Every week, my friend and I get together to play Star Trek Online (STO), a free-to-play (F2P) massively multiplayer online role playing game (MMORPG). I play as a Bajoran science officer and my friend plays as a liberated Borg. We explore planets, fight Cardassians, and trade items on the exchange at Earth Spacedock. Even though we play on the same team, my friend has invested hundreds of dollars in the game, whereas I have not paid a single dime.
My friend is fanatical about Star Trek (the music for his wedding procession was the theme to Wrath of Khan), so he’s happy to spend $300 for a lifetime subscription, even when he could just play the game for free. His payment provides access to premium features that improve his character’s performance (weapons, etc.) and appearance (uniforms, etc.). He was paying a monthly subscription before the game was free to play, so if he plays for more than 20 months (which is a good bet) the lifetime subscription saves him money.
As for me, there was no chance I was ever going to subscribe to this game. Zero. The only reason I am running around the Alpha Quadrant armed with a bat’leth is because Cryptic Studios, the game developer, lowered the entry barrier for casual gamers like me. The more I play though, the more tempted I am to pay real money for some “ZEN” which I can use to buy my crew an Oberth Class Light Science Vessel.
STO wasn’t the first game to abandon up front subscriptions in favor of in game micro-transactions. In Buy Products or Get Rewards, we noticed a sharp distinction between EA and Zynga business models. EA’s revenue source was from players who had to buy the game before playing. Zynga let anyone play, relying on users to submit micro-payments during game play as its revenue source.
It now appears that EA is changing its mind. According to CNN, EA is dropping it’s pay-to-play model for Star Wars: The Old Republic (SWTOR) in favor of a free-to-play model with in-game transactions. As with STO, gamers have the option of subscribing to the game in order to access premium features from the start.
The F2P tactic isn’t philanthropy. Game developers invest tremendous amounts of resources creating their products, and it’s not in order to provide people with free entertainment. It’s to make money and increase profits. And the F2P games are doing just that.
According to CVG, in the time since Valve removed an upfront revenue stream in favor of in-game micropayments for Team Fortress 2, “the amount of cash TF2 is bringing in for Valve has increased by a flabbergasting 12 times.”
Analytics company Flurry determined that just in the past six months, Apple’s App Store garners almost twice the amount of revenue from freemium games as it does from premium games.
When it comes to games or any other digital product, you’re going to have customers who will use your product or play your game no matter what kind of payment barrier you throw their way. These are your fanatics.
But freemium works best when casual users are exposed to the value of your program through using it. They become hooked on the product, which paves the way for micro-transactions or subscriptions.
This is the lesson for software developers and ecommerce managers: The product you sell upfront is not the same product that users use for free. For example, when users previously paid for SWTOR they gained access to the whole game and all its potential features. Now that the game will be free to play, product and ecommerce managers must restrict access to certain elements of the game that were previously unrestricted.
Your fanatical customers will still want to pay for your product. Every bit of it. As for your casual users, take a lesson from EA and Cryptic. If casual users can’t get a taste of the value of your product before they have to cough up cash, they will simply find a company that allows them that free taste.
More and more consumers expect to be able to use your software for free. If you don’t want them abandoning your product in favor of a free one, create a way for consumers to engage with your product.
Tell us how you might convert your pay to play product to a free to play in the comment section below.