Game mechanics[edit]
In-game items can be purely cosmetic, enhance the power of the player, accelerate progression speed, and many more. A common technique used by developers of these games is for the items purchased to have a time limit; after this expires, the item must be repurchased before the user can continue. Another commonly seen mechanic is the use of two in-game currencies: one earned through normal gameplay, and another which can be purchased with real-world money. The second, "premium" currency is sometimes given out in small amounts to non-paying players at certain times, such as when they first start the game, complete a quest, or refer a friend to the game. Many browser games have an "energy bar" that depletes when the player takes actions. These games then sell items such as coffee or snacks to refill the bar.[6]
Free-to-play games are free to install and play, but once the player enters the game, the player is able to purchase content such as items, maps, and expanded customization options.[7] Some games, such as id Software's Quake Live,[8] also use in-game advertising to provide income for free-to-play games. In addition to making in-game items available for purchase, EA integrates in-game advertising into its games. In August 2007, EA completed a deal with Massive Incorporated, which lets Massive update and change in-game advertising in real-time within EA games.[9] Independent game developer Edmund McMillen has claimed that he makes most of his money from sponsors by placing advertisements into the introduction of a game and the game's title screen.
History[edit]
Matt Mihaly created the first known business model of exchanging virtual items for money in an online game, in 1997 for the flagship title Achaea, Dreams of Divine Lands for his corporation originally Achaea LLC that later became Iron Realms Entertainment.[10] The free-to-play business model in online games was later realized by Nexon in South Korea to a degree first catching more major media attention at the time.[11][12] The first Nexon game to use it, QuizQuiz, was released in October 1999. Its creator Lee Seungchan would go on to create MapleStory.[13]
The free-to-play model originated in the late 1990s and early 2000s, coming from a series of highly successful MMOs targeted towards children and casual gamers, including Furcadia, Neopets, RuneScape,[14][15] MapleStory, and text-based dungeons such as Achaea, Dreams of Divine Lands.[16] Known for producing innovative titles, small independent developers also continue to release free-to-play games.
Free-to-play games are particularly prevalent in countries such as South Korea and the People's Republic of China.[7][17] Microtransaction-based free-to-play mobile games and browser games such as Puzzle & Dragons, Kantai Collection and The Idolmaster Cinderella Girls also have large player populations in Japan.[18] In particular, the Nikkei Shimbun reported that Cinderella Girls earns over 1 billion yen in revenue monthly from microtransactions.[19] Electronic Arts first adopted the free-to-play concept in one of its games when it released FIFA Online in Korea.[9]
In the late 2000s, many MMOs transitioned to the free-to-play model from subscriptions,[20] including subscription-based games such as The Lord of the Rings Online: Shadows of Angmar, Age of Conan: Hyborian Adventures, Dungeons & Dragons Online,[21] and Champions Online.[7] This move from a subscription based model to a free-to-play one has proven very beneficial in some cases. Star Wars: The Old Republic is a good example of a game that transitioned from subscription to free-to-play.[2] Turbine as of September 10, 2010, has given an F2P with Cash shop option to The Lord of the Rings Online which resulted in a tripling of profit.[22] Sony Online Entertainment's move to transition EverQuest from a subscription model into a hybrid F2P/subscription game was followed by a 125% spike in item sales, a 150% up-tick in unique log-ins, and over three times as many account registrations.[23]
The movement of free-to-play MMOs into the mainstream also coincided with experimentation with other genres as well. The model was picked up by larger developers and more diverse genres, with games such as Battlefield Heroes,[9] Free Realms, Quake Live and Team Fortress 2[8] appearing in the late 2000s. The experimentation was not successful in every genre, however. Traditional real time strategy franchises such as Age of Empires and Command & Conquer both attempted free-to-play titles. Age of Empires Online was shut down in the midst of a tiny player base and stagnant revenue,[24] and Command & Conquer: Generals 2 was shut down in alpha due to negative reactions from players.[25]
In 2011, revenue from free-to-play games overtook revenue from premium games in the top 100 games in Apple's App Store.[26] The percentage of people that spend money on in-game items in these games ranges from 0.5% to 6%, depending on a game's quality and mechanics. Even though this means that a large number of people will never spend money in a game, it also means that the people that do spend money could amount to a sizeable number due to the fact that the game was given away for free.[26] Indeed a report from mobile advertising company firm SWRV stated that only 1.5 percent of players opted to pay for in-game items, and that 50 percent of the revenue for such games often came from just ten percent of players.[27] Nevertheless The Washington Post noted that the developers of two such games, Supercell (Clash of Clans) and Machine Zone (Game of War: Fire Age), were able to afford Super Bowl commercials in 2015 featuring big-name celebrities (respectively Liam Neeson and Kate Upton).[27][28] The latter, Game of War, was in fact, part of a roughly $40 million campaign starring Upton.
As of 2012, free-to-play MOBAs, such as League of Legends, Dota 2, Heroes of the Storm, and Smite had become among the most popular PC games.[29] The success in the genre has helped convince many video game publishers to copy the free-to-play MOBA model.[30][31]
During 2015, Slice Intelligence tracked people that bought products in mobile video games, and these players spent an average of $87 in free-to-play games.[32] The highest spending per player in 2015 was in Game of War: Fire Age, where the players that bought products on average spent $550.[33]
Outlook[edit]
Pointing to the disruptive effect of free-to-play on current models, IGN editor Charles Onyett has said "expensive, one-time purchases are facing extinction". He believes that the current method of paying a one-time fee for most games will eventually disappear completely.[7] Greg Zeschuk of BioWare believes there is a good possibility that free-to-play would become the dominant pricing plan for games, but that it was very unlikely that it would ever completely replace subscription-based games.[17] Developers such as Electronic Arts have pointed to the success of freemium, saying that microtransactions will inevitably be part of every game.[51] While noting the success of some developers with the model, companies such as Nintendo have remained skeptical of free-to-play, preferring to stick to more traditional models of game development and sales.[52] In February 2015 Apple began featuring popular non-freemium software on the App Store as "Pay Once & Play", describing them as "Great Games with No In-App Purchases ... hours of uninterrupted fun with complete experiences".[53][54]