Greedy Goblin

Wednesday, September 21, 2011

Why free2play is rising?

The community if full of the news that the fixed subscription model, first time in its existence has decreased while free to play (microtransaction) model increased by 24%. One could say it's merely WoW's decrease, as WoW alone has more than half of subscribers. However it can be the other way: WoW is failing because of the problems inherited with its subscription model.

To understand the problem we have to recognize two basic points. At first, every endgame is PvP. The PvE players want to get higher on the charter. Even the pet collectors try to show off their rare pets, what are rare because others don't have it. You can dampen the PvP aspect, you can help the ones behind, you can add more content to explore, delaying the endgame for the more casuals, but eventually in all games the player will have to encounter the endgame that is PvP by nature and runs below the slogan of "gtfo noob" (or trivial and people leave in boredom).

Secondly, in PvP somebody has to lose and losing is no fun. While some players play to win or to improve, therefore keep playing after a loss, for the later reward of true victory (which will be fun), most of them want fun now and preferably without effort.
If you consider these, you see the fundamental problem of the subscription model: paying customers are losing the game and not having fun. In the microtransaction model it's not true: the paying customers are winning the game and the free-to-play ones are losing it. The paying customer is buying the opportunity to "pwn" with real money, while the free player is paying by "being pwned" for the free content. The "95% is not paying" issue is a necessity in these games. A game where half of the players are paying, a non-payer would lose every single encounter. If only 5% pays, most of the time they are encountering other free-to-play ones in equal combat (where the word combat is meant loosely, including "meeting with someone front of the AH with cooler pet").

What we failed to notice is that the microtransaction model is favored by the "play for fun" people exactly why we hate it: the "pay to cheat" model. They want to pwn and they are ready to pay for this experience. The subscription games have to fall because they are fair! Blizzard tried every possible combinations: grindy endgame, "read EJ" engame, easy endgame, arcade endgame, and nothing worked, simply because half of the paying customers - by definition below average - are behind the curve, "noobs" and this is not fun. The "terrible" free to play games are rising exactly because they are "terrible": unfair, letting skill and effortless players win just by paying more.

PS: of course the nature of the game remains hidden front of the average player, he honestly believes that he wins because he is "l33t" and not because he is paying for unfair advantages and his victims are mostly moneyless children.


Philips Shadowheart said...

How do the morons and slackers get enough money in real life to pay for their cheats?

I mean, clearly the priority goes on paying food and lodging and other living costs.

Are they really morons in real life if they can manage enough money for that?

Anonymous said...

I haven't really payed any microtransaction games, but what I remember is that they balance around time invested, not so much cheats. You can either grind for stuff or pay for it, but everybody has basically the access to the same features. The rich players just do not have to invest ridiculous amounts of time to get a specific item.

At face value, this has always sounded fair to me. If this changed, I have no incentive whatsoever to even try one of those games.

Clockw0rk said...

I don't know about all games out there but for the most part in my experience the amount by which one can "pay to win" is really limited in most microtransaction games that I have seen...usually microtransactions let you skip the grind or bypass it but rarely do they offer a large advantage (that would let a "scrub" beat a "pro" effortlessly).

The assumption that all games are by nature PvP is false; Spiral Knights for example, it does have some side-PvP that has been added recently but the main focus of the game is the dungeons...which are randomized and there's no real hardcore raids to be challenging...people play it just because it is fun.

There is a large crowd of people who play games just to enjoy playing them...whether it is the simulation, immersion or just gameplay, that genuinely do not care how high they are on the World raid rankings roster or how high their Arena rating is. They might actually enjoy just leveling an alt to see the game from a different class/race/faction perspective and don't feel even a shred envy when they see people in 378+ gear. The people I know with pet collections don't seem to care if someone else gets a rare pet; they had fun making their collection (this does not mean that ALL pet collectors feel this way, but some).

That said, I think another reason for the rise of Free-to-Play is the "try before you buy" mentality. Games are getting more expensive, Modern Warfare 2012 is going to be at least $60+ when a few years ago they were $50 and had a demo released beforehand. Getting a traditional MMO means dropping $50 on the game and paying a subscription fee; some people don't want to take that risk. Free-to-Play offers a viable alternative to the money conscious; they can try the game and if they enjoy it they can spend some money on it; bringing back the idea of a "test drive".

