That's my main issue too.
Most of the games taht works on this kind of model are usually simply not very good. And seeing that at the beginning, for me it's a very big red flag that will say. Don't waste your time on this.
This is because they don't need that many people to make money, and they will always get at least someone, so the better business model is quantity over quality.
Most of the games taht works on this kind of model are usually simply not very good. And seeing that at the beginning, for me it's a very big red flag that will say. Don't waste your time on this.
This is because they don't need that many people to make money, and they will always get at least someone, so the better business model is quantity over quality.
Yep. In particular, if demographically whales are (as subtextually claimed on slide 12) functioning upper-middle-class professionals like business owners, engineers, doctors, and CPAs, then there doesn't seem to be any meaningful harm in it.
My unease about F2P monetization is that my sense of the demographics is that it tilts more towards "people with undiagnosed depression" or "the Vegas slots demographic."
My unease about F2P monetization is that my sense of the demographics is that it tilts more towards "people with undiagnosed depression" or "the Vegas slots demographic."
Slide 12 isn't a convincing argument that these people are okay, but of course it doesn't indicate the latter either. But even if these people are upper-middle-class professionals, there's still a chance that their action stem from things like depression/addiction. My hunch would be that the cause of the big spending leans more towards addiction than well-reasoned spending on a health hobby, but without data or evidence that's purely a guess.
It would also be interesting to look at the group of whales in general. Perhaps the very top 20 spenders are all well-balanced, healthy individuals with large incomes. But what about the rest of people who are spending large amounts of money? This might be where struggling individuals are more likely to be found.
It would also be interesting to look at the group of whales in general. Perhaps the very top 20 spenders are all well-balanced, healthy individuals with large incomes. But what about the rest of people who are spending large amounts of money? This might be where struggling individuals are more likely to be found.
I think in the absence of data, people see what they want to see such that it agrees with their worldview. Nobody likes to endure cognitive dissonance. Even in the presence of data people see what they want to see. Me? Well, some of the time the people spending money are sorely addicted; some of the time they have a mental illness like depression / mania / psychosis / schizophrenia / OCD / whatever; some of the time it's credit card fraud; some of the time it's kids spending their parents' money; some of the time it's just some person with access to a lot of cash that decides to throw money at the problem of becoming good at the game. It would be really neat to see some numbers.
Actual F2P developer here. I've spent countless hours interviewing payers. Vast majority of people are normal, hardworking people who just genuinely enjoy games.
You're focused on a problem that doesn't affect 99.964% of people playing the game (Math: Avg 3% of people are payers, 4% of those payers are whales, and a small fraction of those big payers could be recognized as people with issues).
Moreover, even if this problem existed, that doesn't make these games inherently bad. People can develop addictions to whole gamut of things: alcohol, drugs, sex, gambling, porn, Facebook, relationships, food, etc. But none of those things are inherently ban. Why is gaming any different? Yes, F2P games optimize for retention/monetization, but how is this any different from any other product in the market?
You're focused on a problem that doesn't affect 99.964% of people playing the game (Math: Avg 3% of people are payers, 4% of those payers are whales, and a small fraction of those big payers could be recognized as people with issues).
Moreover, even if this problem existed, that doesn't make these games inherently bad. People can develop addictions to whole gamut of things: alcohol, drugs, sex, gambling, porn, Facebook, relationships, food, etc. But none of those things are inherently ban. Why is gaming any different? Yes, F2P games optimize for retention/monetization, but how is this any different from any other product in the market?
Other products don't aren't optimized by their creators to extract the maximum revenue from the 0.046% of their market that the creators have determined are vulnerable to remarkably effective psychological manipulation techiniques, and upon whom the creators are dependent for the majority of their revenue.
Next question?
And the next question really shouldn't be "Oh but aren't they really? Other products use advertising too!" If it is, please refer to the answer above, and add reading comprehension.
Next question?
And the next question really shouldn't be "Oh but aren't they really? Other products use advertising too!" If it is, please refer to the answer above, and add reading comprehension.
