Free to Play Games

Free to Play Games
Essentials
by Teut Weidemann
Consultant Online Entertainment
Please do not put online for download without my permission. If you use parts of this presentation please quote me as the source
Definition: Classic Business
Retail Sale
Buy before you play
Reviews, Demos as
guidelines
Risk of returns
Very indirect customer
feedback
System Specs sensitive
Classic Market
Free to Play (=f2p)
No costs involved
free game download
or free access via browser
try before you commit: no
costs involved
Low entry barrier
Usually low system specs
Majority are online games
(MMO)
f2p specifics
If your game sucks the customer has
nothing to loose when leaving
Because its free customer accepts
compromises in quality*
So: How do you make money?
f2p Business
Extra services (Premium accounts)
also called Freemium Games
Timesavers
Items
Customization
= Micropayment or Itemsales
Advertising < 5% of revenue (excl. USA)
f2p Micropayment Examples
f2p business
Successful sale items are very dependent on the
game type & genre
Business success is closely tied to game design
Knowledge of economy basics essential
Thus f2p designers need to relearn
Thats why the classic industry hasn‘t „got it“ yet
User Attributes
Anonymous
Can leave anytime (low stickyness)
This effect is called „Churn Rate“
Usually brings 0.5-2 friends with him
Once he pays, he pays even more
Pay Variables:
User Values
Churn Rate: how many leave per month
Reg to Active: How many play* after registering
*Active User Definition: returning after first day and first
login
Active to Pay: How many actives pay = Conversion Rate
ARPU: Average Revenue per User
ARPPU: Average Revenue per Paying User
CPA/CPL: Cost per Aquisition/Lead (of user)
LTV: Lifetime value
PCCU: Peak Concurrent Users
MAU/DAU: Monthly/Daily active users
User Origins
Due to low system specs ...
Users comes from countries usually not
strong as a classic games market
Low average income (below $400)
can‘t afford high spec PC‘s or Consoles
So many play in Internet Cafes
Country Origin Example
Example 2
f2p Economic Principles
•
•
•
Online games = Persistent Social Entertainment
– Entertainment : has value from day 1
– Persistent : day 1 value = 0, increases with time
– Social : day 1 value = low (except Facebook games), increases with
time
 Network effect (works both ways!)
Recurring costs needs recurring revenue
– Online Games = service not product
– Marginal costs tend to zero
Free = no friction
– Lowest possible barrier to entry
– Others are important : accessibility, downloads, signup forms...
– Keep CPA < LTV
–
Source: Thomas BIDAUX
Business Case
1 Million registered users
Reg to Active: Churn rate varies (we assume 60%)
Rule of Thumb: 5%-15% Users pay i.e. 400.000 active users:
5%: 20.000 paying users
15%: 60.000 paying users
ARPPU 15€: 300-900 thousand/month (ARPU: 0.75-1.5€)
ARPPU 30€: 600-1.8Mil per month (ARPU: 2.25-4.50€)
Market Size & Forecast ARPU(!)
Source: IDATE Sept. 2008
f2p Marketing
Viral
Community Management
Facebook, Twitter, etc.
Media Coops
payed per user (€0.50/active), you get their reach
Online (SEM, SEO)
Click Ads don‘s do good
Google SEM does (and similar)
For each Channel CPA can be exactly defined
So you know what a paying user costs (on the cent!)
