F2P: Legitimate Business Model Or Last Desperate Maneuver Of The Dying?

Champions Online

Captain Glowy Hand was very popular during power cuts

What do you get when you cross a one year old game, a dwindling player population and a current trend to reinvigorate revenue through an alternative payment model? A Free-2-Play MMO! Yes, that rather catty but nonetheless accurate statement (oh I’m such a bitch aren’t I?) was brought to you by the news that Champions Online is following the recent paths of DDO, LOTRO and EQ2 and going F2P.

I could say I was surprised when I saw the email ping onto my iPhone yesterday but that would be a lie. I’m not surprised in the slightest as it makes perfect sense. Ever since it become publicly aware that going F2P was the best thing to happen to Dungeons & Dragons Online since introducing Seven Of Nine to Voyager we’ve seen a whole lot of buzz about it becoming a serious alternative to the traditional monthly subscription model. It was shocking when LOTRO went F2P, mildly surprising when EQ2 did it and downright predictable when Champions Online followed suit.

The curious thing though is that aside from the odd foreign MMO designed specifically with F2P in mind, it seems as if Western companies are only embracing it in a final attempt to reinvigorate their dying games. We all know that DDO, EQ2 and now CO (LOTRO is possibly an exception – I have no idea what their population was like pre-F2P) weren’t exactly setting the business world alight with their massive subscription numbers and huge profit margins. In fact, they were/are all probably hanging by a thread over death’s door and if it hadn’t been for F2P there futures may have been very shaky indeed.

It’s also no surprise that a company like Blizzard has no intention of going F2P. Why would they? They’re currently making more money than God and probably have weekly money fights during happy hour at Richie Rich’s Fort Knox getaway. Fact is, if a Triple A MMO can rack up hundreds of thousands, if not millions of players, all forking out $15 a month plus more for additional extras like sparkly ponies or gender transplants then why on Earth would they want to switch to a business model that’s invariably going to earn them less profit?

Of course, on the flip side, just because the free-to-play model is only currently being employed by the MMOs further down the food chain doesn’t make it any less of a legitimate business model. If it keeps the game ticking, provides players with entertainment and new content and keeps the developers in jobs then honestly who cares what the spurring motivation behind it all was.

Regardless though, the really good news is that it’s us, the lil ol’ player, who stands to benefit from this new trend of big name MMOs turn F2P. For instance, it’s giving me the perfect opportunity to get stuck into LOTRO without having to spend a penny and another opportunity to check out Champions Online again. Oddly enough, I find myself quite looking forward to the prospect of the latter. I played the game at launch, didn’t think too much of it (although I didn’t hate it or anything) and then promptly forgot about it completely. A F2P version will be just for the what the doctor ordered to tempt me into checking it out again.

At the end of the day so long as players keep voting with their wallets and lack of demand curtails cost then we’re going to end up with a lot more alternative ways to play our MMOs which is definitely a good thing. But the most scary thing of all? It actually seems like capitalism is working as intended.

-Gordon

P.S. Any predictions about what game will go F2P next? My money is spread evenly amongst Star Trek Online, Age of Conan, Warhammer Online and possibly even Aion.

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34 Comments

  1. Longasc says:

    I would bet against Aion, too many people are playing it, even if it is not really what most “Westerners” want.

    STO: If CO makes enough money to convince Cryptic, it is F2P in a heartbeat.
    But: I doubt CO is going to copy DDO’s fantastic result.

    The thing is, people can only play so many games. They even PAY for the cool games they like, hear, hear! And as I am not an omnipotent gaming Satyr, capable to have fun with them all, I will focus on the good ones.

    I am just not sure if CO is a good game, even if free to play. I personally do not care at all even if it is, Superheroes are just not my thing. But I could see a F2P STO being quite successful because it’s Star Trek. They are already selling this, that, every other… no, by now every week something new is for sale already.

    P.S.: Looking forward to LOTRO EU F2P, I somehow doubt that the model works as nicely as DDO, at least for me as endgame-level player.

  2. Tesh says:

    “It actually seems like capitalism is working as intended.”

    Weird, isn’t it? The bigger challenge will be whether the other half of the equation can catch up; the chase for quality.