You don't know much about other industries then. Both gambling, food and drink sectors are optimized to build addiction and maintain it over the longest possible period. They call it "fidelity" but it's the same thing.
I personally think f2p is essentially a branch of the gambling industry and will eventually be recognised as such in law. After all, it was the case for coin-ops (at least here in Europe), which had basically the same business model.
I personally think f2p is essentially a branch of the gambling industry and will eventually be recognised as such in law. After all, it was the case for coin-ops (at least here in Europe), which had basically the same business model.
His point was that in other industries they don't optimize their products for a tiny percentage of their clients.
Why do we as a society scrutinize the F2P games industry for its bias against "people with undiagnosed depression" and yet let other industries (which have been in business for ages) slide? A seemingly silly example is knives, for cutting oneself. My concern is that we are looking too closely for patterns and problems when it seems like to me that the capturing of certain types of customers is just plain old marketing.
i don't see many knife companies actively courting people attempting to self harm.
"I spend several hundred dollars a year on my game. My first upgrade was to get a membership. Then I purchased new equipment. After playing for a bit, I upgraded to a better equipment so I could score more points in my game"
"..surprise, my game is Competitive Figure Skating. Games are hobbies. People spend large sums of money to compete in physical games, why the stigamtism against digital games?"
--paraphrasing Emily Greer.
Personally I find that a great argument of why freemium isn't inherently evil. Pay-to-win already exists in physical sports.
Japan, however, banned certain freemium games where you pay for increased chance of good rewards in a random check: http://www.gamasutra.com/blogs/BetableBlog/20120525/171124/W...
"..surprise, my game is Competitive Figure Skating. Games are hobbies. People spend large sums of money to compete in physical games, why the stigamtism against digital games?"
--paraphrasing Emily Greer.
Personally I find that a great argument of why freemium isn't inherently evil. Pay-to-win already exists in physical sports.
Japan, however, banned certain freemium games where you pay for increased chance of good rewards in a random check: http://www.gamasutra.com/blogs/BetableBlog/20120525/171124/W...
> game is Competitive Figure Skating
but the problem is that figure skating is an established "game" (aka, a sport). The rules haven't been made such that you _need_ to spend the money.
A freemium game is designed in the very core mechanic, to be unfun unless you paid up. that's what i have a problem with - game is an art, and if an artist wouldn't put in a certain mechanic except under coercion (say, by the threat of non-payment), then i'd say it's not part of their original design. I only want to play the pure, original design of a game, unhampered by business requirements. Freemium games are choking the air out of the market for such games unfortunately, and that's why i hate it.
but the problem is that figure skating is an established "game" (aka, a sport). The rules haven't been made such that you _need_ to spend the money.
A freemium game is designed in the very core mechanic, to be unfun unless you paid up. that's what i have a problem with - game is an art, and if an artist wouldn't put in a certain mechanic except under coercion (say, by the threat of non-payment), then i'd say it's not part of their original design. I only want to play the pure, original design of a game, unhampered by business requirements. Freemium games are choking the air out of the market for such games unfortunately, and that's why i hate it.
Yes. And with younger players who have less distinguished selection skills (and mental resolve to not fall into a time vortex), those games will be around for a while.
Somewhat related, in Apple's design awards for top iOS apps they remarked on one game as using "in app purcahses to add variety and different gameplay modes, not just pay to win".
If only Apple reviewed each game for quality!
Somewhat related, in Apple's design awards for top iOS apps they remarked on one game as using "in app purcahses to add variety and different gameplay modes, not just pay to win".
If only Apple reviewed each game for quality!
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I once had a job where I did data analysis of casino data, specifically slot machines. It turns out, casinos also make half of their money from a small number of people who gamble a lot. I've heard alcohol stores are similar.
Eventually, the pendulum will swing the other way. People will get sick of freemium games, and go back to games where you pay $1-$10 once.
Some people made a lot of money with freemium, so everyone is copying them.
