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Guillemot: As many PC players pay for F2P as boxed product

Guillemot: As many PC players pay for F2P as boxed product

Wed 22 Aug 2012 7:00am GMT / 3:00am EDT / 12:00am PDT

93-95% PC piracy rate means F2P is just as effective, with lower costs

Ubisoft CEO Yves Guillemot has told GamesIndustry International that the percentage of paying players is the same for free to play as it is for PC boxed product: around five to seven per cent.

Speaking to GamesIndustry International editor Matt Martin at Gamescom, Guillemot revealed that free to play has been an effective way for Ubisoft to market product to territories in which PC gaming had been so badly affected by piracy that profit was impossible.

"We want to develop the PC market quite a lot and F2P is really the way to do it," said the French CEO. "The advantage of F2P is that we can get revenue from countries where we couldn't previously - places where our products were played but not bought. Now with F2P we gain revenue, which helps brands last longer.

"It's a way to get closer to your customers, to make sure you have a revenue. On PC it's only around five to seven per cent of the players who pay for F2P, but normally on PC it's only about five to seven per cent who pay anyway, the rest is pirated. It's around a 93-95 per cent piracy rate, so it ends up at about the same percentage. The revenue we get from the people who play is more long term, so we can continue to bring content."

"On PC it's only around five to seven per cent of the players who pay for F2P, but normally on PC it's only about five to seven per cent who pay anyway, the rest is pirated."

Added to that is the fact that free to play is generally cheaper to produce and distribute, able to cannibalise existing assets and avoid the costs of getting boxes on shelves. Whilst this does make the creation of new games easier, Guillemot was keen to point out that it's not a magic recipe - games must still be tailored to fit the audience's needs.

"We also take content which we've developed in the past, graphics etc, and we can make cheaper games and improve them over time. What's very important is that we change the content and make it a better fit to the customer as time goes on."

Whilst free to play has proven useful for the publisher in breaking new markets, it's not likely to replace the company's core business. Guillemot is confident that the console market will regain its strength once the next generation of machines becomes available, something which can't come soon enough.

"I think it's very important for new generations to come regularly with innovations for the industry, so I think we've been waiting a bit too long."

"We must be careful because the consoles are coming. People are saying that the traditional market is declining and that F2P is everything - I'm not saying that. We're waiting for the new consoles - I think that the new consoles will give a huge boost to the industry, just like they do every time that they come. This time, they took too long so the market is waiting.

"With the innovation that we'll see from, first, the Wii U then the other consoles, the market is going to grow enormously again.

"I think it's very important for new generations to come regularly with innovations for the industry, so I think we've been waiting a bit too long. What is important is that when those new generations do come, they bring enough innovation to make the market strong again."

41 Comments

Kingman Cheng
Illustrator and Animator

952 180 0.2
I'm still scratching my head over this, having read this over at Eurogamer.

93-95%?

I know people are unhappy with DRM but that's still pretty insane. Apparently they see their DRM policy as a success and it is "a clear reduction in piracy of our titles which required a persistent online connection". If this percentage represents a reduction in piracy then wow...

Edited 1 times. Last edit by Kingman Cheng on 22nd August 2012 11:15am

Posted:2 years ago

#1

Tim
Senior PR Manager

3 1 0.3
that's what i thought too

Posted:2 years ago

#2

Felix Leyendecker
Senior 3D Artist

182 202 1.1
If only 5% of their customers pay, you have to ask yourself why they even bother with DRM, why further inconvenience their tiny audience?
This figure is either BS or he is talking about emerging markets ONLY.

Posted:2 years ago

#3
I wonder if there is a French mistranslation or they really think DRM is fantastic

Posted:2 years ago

#4

James Prendergast
Research Chemist

735 432 0.6
Added to that is the fact that free to play is generally cheaper to produce and distribute, able to cannibalise existing assets and avoid the costs of getting boxes on shelves

Maybe someone can point out why this isn't possible in normal products that are boxed? I mean, why can't you cannibalise existing assets to make new games? I'm pretty sure that already happens - you only have to look at Warframe to see this in action... then there's the whole boxed-game argument.... isn't that just digitial distribution?!

This "argument" is so full of holes that Switzerland is filing an injunction against him because it looks too much like Swiss cheese!

Posted:2 years ago

#5

Andrew
Animator

148 158 1.1
I don't buy it for a second. He can only be talking specifically about their own products. Like mentioned earlier, DRM is off putting to the legit games buyer, I suspect that if their piracy rates are really that high they should look squarlely at the DRM for the cause.

Posted:2 years ago

#6

Roberto Bruno
Curious Person

104 69 0.7
I was thinking about this bold and risky idea... Making your customers satisfied with your products instead of making them miserable. Trying to get rid of all the inconveniences that usually come with a Ubisoft purchase on PC... Do you actually think it could work for a business standpoint?

nah, probably I'm just rambling.

