Aug 032013
 

I want to have my cake AND EAT IT!

The recent furore over the “exploitative” practices of certain big-name F2P titles got me thinking. Mainly because I didn’t think they were exploitative at all…

In some instances users (and critics) complained the free stuff wasn’t cheap enough, in other cases it was because it took too long to get free stuff, sometimes it was because it was too expensive to buy everything in the game (seriously, when would you ever manage to grind your way to owning everything in an MMO?!) or my own personal favourite: developers kept presenting them with offers in the hope they’d monetise. The cheek of it! Trying to sell stuff in a game which relies on users buying items!

I was genuinely taken aback at strength of the feeling expressed in some of the reviews, and by the sense of entitlement some gamers seem to possess. It’s almost as if some people believe game development is this fun hobby, where everybody gets magically paid by the benevolent CASHLULZ fairy and you should never, ever monetise.

 

My story

I came to make F2P by accident, much in the same way I suppose most others do.

Lured by the chance to live somewhere new, take on a new challenge (and potentially earn more money than I’d ever earned before), I strolled into the studio on my first day assuming that I was there to kick ass and take names. Making F2P browser games would be easy given that I’d spent the past few years making “real games”. You know, like the ones proper gamers play on consoles.  Surely making that F2P “rubbish” was easy, right?

Wrong.

I was in for a very rude awakening.

Just your average F2P Producer having a typical day at work.

A brief history of F2P

F2P has its roots in South Korean Internet cafés. Back in the 90s, developers found that café owners refused to buy multiple copies of the same game, instead installing multiple copies off one disc. This made developers begin to consider how to get paid for their work despite café owners buying a single copy for potentially thousands of users. Rather than adopt the same heavy-handed, ass-backward tactics employed so successfully by the film and music industries, game developers embraced the opportunity offered by the Internet cafés and forged a symbiotic relationship with them. Today, revenue sharing and promo deals between developers and chains of Internet cafés are commonplace throughout Asia.

F2P has gone on to become the dominant business model throughout Asia (in no small part due to the rampant piracy in China and throughout South East Asia – making retail games for the domestic market in this part of the world is basically a waste of money). It also grew in prominence in Europe and the Americas throughout the 2000s to the point where its influence is pretty much inescapable, regardless of your platform of choice.

F2P offers a “golden ticket” to developers. Safe from the clutches of piracy they can make a game with a team a fraction of the size of what would be required for a AAA current-gen game, which attracts millions of downloads and monetises every paying user multiple times what they would normally get per user, on an on-going basis for several years. Just to reiterate, that’s fewer people working on a game, more people playing and more money per paying user.

Some games have been known to make in excess of €10,000,000 a month. Anyone in the industry who thinks F2P is a “fad” which will soon pass, is basically an idiot.

 

How the sausage is made

At risk of stating the obvious, F2P relies on making the user feel the urge (or need) to part with real money in exchange for virtual currency or in-game items.

Most users don’t just open their wallets out of sheer goodwill if they happen to like a game. Developers have to offer users something which is worth paying for, and if users won’t pay, then you may as well start thinking about packing up and flipping burgers. This is when things start to get a little murky…

The easiest way to get users to part with their hard-earned cash (especially in a PvP game) is to sell them an advantage over non-payers. Users want to be the best, and if paying a few Euros for a new weapon or a boost will give them an edge, then a percentage of players will pay (what’s more, once they have paid once they’re far more likely to stick with the game and keep investing over time…) This is where the whole spectre of “Pay 2 Win” raises its ugly head and reviewers (and hardcore gamers) start frothing at the mouth.

I personally see “fairness” as a spectrum, rather than a binary value (the belief that a game is either fair or its not). At one end of the spectrum, you have games like LoL which does sell power, albeit in a way which isn’t necessarily game-breaking. These games make non-paying users feel like they have a chance to be competitive, but if you get two users of equivalent skill and one is using paid gear and the other free gear, the pay user will almost always win. How “fair” then is this?

Whilst at the other end of the scale you have games which will allow you to outspend your opponents, to the point where defeat is pretty much impossible against non-paying users.

I liken good F2P monetisation to owing a football pitch. Anyone who wants to can come and play and enjoy themselves, but they’ll be playing with the most basic gear. If you want a good pair of boots then that’ll cost you. Sure it’ll give you an edge over other players, but if you suck at football, then you’ll still suck. The boots won’t make you a superstar.

Likewise, if you want to train to get better over time you can. You can even purchase a boost which means you’ll get just as good in half the time! You’ve not bought an advantage at this point (you still have to invest your time and train), but you have decided that a few hours of your time is more precious than a few Euros. The whole “Pay to Win” argument boils down to this as far as I’m concerned: If the user can buy the right gear to be competitive by investing time into the game then it isn’t “Pay to Win”. It’s a cost/benefit analysis the user makes – which is worth more to me: time or money?