I can't stand wait timers, energy systems, and all the other tricks they use to balance freemium games.
Many freemium games require an Internet connection to play, which is bad for me because my prime gaming time is on the subway while commuting.
Another bad part about freemium is that, when they someday shut down the servers, you won't be able to play the game AT ALL anymore. I can still play Super Mario Bros. even if Nintendo goes bankrupt and decides they don't care about the game anymore.
Some people made a lot of money with freemium, so everyone is copying them.
I can't stand wait timers, energy systems, and all the other tricks they use to balance freemium games.
Many freemium games require an Internet connection to play, which is bad for me because my prime gaming time is on the subway while commuting.
Another bad part about freemium is that, when they someday shut down the servers, you won't be able to play the game AT ALL anymore. I can still play Super Mario Bros. even if Nintendo goes bankrupt and decides they don't care about the game anymore.
I make my living off of mobile freemium games. We don't do anything with replay timers or the like - we advertise, mostly, and have fun in-app purchases.
For a couple years we offered two versions of our apps - paid and free, free being ad supported. In a bid to simplify things and encourage more conversions, we switched to in-app purchase to get rid of ads. (Also, app stores had been optimized to push down app results for non-free games - plenty of reading out there about the causes and effects.)
To date, just under 5% of our revenue is paid. Despite playing for years, many people don't believe our games are worth $1.99. If you believe the race to the bottom will reverse itself, I'm here to tell you it won't. It's guided by the walled gardens and they like it this way.
We have had millions of downloads and on our most popular game, have abnormally long retention. Even some of our most die-hard players will not spend $1.99.
Maybe - MAYBE console gaming will one day return from F2P, but I doubt it. At least not in the near future - the industry is still moving towards it.
But in mobile gaming, success is a volume play. And the volumes won't part with $.99 in the traditional way. If they did, F2P wouldn't be a thing. And maybe gamers will pay for games, but the masses? Not so much.
For a couple years we offered two versions of our apps - paid and free, free being ad supported. In a bid to simplify things and encourage more conversions, we switched to in-app purchase to get rid of ads. (Also, app stores had been optimized to push down app results for non-free games - plenty of reading out there about the causes and effects.)
To date, just under 5% of our revenue is paid. Despite playing for years, many people don't believe our games are worth $1.99. If you believe the race to the bottom will reverse itself, I'm here to tell you it won't. It's guided by the walled gardens and they like it this way.
We have had millions of downloads and on our most popular game, have abnormally long retention. Even some of our most die-hard players will not spend $1.99.
Maybe - MAYBE console gaming will one day return from F2P, but I doubt it. At least not in the near future - the industry is still moving towards it.
But in mobile gaming, success is a volume play. And the volumes won't part with $.99 in the traditional way. If they did, F2P wouldn't be a thing. And maybe gamers will pay for games, but the masses? Not so much.
I'm not what I would ever describe as a gamer. Well, I was massively when I was much younger in the arcade, 8 and 16 bit days but now, not so much/at all.
The problem I have with many freemium games is for me they have absolutely no lasting appeal. I would estimate that 75% of freemium games I've installed, I may have played a sum total of half an hour and then got annoyed/fed up/bored and removed it. Adverts, replay timers etc. are certainly to blame but what mostly is a turn off for games of these types is there is no soul in a lot of these games.
Take Triple Jump, Don't Step On The White Tile, Avoid The Blocks etc. for example(s). They're like Christmas cracker toys. You play them once or twice, discover how lame they are and throw them away.
While I realise those games aren't meant to be much more than that (and an SEO exercise), there are so many like these on the various app stores and few games that have any kind of depth to them. I would more than happily, and have happily, paid $1, $2 or more for a game that held my interest for longer than half an hour. The biggest problem I have is these throw-away games have been so cleverly marketed or SE-optimised that they make up the bulk of "featured", "highlighted" or "best selling" games and any game with a modicum of depth disappear into the ether, undiscovered. It's frustrating for someone who wants to play a fun, entertaining game, not an annoying, repetitive and uninspiring christmas cracker game.