Freemium Games Examples
Various Sources, mainly from icopartners.com
Dofus
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•
•
•
•
•
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Game: Dofus
Genre: Browser-friendly fantasy MMO (Flash/java)
Developer: Ankama (France)
Numbers: 170 000 PCCU; 400 000 Subscribers; ARPPU 5 €
Key territories: France, Spain
Premium features:
Zone privileges
Item privileges
No combat cap
PVP
Pets
No cap on crafting
Housing
Runescape
•
Game: Runescape
•
Genre: Browser-based fantasy MMO (java)
•
Developer: Jagex (UK)
•
Numbers: 250 000 PCCU; 1 000 000 Subscribers;
•
ARPPU 5 $
•
Key territories: US, UK, Netherlands, Scandinavia
•
Premium features:
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Zone privileges/Item privileges
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Quests privileges/Extra skills
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Transport privileges/Dedicated servers
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Dedicated mini games/Extra Bank space
-
Housing/Extra emotes
Tibia
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Game: Tibia
•
Genre: Client-based fantasy MMO
•
Developer: Cipsoft (Germany)
•
Numbers: 50 000 PCCU; 300,000 Active, 100 000 Subscribers; ARPPU 5 €
•
Key territories: Poland, Eastern Europe
•
Premium features:
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Zone & Transport privileges
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Extra spells
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Housing
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Dedicated servers
-
Leveling & Bank privileges
Other f2p Games in EU
Game
From
Genre
Size
Country
Tribal Wars
Innogames (DE)
Management
4M actives
DE, EEU, PT, NE,
TU
Travian*
Travian (DE)
Management
4.4M actives
(250K PCCU)
51 languages in 40
countries
Hattrick
Extralives (SE)
Sport
Management
1.6M actives
IT, DE, SP, PT
Managerzone
Power Challenge
(SE)
Sport
Management
500K active
TU, PO
Stardoll*
Stardoll (SE)
Life Sim
35M registered,
5M active
UK, FR, PO
Moshi Monsters
Mind Candy (UK)
Virtual World
400K active
US, UK
AQ Worlds
Artix (US)
RPG
1.5M active
US, UK, Nordic
Spineworld
Playdo
Virtual world/RPG 3M registered
US, UK, Nordic
Micropayment Games Examples
Various Sources, mainly from icopartners.com
Habbo Hotel
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Game: Habbo
•
Genre: Browser-based kid virtual world (flash)
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Developer: Sulake (Finland)
•
Numbers: 10 M active users; ARPU 1.3 $
•
Key territories: Nordic, UK, Germany, France
•
MT features:
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Furnitures/Clothes
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Pets and Pet food
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Mini-games access
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Screenshots
-
Home page perks
Metin 2
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Game: Metin 2
•
Genre: Client-based Fantasy MMORPG
•
Publisher: Gameforge (Germany)
•
Numbers: 5 M active users;
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35K PCCU; ARPPU 20 €
•
Key territories:
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Germany, Poland, Turkey
•
MT features:
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Gameplay & Experience buff
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Gold gain buff
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Repair items
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In Game shop
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Potions/Trasnports
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Looks/Gender swap
Dark Orbit
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Game: Dark Orbit
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Genre: Browser-based Space management game
•
Publisher: Bigpoint (Germany)
•
Numbers: 70K+ PCCU; ARPU 3.6 €
•
Key territories: EU, Turkey
•
MT features:
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Elite items
-
Faster real time game features
-
Discounted items
O-Game
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Game: Ogame
•
Genre: Browser-based Space management game
•
Publisher: Gameforge (Germany)
•
Numbers: 2.4M active users
•
Key territories: France, Germany, Italy, Turkey. Exists in many languages.
•
MT features:
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Commander: Building queue, More UI
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Admiral: More fleet slots
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Engineer: Less damage taken
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Geologist: Better mining
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Technocrat: Better espionage
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Trading ressources
Runes of Magic
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Game: Runes of Magic
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Genre: Client-based MMORPG
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Publisher: Frogsters (Germany)
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Numbers: 500 K active users;
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30 K PCCU; ARPPU 20 €
Key territories:
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Germany, UK, Nordic
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MT features:
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Transport/Mounts
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Death management
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Housing customization
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Experience Buff/Loot buff
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Crafting tools/Respecs
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Chests keys/Pets
Other Micropayment games in Europe
Game
From
Genre
Size (estimates)
Country
Dragonica
Gala Net Europe
MMORPG
N/A
Rappelz
Gala Net Europe
MMORPG
150K
FR, DE
Last Chaos
Gamigo
MMORPG
60K
DE
Battleforge
EA
RTS
60K
DE
Seafight
Bigpoint
Management
500K
EU (+35)
Silkroad Online
Joymax
MMORPG
300K
TU
Florensia
Burda IC
MMORPG
120K
DE, FR
4Story
Gameforge
MMORPG
70K
DE
Nostale
Gameforge
MMORPG
100K
DE, FR, UK
Perfect World
Games Masters
MMORPG
200K
DE, PO
Knight Online
K2
MMORPG
500K
TU
Cabal Online
Games Masters
MMORPG
230K
TU, EEU, DE
Twelve Sky 2
MAYN Interactive
MMORPG
150K
US, DE, TU
Online Gaming Portals
Central attraction sites of „new“ players
Some do 250k new registrations/day!
Some have 90+ million of registered users
Example: Bigpoint.com
Attracts different user then the viral
Good for media coops (white labeling)
F2P developers in Europe overview
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Sample from 280+ games
F2P developers in Europe overview
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Direction taken by EU Developers
F2P developers in Europe overview
Studios Geographical breakdown
Future of f2p
Huge growth already (350%+/year)
Just germany does €500+ mil/Year revenue
They will look as good as retail next year
What happens to „classic“ games at that
time?
f2p is already here, however the classic
industry is too slow to adapt it
Q&A
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