Popular, well developed and regularly updated; these are not words you would commonly use to describe a free digital product. However, this is commonly the case. The f2p (free to play) model is not only hugely popular but profitable to boot. Popularised by online games in the late 1990’s, particularly MMO’s (Massively multiplayer online games) such as Neopets and Maplestory, f2p is fast becoming the norm for PC games. Executive Editor at IGN.com, Charles Onyett, even claimed that ‘expensive one-time [game] purchases are facing extinction’.
The f2p model is not only applicable to PC games. With the advent of smartphones, the f2p model has gone on to include a slew of social mobile applications (social and gaming to name but a few) that allow their players/users to play/download without paying.
But how do they make money? There are two main ways, micro-transactions and some form of membership. Essentially, both methods aim to make you pay to improve your experience of an application/game, usually by adding additional content.
Does it make business sense?
One example cannot provide sufficient evidence in support of the f2p model but it at least will show how f2p can be used to best effect:
League of legends, a free MMO which has completely embraced both f2p and micro-transactions models recently became the most popular PC game in the world. A popular free game? Perhaps not so surprising; however, league of legends is making some serious money. In 2010 their estimated value stood at $250 million a sum which has likely increased in line with their popularity. It is obviously a great game, but would it be so popular if it was not free? No.
Is it only games which can benefit from the f2p model?
Gabe Newell giving a rare interview at Casual Connect, an annual video game conference in Seattle, gave a fascinating anecdote of a conversation he had with Adobe over adopting a f2p model (akin to those used in gaming) for Photoshop:
We had ‘conversations with Adobe, and we said the next version of Photoshop should look like a free-to-play game, and they said, ‘We have absolutely no idea what you are talking about, but it sounds really bad.’ And, then we say, ‘No, no, no. We think you are going to increase the value being created to your users, and you will create a market for their goods on a worldwide basis.’
Now, Photoshop is expensive and can cost thousands of pounds, so perhaps Gabe was jumping the gun here – especially considering he went on to talk about $70,000 wearable computers. Nevertheless, I do believe that f2p is the way forward for digital software and games alike. What do you think? Could the f2p model make the transition from games to other digital products?
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