  3. Openedge1 says:

    I would take Aion and Warhammer Online off that list.
    Like Longasc, I know Aion is doing way better than a lot of people want to think, and they have shown no sign of being on the brink.
    Warhammer was so adamant that they would NOT be going Free, that they will be hold outs.
    I would bet on STO or AoC as first up.

    Overall, next year will be telling. Rifts and Tera are both slotted as Pay to Play and Guild Wars 2 is buy once, free forever like GW1. If GW2 stomps on Rifts and Tera (and if SWToR gets its head out of its bum and decides on a pay plan, count it here as well)…then it will not be difficult to see more games going the Free route.

    Why not add Vanguard as one other option to that list. That has my vote for “Soon”.

    • Gordon says:

      Yeah I think Mythic are too stubborn to admit that there is anything wrong with WAR and turn it F2P :) Age of Conan though… could be a real possibility. Would be very nice for the players too.

    • Dril says:

      AoC won’t go f2p. It’s like Aion anyway; people think it’s crap and dying. Only the (whiny, spoilt, immature, ill-informed, abusive, uncaring, detestable) PvP community is really likely to go, and that’;s because they don’t understand that PvPers are meant to make their own content.

  4. Dyre42 says:

    It’s worth noting that they’ve timed going f2p to occur near the launch of DC Universe Online. Given what I’ve seen of DCUO I don’t think CO could compete using a subscription model and apparently neither did they.

  5. To answer the question your post title poses: both.

    I think it’s pretty obvious that Champions Online is looking to do something to draw more attention to the game, and as someone else mentioned it just happens to be around the time that DCUO is going to ramp up the hype. I think this might work; not for me, the fun for me would be playing with the power sets, not playing a class-based game, thanks. But, I think it’s done good things for DDO (that got me to start playing) and it’s looking like a a positive effect on LotRO, too (which was doing fine if not spectacularly before the F2P launch as far as I could see).

    • Gordon says:

      F2P for CO will certainly draw me back to the game out of curiosity if nothing else. I highly doubt I would subscribe or pay any sort of money for it but it would be fun to play around again in the game without worry about subscription fees.

  6. Jason says:

    I’d say it’s a little bit of both. DDO was an experiment for Turbine. The game was doing fine, F2P was an experiment to see if moving to a microtransaction driven model could be successful. Clearly it worked well for them, and they applied it to LotRO, where it was even more successful.

    In other cases, I have a less optimistic view of things. EQ2 I feel made the move out of a combination of desparation as well as a hope to move subscribers onto a more expensive payment model.

    With that said, it’s something to be taken on a case by case basis. WAR and AoC won’t make the move, and I think Darkfall will shut down outright first. There’s a strong case to be made for moving STO to a F2P model, but there needs to be a lot more content for that to work, STO is doing badly due to lack of content at launch. Again, LotRO is a wonderful example of this, doubly so considering they’re giving away the level cap to everyone, although you do need the expansions to access quest content. Beyond those four games, I don’t know enough about Aion, but NCSoft is a pretty well grounded company, so I doubt that will go F2P any time soon either.

  7. Ardwulf says:

    I’m not sure that we should see it in quite so stark terms when this happens; to date, no obviously “dying” game has converted. DDO and CO weren’t doing well by any definition, but I’m not at all sure that eirther game was on the precipice of cancellation otherwise. EQ2 and LotRO were both games with quite healthy populations. Very healthy, in LotRO’s case – it was consistently one of the top five or six subsription games, and it’s gone up a coupld of places since going FtP.

    As far as which games will go next, Warhammer and Age of Conan spring to mind. Both would require substantial work in the conversion. Aion, I’d say no chance; western revenue is a footnote to that game anyway, and Asian players are already paying via a different method. If Aion went south, I think NCSoft wouild cancel it rather than convert the game to a different model for the sake of the few North American dollars it might pick up.

    What game needs to go FtP the most? That’s easy – Vanguard. SOE had better get on board with it soon, though or it’ll be too late.

    @Longasc: After playing a fair bit of both, I actually think the LotRO system works better than that of DDO.

  8. Dblade says:

    CO was dying. When you barely have two 100 person instances of Vibora Bay, and only one of Monster Island, you are a dying game. Club Caprice, the roleplaying area, was lucky to top 30 people in all instances. The CO PvP channel had maybe 10 of the same regulars for the whole game. I can only go by anecdote, but the game had very few people when I played, but the instance structure hides a lot.

