The changing market

An evolving design perspective

The value of free players

Monetizing your big spenders

Respecting the wallet

Microtransactions in the Wild West

It's been a long time since there has been a complete revolution in video game design, but we are in the midst of one now. Free-to-play gameplay and microtransactions used to be limited to indie games and Korean massively multiplayer titles; now, it's broken into the mainstream in a big way, and has increasingly become the way players expect to play their games.The success ofis largely credited for this transition; at launch this pioneer allowed players to play a substantial portion of the game without paying a dime; as of July 2012, it had 12 million unique players per day, with over 32 million registrations, putting Riot Games on the map. By comparison,sold 12 million copies worldwide total in 2012, andpeaked at about the same.The rest of the industry noticed, and began moving quickly to a f2p model. New titles likeand the upcomingwere built with this billing model in mind. Meanwhile, older titles like, and (my employer's own)have all made quick adjustments to this billing model.All of these games enjoyed strong sales and market presence in their original incarnation, but all reported significant increases in both revenue as well as player populations from the change in billing model.�The market conversion has not happened without some bumps in the road, however. Many gamers dislike or resent the microtransaction trend. They tend to be older players, who grew up buying their games for a $60 price point, and like never being asked for another dollar again. This includes a substantial portion of the game developer community, who feel like the industry is nickeling-and-diming customers to death, and then shaking their corpses for loose change.Kids today grew up in a different world, finding music on YouTube and Spotify, then purchasing songs individually on iTunes. They buy movies on demand from a number of sources if their parents don't subscribe to HBO. They grew up playingand, and now play triple-A games like, paying as much money as they feel they can afford, which very frequently is none at all. The next generation of gamers grew up in a world where entertainment was tried for free and bought a la carte.It's not impossible to see why. While older gamers see free-to-play microtransaction models as an attempt to fleece the customer, the reality is quite different. The vast majority of those who play these games do, in fact, opt to never spend a dime, and this means that these customers never spend $60 on a game that they dislike.The free-to-play model becomes the ultimate free trial, and it puts a huge onus on the designer to create a quality, polished gameplay experience that the player quickly finds fun and engaging. When looked at through this lens, it is very easy to see the free-to-play model as far kinder to the customer base than was the old premium box model that we all grew up with.Needless to say, f2p requires designers to make significant changes to the way they approach their craft. Some of these are subtle but crucial. As an example, classic MMO design is, first and foremost, designed to encourage subscriptions at all costs. Designers know that once a player cancels their credit card in a game, it can be very difficult to get that customer to re-engage. By contrast, it's not so distressing if players of a free-to-play game bounce out of the game for a little while. Designers of true free-to-play games no longer care if you quit in April and May if they can get you to bounce back in June to play for a while and buy some stuff. Since no credit card information needs to be entered, players are much more likely to stop by when nostalgia for the game kicks in.In my opinion, this model much more accurately maps to real life than the old subscription model - the world is full of competing interests, be it the new hottest competitor to come down the pike, or real-life competition like television, school, or romance. The free-to-play model is less desperate to maintain a player's interest and subscription through all obstacles at all costs, but can instead focus on high-profile events designed to recapture the player's attention.Designers must also consider the widely disparate ratio of spenders vs. nonspenders. The exact ratio varies wildly from game to game, but can be a huge swing. Facebook games seem to have among the widest disparities, with developers reporting that frequently fewer than 2% of the population pay any money at all. The other 98%, and all of the costs they incur, are effectively subsidized by that small sliver of the population.It is easy to think of that 98% as shiftless moochers, but in most cases, the game is served well by having a large free-to-play population. Players are content for other players. In MMOs, they make your towns more full and social, and fill your game with more potential party members for your dungeons and player-vs.-player battle scenarios. In, free players fill the world with fodder for your paying customers to destroy.And this goes beyond the social value that having a large paying population offers. Even if only a fraction are paying for your game, having a free population of a couple million means that you have a couple million people potentially evangelizing the game to their friends and family. These big numbers are easier to market to boot.However, since potentially a small sliver of the population is actually monetizing the game, in many genres, designers need to re-evaluate exactly how money is spent in the game, to allow players to spend what they want to spend.If you look at most hobbies, they allow spending to scale to level of interest. It is possible to knit on the cheap, picking up only some needles and a ball of yarn at Hobby Lobby. Hardcore knitters, on the other hand, may spend thousands of dollars amassing huge yarn collections, and even fly across the country to go to sock-knitting conventions (yes, they exist). This level of optional spend is found in most major hobbies: woodworking, building model trains, playing music, golf - you name it. And while shops that cater to these hobbies are more than eager to help newcomers get off the ground with their new hobby, most of them live or die by their regulars, who are more than willing to spend their disposable income on the hobby that gives them so much joy.Looked at in this light, the classic game model doesn't make sense. No matter how much you loved the original, your spending in the game was pretty much limited to the original box product and the expansion. A hardcore player's spend was going to be in the same order of magnitude as the new player's, while the new player's entry fee was high enough to be a disincentive for many players to try it out. The rise of DLC as a revenue source has attempted to better capitalize on these devoted fans, but since they tend to still be content driven, the hardcore hit a hard ceiling of how much they can spend - even if they want to spend more (and most people like spending money on hobbies they love).Games that go free-to-play need to better capitalize on their devoted fans.has what developers call a "repeatable spend" - players buy random boosters to make their decks better and complete their collections. This is a highly scalable activity - Wizards of the Coast spends a lot of time providing cheap, entry-level decks and creating drafts and "pauper" leagues designed to engage low-level spenders, while high-end tournament decks can have aftermarket values of $400-600. The top customers are the financial lifeblood of the game, and Wizards goes to great lengths to elevate these customers and decks, but in general, players of any skill and spending level can find a satisfying game experience.Perhaps the most important lesson for those aspiring to enter the world of microtransactions is figuring out how to do so while still maintaining a healthy respect for the player and their wallet. It is easy to find new and exotic ways to charge your customers money, particularly now while the microtransaction model is still in its infancy in the United States. But just because you can charge a buck for something doesn't mean that you should.The most common mistake I see in the iPhone games I download is that the games are entirely too aggressive in attempting to charge their customers. Their "free-to-play" games often ask the player to pay for more energy within five minutes of initial download. The human mind is a great pattern-matching machine, and a player will almost certainly extrapolate that pattern to the future - and what they will see is a game that is not only doomed to be more expensive than what they want, but also one built with the philosophy of nickeling-and-diming them to death. Even worse, all of this happens before the customer is emotionally engaged with the game. It is easy and expected in these cases for the player to walk away.By contrast, when we convertedto follow the free-to-play model last year, we made a concerted effort not to oversell our microtransactions. Players are rarely, if ever, prompted to spend money in the first 10 levels, and the player is likely to forget that doing so is even possible. Even when spending is possible, we make it clear that the entirety of the game can be experienced (albeit with limitations) without spending a dime. Our logic is simple: We think that players are more likely to invest their time and money in a game that they love, so first and foremost we want our players to fall in love with the game. We see the player's respect as something that needs to be earned before we win that dollar.The free-to-play microtransaction game model is coming fast now, and it is not inconceivable to imagine a world in the next decade where the majority of games available to users are delivered in this reality. For the time being, though, we are still in a Wild West game design reality, where every design shop is attempting different ways to earn that dollar - some of those bordering on shady and questionable.Still, game designers need to start by acknowledging that a small number of heavy users will likely subsidize the majority of the efforts in their microtransaction-oriented game. To me, as a game designer, this is a good thing; making a game that earns the love and devotion of players is the right path. Making a great game with a solid design and a respect for your player's wallet is still the best way forward.