The problem I have with many freemium games is for me they have absolutely no lasting appeal. I would estimate that 75% of freemium games I've installed, I may have played a sum total of half an hour and then got annoyed/fed up/bored and removed it. Adverts, replay timers etc. are certainly to blame but what mostly is a turn off for games of these types is there is no soul in a lot of these games.
Take Triple Jump, Don't Step On The White Tile, Avoid The Blocks etc. for example(s). They're like Christmas cracker toys. You play them once or twice, discover how lame they are and throw them away.
While I realise those games aren't meant to be much more than that (and an SEO exercise), there are so many like these on the various app stores and few games that have any kind of depth to them. I would more than happily, and have happily, paid $1, $2 or more for a game that held my interest for longer than half an hour. The biggest problem I have is these throw-away games have been so cleverly marketed or SE-optimised that they make up the bulk of "featured", "highlighted" or "best selling" games and any game with a modicum of depth disappear into the ether, undiscovered. It's frustrating for someone who wants to play a fun, entertaining game, not an annoying, repetitive and uninspiring christmas cracker game.
This is exactly the problem I'm trying to solve with Curated[1]. The Play Store is filled with low-think, one-tap junk these days... Finding a good game on the Play Store is almost as hard as finding a science show on the Discovery Channel. It's optimised for the unthinking masses, which makes sense for Google from a monetary perspective, but for anyone interested in a deep game, then either Google's algorithm needs to get waaaay smarter or we have to do it ourselves.
[1]https://play.google.com/store/apps/details?id=com.curated.an...
[1]https://play.google.com/store/apps/details?id=com.curated.an...
really good, I like how you've done this: clear layout, shows the sort of stuff I'm interested in. Good job.
Try card hunter
>Maybe - MAYBE console gaming will one day return from F2P, but I doubt it. At least not in the near future - the industry is still moving towards it.
That's an optimistic statement almost bordering on naive. What the market seems to be moving towards is adding F2P mechanics to $60 games. GTA V lets you buy in-game money for the multiplayer mode. Mortal Combat X has easy fatality mode where you get the famous "fatality" animations after every game (costing $0.20 every time it triggers). Almost every AAA game on the market lets you change the look of your character for a few dollars.
That's an optimistic statement almost bordering on naive. What the market seems to be moving towards is adding F2P mechanics to $60 games. GTA V lets you buy in-game money for the multiplayer mode. Mortal Combat X has easy fatality mode where you get the famous "fatality" animations after every game (costing $0.20 every time it triggers). Almost every AAA game on the market lets you change the look of your character for a few dollars.
There is an interesting line in one of those presentations: (paraphrase) "There is a hyper-competitive market for player attention, which has caused the price of a game to fall all the way to zero, but after they're in your [end]game you are a monopolistic provider of the game content, so you can charge any profit-maximizing price."
This is a slightly more nuanced take than mine, which is that F2P games are what gamers have been voting for for years with their wallets, by stealing everything that wasn't nailed down and most of the stuff that was.
This is a slightly more nuanced take than mine, which is that F2P games are what gamers have been voting for for years with their wallets, by stealing everything that wasn't nailed down and most of the stuff that was.
I'd prefer the first explanation as well, not least because "optimize your business model for the people who are willing to pay you, not the people who aren't."
I think Kongregate's perspective on F2P is a lot more nuanced than your usual F2P mills (Zynga, et al) on the subject, and I say this as someone who could hardly be described as a fan of F2P.
It's worth nothing that Anthony Pecorella, the speaker in the first linked video, also moonlights for an indie game company (Level Up Labs) that's been quite successful while tacking completely opposite to F2P. So in my experience he has a strong appreciation for both sides of the business. And Emily Greer is a super knowledgeable badass that one ignores at their peril -- a lot of her talks have really challenged some of my assumptions about the F2P business models.
Source/Full Disclosure: I know this stuff because I'm Anthony's co-founder at LUL.