I've yet to run into a player in any F2P game who got into it specifically because he could spend money to win...if he even could.

Jana said...

@Philips Shadowheart

It's not about how do they get money, it's about possibility to buy ingame power for real money.

In WoW, you can't really buy much for real world money legally.

In so called F2P social games, one can just throw $200 and get 10x more "power" than the average.

And the definition of M&S does not involve a point about not having IRL money for stupid uses.

Gevlon said...

"skip the grind" isn't different from "skip the period when you are inferior".

Read tomorrows post.

Alkarasu said...

@Philips Shadowheart
How do the alcoholic always have the money to get drunk, while not always having money to get something to eat? I know people, who claim, that they are poor and, therefore, can't play p2p games, but at the same time, spend many times more in some f2p RMT-shop. People tend to lie, to themselves too.

Azuriel said...

Personally, I think F2P games are the iPad to WoW's laptop sales.

Besides, I think the primary issue is one of time competition at this point. You can go grind some dailies in a game you've played for years... or you can play no less than a half-dozen shiny new F2P MMOs. Not to mention the world of $0.99 game apps, indie/75% off deals on Steam, and so on. The more time you spend playing games other than WoW, the less the $15 sub makes sense (even if it ends up being cheaper in the long run than F2P traps).

Uthane said...

I'd like everyone, including you Gevlon to watch the following video on youtube:

It gives you whole new perception on the Free 2 Play system.

I don't think I need any additional comment simply because the video says everything about F2P + Microtransactions system.

Kort said...

I feel like a mixed model could also work.

To stay in the game, you would have to pay x monthly. You could do it by paying a subscription fee or doing enough microtransactions every month.

You couldn't buy otherwise unobtainable power upgrades for pvp (to keep it fair, balanced and competetive on the top ratings) because pvp gear has to be grinded in game, or you could just start a fully equipped char with best pvp gear from the start, either for free (like in GW2, where you will be able to pay only for cosmetic visual upgrades) or have to buy it as a microtransaction once a season.

For pve content a normal microtransaction model could work if it was kept on reasonable level of balance.
Again, you either pay to save time or for vanity, but that's probably the leading model in f2p mmos. It's a matter of balancing the time cost of the grind with how high the fees are for bypassing it. The only thing that worries me is that in the end you will pay more in a "f2p" game than in a subscription based one.

chewy said...

I agree with some of your analysis.

Your reference site points to another "headline" site eurogamer which in turn mentions the actual report by screendigest. Unless they (or you) have purchased this report then it's only the headlines they are reporting.

Personally I suspect that the transaction based growth is because (as Azurial points out) the growth in portable devices such as phones and ipads is overtaking the laptop and desktop market. Micro transaction gaming is more prolific on these devices, ergo there is a market growth of this game sector.

Blizzard revenue is not declining per se but their market share % is declining because they're competing in a diminishing market sector.

Anonymous said...

Why cant wow just lose players because of its age?

Tell me 1 Videogame, that has substained or raised its player base over 10 years!

As far as i know, not a single game managed even what wow did.
Every game is getting boring over time.
If that wouldnt be true, why do you buy new video games?

I have no studies to backup but even sports, that some people play for their whole life, would get boring if they were single player ;)

You say that wow tried everything. I say, wow always delivered the same! For years!

Anonymous said...

f2p reaches the guy who dont want to spend a penny on a game and also reaches the guy who want to spend thousands of euros on a game..

on a subscription based gamed you just reach the guy who want to spend exactly 13.99 a month.

So thats why f2p is rising... its simply the better buisness model.

Anonymous said...

also the companies who run these f2p games dont live from microtransactions they live from investor money.....for example you can say to an investor i got each month 250k matter how many really play that game these are impressive numbers and investors will give money to you...... and with this money lets say 10million euros you can do alot of things ;)

Anonymous said...

so...sorry for part 3....all you ave to get is attention of people who are willed to register at your site....if they stay and pay ...good but more important is the number of new registrations each month...based on that the investor money will flow.

