In 2013, the top 3 earning online games were CrossFire, League of Legends and Dungeon Fighter Online. These games had a total combined revenue of over 2 billion dollars ($957, $624 and $426 million respectively). These three games also gathered a massive player base, with CrossFire claiming to have over 400 million registered users worldwide.
Interestingly, all three games are free to play.
Many Massive Multiplayer Online games, like Terra and Star Wars: The Old Republic, started off as subscription based games, but after a brief amount of time switched to a free-to-play model after experiencing poor performance. World of Warcraft is the only subscription based game that made it onto the top ten earners list (it sits at number 7), and only earned a modest $213 million dollars in 2013.
The apparent question becomes: will the free-to-play model become the dominant business model for the gaming industry in the future? Nobody really has a definite answer.
The gaming industry is constantly evolving, so games can meet the needs of their players, while maintaining an edge against their competition. There are currently three major business models that encompass the entire Massive Multiplayer Online game industry: buy-to-play, free-to-play, and subscription/monthly Fee.
Each model has its own advantages and disadvantages. However, Massive Multiplayer Online games nowadays will not adopt just one model, but apply a combination of models, giving them the flexibility between what the players want and a steady revenue stream back to themselves.
The free-to-play model, while it sounds great at first, is a lot more to it than just a “free” game. Developers do not give out titles that cost millions of dollars to make for free. Companies need to find a way to generate profit, in this case through micro-transactions.
League of Legends Approach
Take League of Legends for example, which has arguably the best free-to-play model right now in the market, offering players hundreds of champions and masters to play, and endless combinations of team composition, and strategies. You can play and get access to the entire game’s content without ever having to spend a dime. However, they just made over $600 million last year through micro-transactions within the game itself.
What makes Leagues of Legends’ business model great is that you can only spend real money on non-game-changing aspects of the game. An example of this would be champion skins and ward skins (difference appearances to characters and items). The appearances do not in any way change the way you play the character. There is absolutely no differences between one with a skin and one without. You have full access to all the game’s core content as a free player. Leagues of Legends also utilizes an in game currency that accumulates as you play the game. This currency can then be used to purchase new champions which you can also use real money to buy if you want to save time. This makes League of Legends’ model a true “free-to-play” game.
CrossFire Approach
CrossFire, however, has a shockingly different approach from League of Legends. The game is very much an imitation, if not an outright carbon-copy of Counter-Strike (one of the initial First Person Shooter games). It has a cash shop where you can not only buy cosmetics, but also guns, ammo and armor that gives a significant advantage over players that don’t. The gaming community coins this kind of free-to-play model as a pay-to-win model. Obviously, the level of fairness in this game is nowhere close to on par with League of Legends. Many critics and players dislike this model of play, especially in such a fast paced competitive first person shooter gaming environment. But who are they to say anything about the game’s success? The game finished 2013 with almost 1 billion dollars in revenue, grabbing the top position in sales. Although the game adopts a business model which many gamers oppose, it is obvious that the numbers are telling us a different story.
Overall, free-to-play games took in almost 2.9 billion dollars in revenue in 2013, up 45% from 2012 (Source: superdataresearch.com). Compare that to the buy-to-play and subscription-based model games that have seen a steady decline in player count, while free-to-play games are standing strong with little to no changes in player count on a month-to-month basis throughout 2013.
With extreme volatility in the gaming industry lately, combined with the huge pressure to satisfy the player base, these numbers alone will not be enough to justify which business model is the best. However, this year promises a new generation of games with revolutionary game play and storytelling, as well as play style flexibility. It will be interesting to see what model developers will choose and how successful in turn these games become.
References
[1] [MMORPGs]. (n.d.). Retrieved from http://www.mmospotlight.com/wp-content/uploads/2015/03/league-of-legends.jpg