It's worth nothing that Anthony Pecorella, the speaker in the first linked video, also moonlights for an indie game company (Level Up Labs) that's been quite successful while tacking completely opposite to F2P. So in my experience he has a strong appreciation for both sides of the business. And Emily Greer is a super knowledgeable badass that one ignores at their peril -- a lot of her talks have really challenged some of my assumptions about the F2P business models.
Source/Full Disclosure: I know this stuff because I'm Anthony's co-founder at LUL.
> Eventually, the pendulum will swing the other way. People will get sick of freemium games, and go back to games where you pay $1-$10 once.
> Some people made a lot of money with freemium, so everyone is copying them.
Freemium was a response to the market. Most of players are not willing to pay anything:
http://venturebeat.com/2015/01/05/monument-valley-developer-...
> Some people made a lot of money with freemium, so everyone is copying them.
Freemium was a response to the market. Most of players are not willing to pay anything:
http://venturebeat.com/2015/01/05/monument-valley-developer-...
It's possible to make freemium without wait timers. See Hearthstone, League of Legends.
I don't see freemium disappearing anytime soon.
I don't see freemium disappearing anytime soon.
Those both essentially do run on wait timers. You can earn the components needed to play at a high level gradually with a limited number of plays per day, or pay to accelerate that process.
This model isn't as harsh as actually locking out from the game if you don't pay, but it sure does move along the same axis of paying to alleviate a time-based restriction.
This model isn't as harsh as actually locking out from the game if you don't pay, but it sure does move along the same axis of paying to alleviate a time-based restriction.
Uh? This might be somehow true for Hearthstone, but you'll have a hard time convincing me there is any kind of timer in LoL. All the in-game purchases are basically just cosmetics, and the lightweight grinding is more of a tutorial phase than anything else.
Hero purchases are not cosmetic, neither is the grind to level 30 so you can use full rune pages (basicly minor buffs to a collection of stats). It is inaccurate to portray these things as cosmetic.
And yes, I'm sure you can 'have fun anyways' and a host of other standard pay to win excuses, but the fact remains its an element you pay for that makes you more competitive, and not simply cosmetic.
And yes, I'm sure you can 'have fun anyways' and a host of other standard pay to win excuses, but the fact remains its an element you pay for that makes you more competitive, and not simply cosmetic.
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You're exactly right. However, back when the NES came out, duplication of an NES rom was beyond the average consumer. Now, say you release a DRM free game (that will be available regardless of internet connection, server uptime etc) -- how do you monetize it when fans will install free copies?
There's a reason gog.com is making money. Going DRM-free doesn't harm your business, it just respects the users.
If people like a game, they will pay for it as long as you don't have some kind of annoying obstacle preventing them from doing so.
edit: DRM isn't even really a good counter to piracy for the most part. It will be cracked sooner or later (sometimes before the game is even officially released) and the people who wish to pirate it will do so.
If people like a game, they will pay for it as long as you don't have some kind of annoying obstacle preventing them from doing so.
edit: DRM isn't even really a good counter to piracy for the most part. It will be cracked sooner or later (sometimes before the game is even officially released) and the people who wish to pirate it will do so.
DRM is largely about protecting the new-release window where a supermajority of AAA game/video sales happen. It doesn't have to be effective for all time -- if it delays the first crack until release plus two weeks then it's still worth tens or hundreds of millions of dollars in marginal sales.
It's less effective at even that much than it could be, e.g. any game released on Steam can be cracked in a largely homogeneous fashion.
(Which is exactly the value point I'd be working to improve if I was working at Steam and trying to convince more titles to release there.)
(Which is exactly the value point I'd be working to improve if I was working at Steam and trying to convince more titles to release there.)
Steam has cultivated a culture of paying for games, because it's easier than pirating, which is easier than buying physical copies. Given their success, I don't think they need to change anything, especially if it makes anything harder for the end-user; plus its bedrock is smaller, more indie titles who can't afford to implement DRM anyway — so the platform treats them very well.
