Free to Play Revenue and Player Spending

09 Apr
April 9, 2014

Seen a bit of a buzz around this Gamasutra article about F2P Revenue on my feeds lately.

The gist of the article is that the revenue from F2P games comes from a very small fraction of players (~2.2%). And a small fraction(10%) of those who do pay, make up about half of all revenue made.

Which is interesting, if unsurprising. Now, much of the commentary involves some version of saying “look, see here, here’s evidence of how unhealthy and exploitative F2P is!”


Let me preface this by saying that I’m not the biggest fan of the F2P in the world. My views have softened a bit since I saw it implemented well (I thought), in Dungeons and Dragons Online, and further since I got my Android and started downloading apps, some of which do F2P reasonably, some of which don’t. But I still overall prefer the buy-once, unlock-everything experience.

And I won’t defend the games that are basically gambling, or aimed at exploiting children.

That being said, I’m not sure that those stats are really very much worse than the pay-once market. Everything I’ve read pegs piracy rates, indie or mainstream, at 95-99%. Which means that effectively, only a small core of the people playing your game are paying you, regardless of your monetization strategy.

So is F2P really that much worse (excluding the ones that are a thin layer of paint over a gambling engine) than pay-once?

Of course, we can talk about the other number, how certain paying players are the “whales”, the ones who contribute a disproportionate amount of the income. That isn’t necessarily a bad thing, though.

Take, for example, Kickstarter. Clearly, some people are jumping on Kickstarter projects at the top tiers, which amounts to investing more than any ten other backers. Sure, part of that is the urge to support, but some of it is surely that some people want more of the reward knick-knacks. The extras. The collector’s stuff.

Which is fine. In fact, I think it’s a great idea, offering extra value for people who are more into an artistic product or output. It’s like a band selling t-shirts, cds, signed posters, personal performances. It’s really, really hard to make a living creating art, so I really think artists should exploit these potentially untapped sources of income as much as possible. And I don’t mean exploit in the mustache-twirling villain way, I mean in the sense that “we need to power our cities, and oh look there’s all this wind blowing about, why not build some wind turbines to exploit that?”

So why do we feel that it’s not exploitative with Kickstarter, where people are investing before ever seeing a product, but it is exploitative in F2P, where at least people are playing the game and making a decision on how much to invest based on tangible experience?

It’s likely down to the fear that F2P games are using psychological tricks to extract that extra money. Which, no doubt, is a valid fear, one based on first-hand experience with some of the tricks F2P games often pull.

But I’d argue that, even without playing mind-games, you’re going to see exponential drop-off in engagement (and willingness to spend) with any product or fan-group. In other words, the really deeply obsessed fans will be a tiny fraction of the whole, but will spend a disproportionate (relative to their numbers) amount of money on their obsession. The number of people for whom Elvis’ sweaty used jumpsuit is a piece of collectable memorabilia worth months of salary to own are always going to be much fewer than the number of people who would plonk down cash for an Elvis CD.

It would be extremely unusual, I think, if mapping the number-of-fans to the degree-of-fandom-and-corresponding-willingness-to-spend on a graph didn’t result in an exponential curve.

So, really, to conclude, while I think the fear of F2P mechanical-exploitation is valid, the fact that only 1 in a hundred or so F2P players pay for the games doesn’t seem unusual overall, and the fact that the largest share of revenue comes from a minority isn’t, in itself, that concerning.

Tags: , , ,
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *