Unlocking Growth The Power of Outsourcing for CPA Firms
Ethics of free to play games
1. Whales, True Fans and the Ethics of
Free-to-Play
Nicholas Lovell
GAMESbrief
Develop Liverpool
November 24th 2011
2. Nicholas Lovell, GAMESbrief
• Author, How to Publish a Game
• Director, GAMESbrief
• Clients include Atari, Channel
4, Channelflip, Firefly, IPC, nDream
s, Rebellion and Square Enix
• @nicholaslovell / @gamesbrief
4. Show offer: Get 80% off
• Go to www.gamesbrief.com/store
• Enter code DEVELOP
• Get How to Publish a GAME for
80% off:
• Digital: £99 £19.80
• Physical: £149 £29.90
• Both: £149 £29.90
15. Free has been hugely successful
• Zynga:
• filed its S-1
• $600m + in revenues
• Valuation expected >$10bn
• Tiny Tower:
• 2 men, four months
• Currently #12 in the top grossing chart
• Conservative estimate: $3m revenue
in first 12 months
• (PS: # 1, 3, 4, 5, 6 are free too)
• Bigpoint
• €200 million in revenue
• €650 million valuation
16. Free is a marketing technique
• Free means you have a lower barrier to entry
• Free means more people try your game
• Free gives you players; players are potential customers
• It’s all about the conversion from free users to revenue
generating users
• If you are not free, you are competing with free
• Advertising-funded
• Pirated
• Free from someone else
18. The price/demand curve
• In an era of physical
PRICE
distribution, you need to set a
single price
• For games, around $40
“It’s great
value, I’d have
paid much more”
“That’s too
expensive for me”
Demand
19. Now we let users set the price
• Hypothesis: Allow users to choose how
PRICE
much they spend on your product, and
your revenues will go up
DDO revenues up 500%
LOTRO and Everquest II showed a
similar story
$3
$5 $5
$1 $5 $3
$10 MMO
$3 $3 $3
$1 $5 subscription
Demand
21. Allowing users to choose how little to pay
is not the secret
• We all knew that 95% of users played for
PRICE free
• We now know that 80-90% of revenues
come from 0.5% of users
Spending $50 - $10,000 or more
Demand
Paying: 5% Free: 95%
80-90% of revenue from 0.5% of users
22. Making it pay
• The 10th Drone from
DarkOrbit
• Sells for €1,000
• 2,000 sold
• That’s €2 million in
revenue
• In 4 days!
23. The Nine Inch Nails Example
Ghosts I – IV Ultra Deluxe Edition: $300
PRICE
Ghosts I – IV Deluxe Edition: $75
Ghosts I – IV physical: $10
Ghosts I – IV digital: $5
Ghosts I: $0
Demand
24. The rule of 0-1-100
• Make it enjoyable for people to play for free for ever
• Make it easy for people to spend $1
• Make it possible for people to spend $100 per month
29. F2P = evil (or not)
• The business model is designed to take money from you
• So is the coin-op, or the MMO, or the DLC
• Games are a business – we should always remember that
• Some people spend lots of money on it
• You get lots of content for free
• Instead of paying for access, you pay for the experience that you
VALUE
• They’re not real games
• Grow up.
• Oh, and the games will grow up too
• They don’t have enough skill / fairness / challenge
• Well don’t play them then
• Just because you don’t like them, doesn’t mean they are evil
30. Some valid concerns
• How much money is it ethical to take from a single
player, in a single month?
• Are microtransactions appropriate for children?
• Are there certain games that aren’t suited to free-to-play
• I say no
• There may be some players who aren’t suited to microtransactions
• Free-to-play games that are just operant conditioning
chambers (“Skinner boxes”) are likely to stop working
32. Whales versus true fans
• True fans spend money because of what you do
• Whales spend money because of who they are
• This is not a perfect distinction
• Make high-value content and consumables THAT YOU
BELIEVE IN
• Hold your head up high
34. Conclusion
• Free-to-play doesn’t have to be exploitative
• Sell things that players value – these don’t have to be
expensive to make
• Be generous
• Seek out true fans, not whales
• Make games you can be proud of