* http://www.reddit.com/r/Steam/comments/1j4lj3/how_doesdid_st...
* http://www.reddit.com/r/Steam/comments/1j4lj3/how_doesdid_st...
Steam is hugely important in this regard because it shows how catastrophically wrong the old guard in games, video, music, and other media are. By default, people accept that paying for things is right. The challenge is to make paying for things easier than not, and to not actively sabotage the social relationship that makes customers prefer paying for things to pirating them. Steam has actually done a reasonable job at that: by contrast, DRM and MPAA/RIAA-style tactics are, to understate, recent-severe-head-wound-level dumb business decisions; they say to customers "our relationship with you is fundamentally antagonistic." Once that social message has been sent and supremely customer-hostile services like Ultraviolet (and worse earlier systems) established, piracy becomes massively attractive and the MPAA/RIAA-style cartels have cut off the ability to have a reasonable conversation about it.
I agree with this - low friction is what makes Steam successful. (Personally I stick with HumbleBundle as the Steam client has traditionally sucked ram).
Steam lets players join multiplayer games with their friends -- seamlessly merging a friend list with game servers across all games. That's a strong incentive to use Steam.
So what about other forms of content without online multiplayer like say, TV shows?
Steam lets players join multiplayer games with their friends -- seamlessly merging a friend list with game servers across all games. That's a strong incentive to use Steam.
So what about other forms of content without online multiplayer like say, TV shows?
Those people were never going to buy anyway. There (hopefully) are enough people who want good games and are sick of the freemium garbage, that they'll pay for a game.
I.e., 100k paid sales and 10M "unauthorized copies" is still enough for an indie dev to make a living.
I.e., 100k paid sales and 10M "unauthorized copies" is still enough for an indie dev to make a living.
I'm watching "Newbie to Big Spender: Understanding the Player Lifecycle", by Kongregate's CEO.[1] That's from 2012. This was made before they felt a need to apologize for the business model. It's openly about to hook players and turn them into big spenders. There's a 4-stage process to hook them. Few players start out as big spenders in a game. Heavy spending comes later. Game levels are designed accordingly. The user shouldn't be pressured to pay until they have 50 plays or so. By Stage 4 (Committed Players), players are no-longer price sensitive and will buy cosmetic items.
68% of revenue comes from players who spend over $500 in a single game. Their biggest whale back then had spent $30,000 on one game. All those people who spend $5 don't matter. That's the free-to-play business.
[1] http://developers.kongregate.com/blog/newbie-to-big-spender-...
68% of revenue comes from players who spend over $500 in a single game. Their biggest whale back then had spent $30,000 on one game. All those people who spend $5 don't matter. That's the free-to-play business.
[1] http://developers.kongregate.com/blog/newbie-to-big-spender-...
That's a lot of raw data and not a whole lot of specifics. Here's a dissection of how one particular massively popular F2P game (Clash of Clans) gets people to pay up:
http://gyrovague.com/2013/06/05/time-is-money-how-clash-of-c...
HN discussion: https://news.ycombinator.com/item?id=5825158
That's two years old now, but it's interesting to see some of the points in there validated by Kongregate's research: eg. how guilds primarily serve to exert social pressure, and how UAE and Kuwait have ridiculous whales (average spend per playing user $500!).
http://gyrovague.com/2013/06/05/time-is-money-how-clash-of-c...
HN discussion: https://news.ycombinator.com/item?id=5825158
That's two years old now, but it's interesting to see some of the points in there validated by Kongregate's research: eg. how guilds primarily serve to exert social pressure, and how UAE and Kuwait have ridiculous whales (average spend per playing user $500!).
This is the best source of numbers I have found in the industry. Especially the CPI numbers and 6 months of buying installs before it paid off.
There is an interesting article on how F2P monetisation works:
http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...
http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...
South Park had an excellent episode explaining freemium games: http://southpark.cc.com/full-episodes/s18e06-freemium-isnt-f...