Fex said...

tales of fantasy, gear being sold that isn't available through grind and better then any alternative, faster mounts, cooler looks, double exp gain potions aswell.

Evony ( original dunno the new version )

Pay for 50% armour on your whole army, Highest lvl building, scrolls allowing to send 20% more troops per attack, potion for a weekly buff, ( -50% losses from battle ) pure resources.

Of these the only two "grindable" items are the buildings and the resources. The rest is unavailable except from luck, wich is just a way to hook you to the gameshop. You get to spin a wheel, win a prize, might be gameshop currency or any of the items sold there.

every other f2p i've ever played has at endgame significant upgrades that cannot be obtained without buying them, and are gamebreakingly overpowering.

I play without them, and i'm really good at the strategy type mmo's I managed to dominate a server for months. whole alliances couldn't take me down. Untill one guy showed up. He had no knowledge of the game, just money. His first attacks all failed because he wasn't sending optimal troops. He made tons of mistakes, but he used all the store bought buffs. And he was persistant, Spending 200 - 300 $ on the game each day. ( Can tell how much since some of the items show up in combat logs, and they're 1 use only. Just those items cost him that much allready )

He kept going, and in the end his store stuff won him the game. He could make 50% more troops per hour then i could. He was taking half the losses. His troops had more armour reducing his losses even more. They had more attackpower, killing more of mine. He still screwed his attacks up, He never found the optimal spread ( wich btw is right on the forums ) All he did was power through with his money and rely on that to win.

F2P is unbalanced as hell and im not going back to it. I'd rather pay 30 bucks a month to play a balanced game, even if it means i can't go to raid, since i'm not good enough. Then play a game where someone can simply buy advantage over me.

Fex said...

anonymous, invester money doesn't flow based on sub numbers. They don't give a rats ass, they want their money back with a profit. If your company isn't turning over revenue at a profit the investors are just part of a ponzi scheme and the thing collapses eventually.

For every dollar invested in your company the investors expect at some point in the future to get a dollar. In fact they're banking on the fact that theyll get 1.30 dollar. That money needs to come from a source outside of investors. EG the microtransactions.

Coralina said...

I totally disagree. It is not true that Blizzard tried everything and nothing worked.

Although “Wrath” is a dirty word on the official forums and amongst elitists in particular it was a massive success both commercially and in terms of raw numbers.

ICC was a perfect example of how M&S or casuals farmed their 4 to 9 bosses each week and didn’t therefore “lose”.

Also despite the big talk on the forums the HC modes provided a good challenge for hardcore players. With the exception of a few bosses (Marrow and Lootship spring to mind) the success rate percentages on HC bosses was right in the middle of the ball park for what I would call optimum tuning (Cataclysms one mode for 5% and one mode for 95% is not commercially optimum). The only problem was that the tier went on for six months too long.

Blizzard extracted maximum value from every piece of content both from casuals and hard cores alike because all types of players were utilising the content in one way or another. Every development dollar was incredibly profitable in terms of keeping as many players subscribing.

The sales of a new expansion are indicative of the popularity of the previous expansion. Cataclysm gained record sales which meant that a record number of subscribers were extremely content with Wrath and wanted more of the same.

Let’s just emphasise that – following their experiences during the previous 2 years, record numbers of people were prepared to go out, dip their hands in their pockets and slam down £25 on another WoW expansion in December 2010. More than had bought any other expansion at launch.

Does that sound like a model in decline and losing out to F2P?!?!?!?!??!?

Had Cataclysm kept the Wrath formula I have no doubt that we would still have in excess of 12 million subscribers and they could have added even more to that.

We wouldn’t now be having this debate about the decline of subscription games and the rise of free to play. There is no problem with WoW and its subscription based model. The problem rests entirely with the content and tuning of Cataclysm. It is as simple as that; talking about subs v free to play and people buying pwnage or M&S being upset about losing is just over complicating the issue unnecessarily.

The decline of WoW subscriptions happened suddenly at the point when players dinged 85. The games prospects reversed almost over night. It was just like how the dinosaurs died out; so suddenly that it must have been due to a single big event. If competition from F2P was the issue the WoWs decline would have happened more gradually and not mysteriously 3 weeks after the launch of an expansion with a notoriously exclusive end game that was targeted at a miniscule minority of subscribers.