    My guess would be darkfall or fallen earth. The smaller the game, the harder attrition will hit it.

    • Harpsichord says:

      I’ve had a completely different experience in CO.
      While Club Caprice generally has a low population (probably due to all the ERPers that creep the rest of us out), I haven’t been able to wander across the “safe” areas in CO without running into 20 or 30 characters. It’s not WoW – the superhero genre makes for a niche MMO – but it’s got quite a few subscribers. Besides, DCUO’s flaws drove a few more back to CO.

      Honestly, it would have more subscribers if the potential playerbase weren’t split between CO, City of Heroes, and DCUO. Most players don’t want to pay for all 3; CO adding a f2p model (in addition to their subscription model) allows some of us to continue playing it while subscribing to another game, as well.

  9. Ephemeron says:

    I believe that the barrier that prevents triple-A titles from adopting F2P model is a technical one.

    When a game switches from subscription to F2P, the number of players instantly booms. And Blizzard’s servers are simply not prepared for the invasion of several hundred million players.

    • Gordon says:

      I reckon it’s more a case that Blizzard already have a huge percentage of the market cornered and wouldn’t actually get many more players if they went F2P. All that would happen is that they’d lose a big chunk of they’re monthly revenue from all of the casual gamers who fork out for subscriptions.

      • Tesh says:

        Thing is, they could corner the F2P market, too. I’ve noted before that CAT is the perfect opportunity to split off the old Vanilla WoW as a F2P product (more Guild Wars, less item shop) and keep the updated CAT-era world for subbers. Can you imagine the ruckus that would cause to those non-WoW games trying to eke out a living in the F2P space?

        • Gordon says:

          True indeed but I’d bet they don’t think it’s worth their effort. They’re probably focusing on generating more revenue from the existing player base through micro transactions like the sparkly pony.

          • Dril says:

            Which is bloody stupid. I’d bend over backwards for older WoW; admittedly, I liked TBC the most, but for Classic I’d be more than willing to pay outrageous prices in a cash shop.

  10. Bhagpuss says:

    People who weren’t playing EQ2 seem to think the game was on its last legs and SoE is so ridiculously secretive about its subscriber figures that one would be forgiven for assuming the worst.

    If you recall, however, the last EQ2 expansion topped the sales charts for two weeks last Spring and even after the recent server mergers the game has 19 Live servers. Not too shabby for a six-year-old MMO.

    LotRO, by most accounts, was doing better still. Generally reckoned to have a subscription base in excess of 300,000 and probably the second largest Western fantasy MMO after WoW.

    I think the move to a mixed payment model is more the beginning of an understanding of how to maximise earnings potential from these products than it is desperation. Expect to see a lot more of this kind of thing.

    • Gordon says:

      It’s a good point about EQ2 and I do wish SOE would be more open about it. I guess my views about their subscription numbers has come from the fact they’ve had to do a few sets of server merges and that usually indicates a dwindling population.

    • Tesh says:

      “I think the move to a mixed payment model is more the beginning of an understanding of how to maximise earnings potential from these products than it is desperation.”

      Agreed wholly. It’s an expansion of the potential customer base. Mixed business models are simply a smart move. What surprises me is that it’s taken this long for the big boys to realize it.

  11. Lomax says:

    On EQ2 too its a special case since they have started it as a completely seperate service with (currently) only one way transfers from Live to EQ2X F2P, so whoever they get on EQ2X is more or less a new subscriber.

    I say currently too as I would expect now that they’ve gotten as many Live to EQ2X subs as they can so they might be motivated to turn the transfer direction the other way if it generates more revenue.

    The second option I see also for EQ2 is for a completely different F2P service to be rolled out on Live selling content instead of power, although we’ll see I guess.

    As for F2P, personally I think its a desperate move on its own for a game especially when its relying on selling power (items that allow gameplay to be trivialised or skipped), but it would actually make sense for a game to just give away for free the bits that people are keen to level past.
    In that case its a great mechanism to get players hooked deep into your game, but it takes some balls to give things away for free when the payment isn’t gauranteed.

    As for who goes F2P next my guess would definitely STO, they took onboard lifetime subscriptions which more or less gaurantees a F2P change later on (I’d put big money down on this happening in the next 3 years).

    After that its tough, I think Aion is doing ok enough, AoC is humming along now it seems to avoided the total wipeout and WAR has already given a shot at it with the endless free trial. I really couldn’t predict who would change next out of them.