Truth is that having an insider’s knowledge of “how the sausage is made” has made me weary. The perspective I gained working in different places over the past few years and analysing dozens of competing products means I can spot “classic” F2P tricks (reward removal, mad difficulty spikes, pay walls, etc.) a mile off. I only play a couple of F2P games in my free time now (unless I’m doing research). As anyone who’s ever worked for a butcher will tell you, knowing “how the sausage” is made can mean you don’t necessarily want to eat it.

 

The new wave of F2P

The numbers posted by F2P games over the past few years have not gone unnoticed. Keen to be part of this exciting cash tsunami, traditional AAA publishers and developers have mobilised their forces to try and get in on the act. It’s only a matter of time until large franchises which don’t have a F2P spin-off will become the exception. EA wedged the door open to console gamers with the excellent FIFA: Ultimate Team, Team Fortress 2 going F2P showed just how smart Valve are, and some great titles have followed since such as Tribes, Planetside 2 and of course, Ghost Recon: Online.

Unfortunately, many of this influx of developers seem to be coming to the party with the same outlook I had when I started off in F2P years ago. Perhaps it’s no surprise then that implosions and botched/canned F2P games seem to be commonplace across all platforms at the moment.

 

Arrogance and the price of failure

The two most common mistakes you see from traditional AAA devs who move in to F2P are a belief that they just need make an awesome game (and users will just basically donate their money through sheer goodwill and engagement) and that they’re still “game developers”.

The first point is unfortunately not true. Most people don’t like handing over money and most users would pirate your game if they could, particularly on PC where the piracy rate for some franchises has been reported to exceed 80-90%. Users need an incentive to monetise, so if you focus on making an awesome game and treat monetisation as an afterthought, then the chances are the critics and players will love you, but the financial director and studio bosses won’t. The problem is you can’t make or sustain a game without those folks…

As to the second point, you’re no longer in fire and forget mode. The game will probably go on for the next 5+ years (if you do a half decent job) and your job will be one of providing a 24/7 service and content which can engage players over months and years. That’s a whole new set of challenges.

For Producers and Studios coming to F2P for the first time, here are some of the fun realisations I’ve come to over the past few years.

  • Perhaps the most interesting thing I’ve come to realise over the past few years is that users are not price sensitive. I just want you to dwell on that for a second… Users are not put off by a price which in some instances will exceed the cost of a regular retail game. Most users are in fact, proposition sensitive. If the perceived value of an offering is strong enough then they will gladly hand over multiple times the amount it would cost to buy a “full game” at retail. In fact, it’s not unheard of for users to spend upwards of four figures to get rare and powerful items. Though whether you feel morally comfortable charging your users that much for in-game loot is another matter altogether…
  •  As mentioned above, online F2P games are not just games in the traditional sense, they’re a service. That’s a live service where every hour of uptime is worth thousands (and in some cases – tens of thousands) of Euros. “Owning” such a service can be 24/7 nightmare that requires you to forget previous notions of “work-life balance”.
  • The worst thing you can do when you’re under revenue pressure is check the in-game revenue multiple times a day. However, others will do this and ask explanations for random revenue fluctuations up to multiple times a day.
  • When staff are let go for poor product performance (not enough growth or revenue), it’s normally the culmination of several years’ worth of bad decisions, with the bulk of the decisions having been taken by people who have since moved on or are too senior to fire.
  • Accurate KPI analysis (not reporting, there’s a great deal of that around…) is difficult and if you’re working with an analyst who doesn’t know your game intimately it can lead to damaging results. In some instances this can even cause the team to take a course of action to correct a flaw that doesn’t even exist! In one example, an analyst made a very strong (and inaccurate) statement about a system and its financial impact, postulating a theory of why almost all users bought a certain item. This was because the analyst didn’t play the game and wasn’t aware of the in-game rewards – the item was a gift all users got. Make sure you have an analyst who doesn’t find the game “too hard” to ever find the time to play or understand.
  • Depending on your audience, gameplay can be of less importance to your users than the fact the game is free and features a chat window. I know this may sound cynical, but some very successful browser games are little more than an online chat with a shop. You have to be honest with yourself if this is the case, and give your customers features they want rather than wasting time building complex systems that they won’t use.
  • As a Producer/Product Manager, you will regularly be asked to deliver additional short-term gains “without doing anything which will impact next month’s revenue or future growth”. Unfortunately, these are usually at odds with each other. If you had a way of pulling an extra 500,000 Euros out of your ass you’d have probably used it.