It is so obvious.

Anonymous said...

f2p works cause irl money is distributed very uneven. The guy from eve who constantly bough titans (biggest baddest ship costing 1000 $)
would be a prime example. For every thousand poor players there is one who can shell out more than they would all together with a normal subscription

Regarding wow droping numbers you just make assumptions. You cannot prove it. I for one would rather blame it on wow being 6 years old and getting stale while other fresh games come out.

Anonymous said...

@Fex: The company i work for is worth like 500 Million US Dollars and one if not the biggest company in europe.... sure there are games that are established and kind of cash cows....but the most profit comes from complex investments and tax chess*

Every euro earned is goin into new projects to keep the whole thing running...and its getting bigger and bigger....and investor money is a big part of that.

chewy said...


Does that sound like a model in decline and losing out to F2P?!?!?!?!??!?

Go and read the report or as much of it as anyone not purchasing it can read. The links are in my post above.

The point is not that WoW is losing money relative to it's own value but that the growth in the whole gaming market is being driven by F2P.

"MMOG/MOG segment to grow from $2.7bn in 2010 to $3.1bn by 2015 "

"The microtransaction sub-segment will drive growth in this market during the next five years. "

Gevlon is speculating about why the growth is more prolific in F2P.

Anonymous said...

EVE's buy to play scheme has always been through the PLEX system. And is still quite a way different from other F2P microtransaction schemes.

You can't buy a Titan for $1000. You can buy enough isk to buy a Titan (or more likely the materials for producing one) as well as all the modules and fittings that you would use with it. However, each and every one of those things still had to be produced in game which takes a significant investment of time. The Titan itself takes 59 days, 6 hours, and 13 minutes at base to produce. Though people with Level V industry will do it in 47 days, 9 hours, 46 minutes.

In EVE's model, you may be able to purchase the object your looking for right away. However there is all the underlying economic activity that had to occur just to make that object available on demand. Miners had to mine ore. Refiners had to refine ore for the minerals used in products. Mission runners had to run missions for salvage and materials. People had to make copies of the blueprints from which to run these production jobs.

Free2play microtransactions completely bypass all those steps. Instead of buying the materials and production capacity to make a Titan (even if you could buy it right now) none of that underlying economic activity takes place.

Anonymous said...

I agree with Coralina for the most part. If you go from relatively easy normal raiding and easy dungeons and were dropped into the CC using know the fights dungeons, alot of people had bad experiences. What the Hardcore group was actually clamouring for was some sort of Hardmode dungeons imo.

The other issue were bad decisions on the guild leveling and rep. What this said to alot of the people who had been supporting social guilds was that we needed to find a more Hardcore guild since Cata is "Hard" and we want to be there at launch to get rep as quick as possible. This caused quite a few of the collapses of social guilds where people had been enjoying themselves.

The other major problem was that as Dps early in the expansion if you were looking for a dungeon it took about 30 mins or longer. Couple that with an hour long dungeon tuned to a more hardcore playerbase and you remove the casual dps players.

Also the RBG didn't work out how alot of people had been expecting. Most people were expecting some way to RBG as a solo player too with a group of skilled players.

Tol Barad also launched pretty terribly as well. You forget about the circle zerging and how assaulting never won or the win trading that went on.

What the playerbase was expecting was some sort of Harder Dungeons. Shorter length multiple raids for people with only a few nights vs alot of nights to raid. A well designed open world pvp map and RBG for anyone who wanted to pvp steadily in a BG format. We were expecting Deathwing to be trying to kill is out in the world not just once every 3 months in some almost unavoidable fashion. We wanted BG maps that weren't just rehashed ideas from old maps. We wanted to do content out in the world that wasn't just dailies.

Coralina said...

@ Chewy

I know that WoW hasn’t lost value as such. It has lost subscribers which could make investors question its future value/income but they have done a great job of earning more money from less customers with items such as the remote AH and selling mounts etc.