    As for WoW, I think we are a few years away yet, they are top of the pile with massive profits from millions of high paying US and European players, and I think F2P is going to lower these profits however you cut it.

    Yet the profits did drop year on year the past year while they reported more “subscribers”, I assume these “subscribers” therefore appeared from their interestingly named “game rooms” (I picture here a wood panelled smokey room with impecicably dressed men playing Billiards :) ) which are basically just millions of Chinese playing for 9 cents an hour creating as many accounts as they like.

    So I think WoW will eventually go F2P as its user base is shrinking in the most profitable regions, but its a long time from now and really depends if they fail to hold onto players, more expansions like WotLK or that concentrate on new players over current user base should do it I reckon ;)

  12. Silvermute says:

    Alganon?

    Ph’nglui mglw’nafh Derek Smart R’lyeh wgah’nagl fhtagn

    Oh, I’ve done it now…

  13. David says:

    I think we need more up-to-date revenue information from DDO. I wonder if the F2P revenue spike may just be an “initial excitement” thing which drops significantly once the base of people interested in the game have bought all the stuff they feel is needed to play effectively. I don’t think F2P is really proven at all, yet. It increases game population, but does it really increase revenue in the long-term? Down the road, some of these companies may come to miss their stable, reliable subscription revenue stream.

    • Gordon says:

      It’s a good point David. I’m sure the mere announcement of a MMO going F2P alone generates a huge amount of hype, interest and a surge of player interest and resulting cash transactions. Whether or not that holds up in the long run is completely unproven. I wonder what the population of games like DDO and EQ2X will be like in 12 months time?

  14. David says:

    Another thing to consider — as more and more games go F2P, it will dilute the prospective player base for all of them. DDO may have had such a huge F2P explosion because it was one of the few free options available at the time. But now there are a lot of F2P options and more on the horizon (Pirates of the Burning Sea will be F2P before the end of 2010…look into it, the ship combat is some of the best combat offered by any MMO in any genre). This means people who aren’t willing to pay a subscription will now have more games to choose from, rather than all of them flocking to a small number of options. So each population explosion as a new game goes F2P could be smaller and smaller than the previous one.

    Also, the large selection of F2P games could create a larger base of players who flit around from game to game without committing to any of them…play the free stuff, then move on to the next free game. Each game that goes F2P may steal all the free players from the “old” F2P games as well. Is DDO’s population still as strong as it was at F2P launch?

    In other words, I think people are putting far too much stock on the initial explosion of DDO. At least, until/unless DDO proves that the model is sustainable in the long-term.

    • Randomessa says:

      “Also, the large selection of F2P games could create a larger base of players who flit around from game to game without committing to any of them…play the free stuff, then move on to the next free game. Each game that goes F2P may steal all the free players from the “old” F2P games as well. Is DDO’s population still as strong as it was at F2P launch?”

      This is possible, but I’m not sure there isn’t an underestimation of the audience who is looking for an MMO “home” just as much as those who devotedly pay a subscription. If players are flitting from game to game, who’s to say the problem isn’t with lack of commitment with the player, but rather a lack of content within the game – a problem with some subscription games as well. For example, I think the tendency is to see a F2P player leaving a game due to lack of content (even with the intent to return later upon further content releases) as being uncommitted, while subscription gamers have been known to cancel subscriptions in between expansions without receiving the same stigma/label.

  15. Randomessa says:

    My two questions are:

    A) The potential success of F2P conversions aside, why oh why is nobody even attempting to tackle the “buy the box/content, play free” model of Guild Wars/Guild Wars 2? Is it really *that* out there?

    B) When will Age of Conan and/or Vanguard go F2P? Those are the droids I’m looking for.

    • Tesh says:

      I’ve wondered about A) for a while now. It’s not “out there”, it’s how games used to be purchased and played… and how the bulk of games still are. It’s just this weird MMO niche that’s all screwed up. (The subtext there being that there’s a larger audience for MMOs than subbers.)

  16. UnSub says:

    Warhammer Online recently announced their “we aren’t going F2P really, but here is more stuff to buy that looks like we are” Entitlements items.

    http://www.mmorpg.com/gamelist.cfm/game/239/view/news/read/18518/Warhammer-Online-Account-Entitlements-Detailed.html

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