The Rise of Freemium

We’d like to welcome our newest writer to The Average Gamer, Richard Gwilliam. In 2000 Kirth, aka Richard Gwilliam, discovered the internet and Everquest while studying. This lead to EQ2, the required WoW, AoC, Eve, WAR, Vanguard, GW and a lot of free games in between. Not just an MMOer, he can also be found blowing things up in the wilderness that is Fallout 3, stealth killing in Assassins Creed or trying to complete God of War trilogy, all on the PS3. Next feature could be yours… write for The Average Gamer.

Gaming business models are an interesting topic; how do these so called “free” games actually make money? Surely they can’t, the games are supposed to be free. Guild Wars was one of the first MMOs to break this mentality. ArenaNet announced before launch that the game would be free of subscription fees. To date, all the money has been made from purchasing the campaigns and the expansion “Eye of the North”.

Eve Online added another twist to the subscription business model, the PLEX item method. The “30 Days Concord Pilot License Extension” (PLEX) is an item which allows players to add 30 days play time to their account. The twist is that you can trade them in the game market place. This allows a player to use their InterStellar Kredits (ISK) to indirectly buy actual game time. A skilled player with a bit of time can fund their game time from actually playing the game.

Guild Wars and Eve appeared to be an anomaly rather than the rule, however recently a new phenomenon has appeared… the freemium model. The idea is simple; give away a free basic game and then charge for extra services. It’s a very standard business model for a lot of services these days, but now it’s extending to video gaming.

Back in 2009, Turbine re-launched Dungeons & Dragons Online (DDO) on a freemium business model. This proved to be a very smart move. DDO was suffering a loss in player base, and hence subscriptions. Almost a year later, Turbine announced a major increase in profits almost solely due to DDO. Clearly the model worked. Turbine then announced Lord of the Rings Online would be going freemium as well.

Lord of the Rings Online going freemium was a very big step. LOTRO is clearly very high profile, and there was concern on the outcome. The change was not without issues; to this day Europe is still waiting for a launch date. There was the question, what about those who have already a subscription, or even worse, a lifetime subscription? Turbine neatly dealt with this by offering monthly stipends of 500 Turbine points which can be spent in the LOTRO store. Lifetime subscribers got the same deal, however they never have to pay for the points per month.

It’s clear that Sony Online Entertainment (SOE) was watching this situation evolve, and sure enough they soon announced the freemium version of Everquest 2, EQ2 Extended (EQ2X). A massive outcry was heard on the EQ2Flames community boards. There were already issues with the pay servers having a lack of people, and now SOE decided to give the game away or so it seemed. Once SOE actually published their plans, it was clear they had taken Turbines model and milked it for all they could.

The SOE model is very complex, and needless to say almost everything requires you to pay money. Is this a bad thing? Not necessarily, as the EQ2X servers are very busy. The model change has clearly brought in a large new player base. This is where SOE differs majorly from the Turbine approach. SOE decided to roll out new servers exclusively for the EQ2X platform. This means the older servers did not benefit from the influx of new players, in fact it has worsened the situation. Many people who play casually have now transferred their characters over to EQ2X. It’s clearly a wise move, no subscription fees and newer server hardware. Will SOE be able to pull off what Turbine clearly has? Only time will tell.

What does this mean for gameplay?

Do the cash shops alter the game dynamics? Does the person with the deepest pockets have an “unfair” advantage over the rest? It could be argued no. Cash rich, time poor or time rich, cash poor. Both of these states should balance – one has the money to buy the boost; the other has the time they can put into the game to get to the same place. This has been occurring in MMO’s since the gold sellers started. All that has changed is the publishers are now getting a slice of the action.

Almost all freemium games use selling items/gold/potions in game to make money, but it’s not always a smooth affair. gPotato caused a huge storm on the internet when they announced their pricing model for Allods Online. It appeared that the game was designed to require the use of store bought items to play normally. This made the player community object, saying the game was “free-to-run” but not “free-to-play”.

An in-game affliction called Fear of Death was the main issue. FoD is an affliction that means when you resurrect after dying, you get -25% all stats. This stacks up to 4 times, so you could end up with -100% on your stats! Even worse, it lasted for 2 hours and persisted even when logged out. To combat this, Perfumes were store items that made you immune to FoD, gave +50% hit points and lasted for 30 minutes or until you logged out.

The launched price was about US$15 for 20 Perfumes. This was as expensive as your average monthly subscription, but lasted for no where near the same amount of playtime. After player complaints, gPotato backpedaled, lowered the prices substantially and announced there would be further changes to come. Sure enough, in June 2010, Fear of Death was totally removed and replaced with a new game mechanic called “Cursed Items”. A similar concept, but with a random trigger and the curse only affects an item that is rare, epic or legendary.

What most players want to know is, is freemium better than subscription? It really depends on the player. If you play just one game, and play it a lot, then generally a subscription works out cheaper. World of Warcraft is a bargain at £8.99 a month, which you could easily spend in a weekend on a freemium game. Where it excels is for all those MMOs you wanted to play now and again, but could never justify a monthly fee for.
It’s clear that the future of MMOs, their payment methods and game dynamics is going to be an interesting one.

Should cash-rich time-poor players should be allowed to buy boosts?
Does it make a mockery of the people who bust their asses to reach those high levels?