F2P is expanding. It is expanding in terms of numbers of players which is kind of obvious because there is no barrier to entry – anyone will try a free game. The number of “active” players is questionable however but yes I cannot deny that there is growth within the earnings from F2P. Profit per user is questionable due to such a small minority paying and I think the longevity of these games is questionable as well.

I don’t believe that growth has any bearing on the subscription market. I believe they are tapping into a completely different set of customers with a completely different game experience.

F2P competes against other F2P games IMO. With no barriers to entry and with most customers committing very little to whatever game they play at the moment I can see the market being volatile. You can lose your player base over night to a slightly better rival game. If I were an investor I’d be wary of putting money into the development of F2P as it is far too high risk for my liking.

Given that I believe the markets are largely separate, if Subs games are not expanding then that is a problem with subs games. The best subscription game shot itself in the foot but can quite easily correct that. New entries like Rift lack originality and many other sub based MMORPG’s are long in the tooth and slowly dying out. We need some new and original subscription titles to replace the dinosaurs.

I also mentioned either yesterday or today that I felt WoW and the other subs based games had reached saturation point amongst the traditional core market for that type of game – “geeks”. That is by far the greatest restriction that is preventing growth and a lack of innovation isn’t going to help them branch out.

Blizzards move with Wrath was a work of pure genius as they broke out and starting pulling in casuals (non geeks) – I mentioned the 40 year old woman and her sister at work that I got to play and they loved Wrath and had no issues with £8 a month. These were people that in their life to date had played for a few hours on a Wii and never played a PC game before. Blizzard miraculously got them paying £8 a month and playing for a couple of hours every evening! That is an absolutely epic achievement! By opening up that market they raised their subscriber cap from say 11 million to almost any number you can imagine. The marketing in particular was excellent what with Ozzie and Mr T during main stream TV programmes on an evening.

Blizzards mistake was abandoning that market and so they are now drifting back down towards the “geek cap”. Where are the Cataclysm adverts at peak times on TV? Where are the celebrity endorsements?!?! In the UK I see and hear nothing where as at this point in Wrath I had people in my office asking me about the commercials they had seen.

Why have Blizzard stepped away from this? Why did they change the product and the marketing strategy and revert back to the saturated “geek cap”? They didn’t deliberately set out to do this as now they appear to be trying to reverse it.

If F2P is growing quicker maybe it is because those companies are better at the marketing side of things and are responsive in terms of changing the product to suit the customers... As opposed to Blizzards attempt at changing the customers to suit the product e.g. Ghostcrawlers “HC’s are hard, L2P or GTFO” post earlier this year which granted was contradicted the very next day after investors no doubt had a head fit.

chewy said...


"I don’t believe that growth has any bearing on the subscription market. I believe they are tapping into a completely different set of customers with a completely different game experience.

Your comment has hit the crux of the matter. If the market is segregated with little of no cross over then you're right. If, however, the pool is shared and finite then Blizzard should be very worried because people's available money and play time is definitely finite.

As I mentioned in my first post, the growth of new gaming devices and their comparative flexibility is very relevant. You can't play wow on your phone whilst on a train going to work and if you can only afford one gaming cost the most flexible will win. This applies equally to existing and new customers.

Arkonos said...

League Of Legends is, as far as I know, the most successful DotA Clone around.
It's free to play, but you can buy various things:
IP/XP Boosts

Champions can be bought with in game currency which you collect while playing, or with real money.
Buying a champion may give you an advantage the first 5-10 games after the champ is released, nothing worth mentioning.

Skins can only be bought via real money, but are purely optical.

Runes can only be bought with in game currency.

IPs (Influence Points) are the ingame currency and there are booster for it. You'll get twice as much, the duration depends on the money spend. In my experience this does hardly give you an advantage, it just gives you more variety quicker.

XP boosts double the amount of XP you Account (not champion) gain. Since you always get matched up with enemies as strong as you, it has no influence in win/loss. Doubling the XP a Char gains in WoW does not make him more powerful in the BGs either.

Money only helps you to be faster and have more diversity, but does not help you directly in the matches.
You'll profit from a large selection of champions, but by the time you are able to play one, you have collected enough points to unlock the next one.

Coralina said...


