Developers have been experimenting with free-to-play (F2P) marketing strategies for more than a decade, and more recently activity has been focussed in social and mobile gaming. Increasingly however, core-market games are being marketed as F2P (Team Fortress 2 and Tribes: Ascend being notable recent examples).

There are certain development temptations, born originally of social and mobile games, which represent the “low hanging fruit” of F2P games development. However, carried to the core-gaming market, this fruit is rotten and shows an unsophisticated understanding of the differences in F2P consumers between the two markets from developers willing to pick it.

There seem to be two “easy rules” for F2P developers; both the conceptual product of an oversimplification of consumer dynamics into “volume” and “conversion”.

(1) Free to play games have to be basic

The motivation behind making your free-to-play game as computationally basic as possible is clear: volume. And in the context of social/mobile games, where the games platform itself limits graphical complexity, it is logical that basic free-to-play games are the norm.

However, beyond the social/mobile platforms, the temptation to develop free-to-play games remains. The management driver behind adoption of a free-to-play marketing strategy is most likely the belief that the product’s monetisation strategy is strong. Strong enough, specifically, to result in higher net contribution from the higher volume of F2P users than the profit available from a market-optimised price point.

When developers are forecasting the contribution effects of different monetisation approaches, volume assumptions are required. Simply put – the more substantial the volume, the less aggressive the conversion assumption required in monetisation forecasts.

The more users you can generate, the lower the percentage of users you will have to convert to break even (or make profits).

Basic.

(2) Gamers buy-to-win

Again, the motivation behind pay-to-win in F2P development is intuitive: pay-to-win is the biggest lever a developer can pull to drive conversion rates (the price analogue) within F2P games.

In developing a monetisation strategy for F2P games, there are a number of options which can be used seperately, or as part of a mixture:

– “Freemium” offers: users who pay higher subscription rates have access to different products or services.

– “Virtual Goods”: one-off micro-transactions provider a player with in-game products or services.

– Advertising: users play for free, but adverts are present within the gaming experience.

A naive understanding of pay-to-win products portrays them as the most attractive “virtual good” that a committed player could purchase. Some early empirical evidence from F2P social games showed that “whales” (big spenders) were prepared to spend significant amounts to acquire game-changing items within games, and early monetisation strategies were geared towards harpooning these profitable players.

The more users you can generate, the more targets you have for your whale-hunt, with the pay-to-win items being the most powerful whaling weapons in the development arsenal.

Again, basic.

While assumption (1) drives volume, assumption (2) will drive a price analogue, conversion, and therefore contribution within lifetime value model.

But independently, both assumptions are naive, and taken together as drivers of value, false.

While the unsophisticated story might be one of “volume” and “conversion” as discrete variables driving project lifetime value, the reality is that this story is not just lacking in sophistication – it is plain wrong.

In fact, as the F2P marketing model moves beyond social/mobile, into the “core” gamer segment, developers are showing gamers that when they avoid the “low hanging fruit”, they can build sustainable products that don’t suffer from the steep attrition and rapid churn afflicting simplistic F2P titles.

Take Tribes: Ascend as an example:

The game distinguishes itself from other F2P titles by avoiding both (1) and (2).

Firstly, the game is complex. It runs on a build of the Unreal 3 engine, which is no graphical lightweight, and incorporates a high player-count at the low-latencies required of an online FPS. Furthermore, the gameplay is not your basic FPS fare. Developer choices have been made to focus on Capture the Flag (rather than the more basic Deathmatch variants), including additional complexities like skiing and jetpack movement, which can take hours to master.

Secondly, although microtransactions and virtual goods are the basis of the game’s monetisation strategy, the developers have carefully avoided a pay-to-win situation. Gamers can purchase weapons which materially affect gameplay (and so are attractive to the user-base), but are unlikely to determine any particular game’s outcome. The free-to-use weapons are as capable of winning matches. A fine balance has been struck.

The result is a game which takes a third variable of a lifetime value calculation into consideration: retention costs. Because of the quality of the game created, and the committed user base which has developed as a consequence, the developers do not have to rush to develop new products, generate new hype and market the game furiously. The attrition curve is much shallower, as much less expenditure is required to retain a percentage of peak users.

The bottom line:

In approaching free-to-play marketing strategies for games, developers (particularly in non-mobile/non-social markets) can lower retention costs and develop longer-lived user experiences by avoiding the “low hanging fruit”, and the misconception of volume and conversion as independent levers.

Although some may fear higher development costs and risk, the prizes are substantial: real virality, low attrition and a committed community of appreciative users. In avoiding misconceptions, Hi Rez’s Tribes team have created what most F2P developers can’t: a game with a truly sticky, happy user-base.