If you are tapping into the type of market that F2P targets and the people who play Facebook games then the market is almost infinite compared to the traditional gaming market. I don't believe F2P and Subscription based games COMBINED are even remotely close to that cap.

The recession if anything has helped, less people are eating out, less people are visiting the cinema, people in the UK are becoming more and more reluctant to do anything that involves burning petrol.

Now is the time to capitalise, step up the marketing and get these people into gaming.

I think the mobile gaming thing is a bit of a red herring. The type of products that work on mobile systems are not remotely satisfying once you get home and sit comfortably on a more powerful machine. It works Ok with the mobile AH (a cut down limited access version of a full sized game that works great remotely) and yes it would be great if it was possible to play WoW on my phone so that I could craft, farm or even do some basic dailies. I believe the static AH type system lends itself far better to mobile gaming than the action side of things. For me mobile gaming is better off going down the road of the WoW model where a static spin-off mini game from the real game can be played on the move.

But overall the mobile devices may improve technically but so will full size machines and the gap will always be there. What you can do on a shaky train without getting travel sick from looking at the screen or running the battery low is limited. I am also sick of hearing the promises from mobile hardware makers about solving these issues. Plus I get a neck ache!

Mobile gaming has been over hyped for a long time. My experience has always been that it is lacklustre and second rate. F2P is no differen IMO, it won't go far as I think that business is too unpredictable and will be financially unsustainable. Investors will eventually get wise and then it won't attract the type of budgets required to compete with the subs market.

I still believe there is room to expand the subs game with additional microtransactions but I don't think you can run a AAA title on those transactions alone.

Anonymous said...

This is pathetic. Did you even bother to read the article? "What the Screen Digest report doesn't mean, however, is that individual subscription MMOs like World of Warcraft are losing money. World of Warcraft may actually go on to make even more money as lucrative new regions welcome the game."

I will say though that I am impressed by the lengths you are going to to blame everyone else for the collapse of your "magic" raiding guild. Voice chat, having to move during a boss fight, and now competition from subscription-paying pet collectors. Bravo. Please be sure to remember to blame the pedophiles next week - they're always a crowd favorite.

Anonymous said...

As usual, I agree with Coralina.

Many posters are confusing "losing market share" with "losing money." Much business analysis of the health of the business looks at market share: General Motors was a huge and profitable company for a decade when analysis of GM and Toyota's market share and growth were flashing warning signs of the future.

@Phillips et al: MT are not cheating; somebody has to pay for entertainment: advertisers, subscribers, or RMT transactions. It is certainly understandable that a person would prefer one game financing option and there are good and bad f2p games. But they are not cheats.

EVE Online's RMT is the best I have seen.

Coralina said...


You forget that I level as Shadow/Frost/Fury/Feral Cat then change to Holy/Blood/Prot/Feral Bear at the cap.

I did that in Cataclysm and had no trouble mastering the mechanics for end game even on the healer which had changed dramatically. 30 minutes on EJ reading about stat/spell priority/techniques and I was ready to roll. Ok I had perhaps 3 hours spent in normal dungeons prior to level cap but that is nothing.

You also have misunderstood my main point – I am talking about getting to level cap before other players for an advantage*. The amount of time spent levelling versus time spent at cap is irrelevant. My fault for the wall of text but if you read the full post and not the TLDR you will see why.

End game isn’t considered a time sink because that is the part I personally want to do. Hence when I refer to the grind (I believe this applies to Gevlon too) we are not referring to level cap gaming.

*Those opposed to "pay to skip" are admitting there is an advantage by the very fact that they object.

Anonymous said...

"the fundamental problem of the subscription model: paying customers are losing the game and not having fun."

I think you're right but it's not a problem if they come back. Sub games should be based on the idea that yes casuals, when they finally hit max and have levelled a few alts, will quit. That's fine as long as they come back after six months and do it again.

The RMT people you're describing are the timepoor hardcores. They can't pwn in sub games because they don't have the time so they get the advantages in a F2P game with money that they'd get from time invested in a sub game.

The critical point in the F2P model is there's no incentive to create content in depth as the paying players don't have the time to play it anyway - that's why they're paying.