Edited 1 times. Last edit by Roberto Bruno on 22nd August 2012 2:14pm

Posted:2 years ago

#7

Bruce Everiss
Marketing Consultant

1,692 594 0.4
PC piracy has been massive for a long time. The 93+% piracy rate comes as no surprise whatsoever.
Yves is in a good position to know the facts.

Posted:2 years ago

#8

Roberto Bruno
Curious Person

104 69 0.7
Popular Comment
No, he's not, as there isn't a single reliable way today to have accurate projections about piracy rates.

Beside, that's not even the point. If you are counting in your estimation about piracy rates all those countries like Russia, India, China, Brazil, where your products aren't even offered to potential customers in an affordable price range, then complaining because legions of penniless kids are downloading them it's pointless.

What a savy company should be concerned about is making their products more and more appealing to buyers and expand their customer base, not fighting illegal downloads with systems that annoy legit customers.

That doesn't really strike like a great success in their fight against piracy. You could even reduce piracy to ZERO but if you lose even just a 1% of your paying customers in the process, you are making a damn poor trade off.

Posted:2 years ago

#9

Samuel Verner
Game Designer

131 243 1.9
95% pirate rate? maybe more quallity and less drm would help... oh, wait. i forgot the new strategy of ubisoft:
We also take content which we've developed in the past, graphics etc, and we can make cheaper games and improve them over time.

Posted:2 years ago

#10

Malcolm Franks
Studying T151 Digital worlds: designing games, creating alternative realities

5 20 4.0
Popular Comment

Posted:2 years ago

#11

Andrew
Animator

148 158 1.1
I would love to play Anno 2077 but I won't buy it with drachonian DRM, and I won't download it thats for sure. So i just won't play it sadly.

I wonder how many people there are out there who would download it though, DRM hurts everyone but the pirate.

Posted:2 years ago

#12

Kingman Cheng
Illustrator and Animator

952 180 0.2
I wonder how many people there are out there who would download it though, DRM hurts everyone but the pirate.
Indeed, and if anything, I would argue it probably even promotes piracy.

Posted:2 years ago

#13

Nicholas Pantazis
Senior Editor

1,020 1,467 1.4
Pure FUD. There is no evidence to support his figure. Even the piracy tracking measures that do exist are terribly inaccurate, and he seems to have pulled this particular stat straight from where the sun don't shine.

But again, he'd have a lot more legitimate consumers if Ubisoft didn't have the worst PC end-user experience in the entire gaming industry. There is no DRM worse, no company with worse customer service. I haven't bought an Ubisoft PC game since... wow, long time. I don't even remember. I don't pay for games from companies that abuse me as a consumer (I don't pirate them either, I just ignore them).

Of my 300+ Steam games, I don't know that any are from Ubisoft... congratulations Yves... that's an achievement in itself.

Posted:2 years ago

#14
He is wrong in number of ways.

First his number is way off. The largest i have ever seen cited for the industry is 50% and that includes people who buy the game but then get a pirate copy to avoid Disc-lock, or who get a pirate copy to try and then buy a real one once they decide they like the game.

Secondly, his comparison is flawed, he should be comparing F2P to other *online* business models. There is no piracy of subscription MMORPGs because you cannot play them without the server. They return an order of magnitude more money for about an order of magnitude fewer users. they also have lower customer service costs because a paying audience is, in general, better behaved.

This smells to me like someone who made a big career commitment to F2P trying to defend his choice now that the true weakness of Zynga is showing.

Edited 3 times. Last edit by Jeffrey Kesselman on 22nd August 2012 5:05pm

Posted:2 years ago

#15

Frederic Eichinger
Web Developer

33 27 0.8
Popular Comment
As I just did the maths over on the Escapist, I'm posting it here as well:
Ubisoft sales figures:
http://www.ubisoftgroup.com/en-US/press/detail.aspx?cid=tcm:99-47692-16&ctid=tcm:95-27313-32

2011-2012: 1,061.3
At a rate of 1:19 legal to illegal copies, that makes ...
21,226,000,000

606,457,143 new copies of their games are in circulation after this one fiscal year - of which only 3,032,286 were legal copies.
*cough* http://worldofstuart.excellentcontent.com/bruceworld/
This made my day, btw.

Edited 1 times. Last edit by Frederic Eichinger on 22nd August 2012 5:10pm

Posted:2 years ago

#16

Joshua Rose
Executive Producer / Lead Designer

191 81 0.4
Speaking of Steam. Let's do a bit of math here.

Steam boasts over 30 million PC gamers on their service. I'm sure this number is probably higher, but we will go with 30 mil for now.

Yves states the piracy rate is 93-95% of all players. leaving a mere 5-7% of customers as legitimate.

So lets just say between Steam, Origin, GameFly, and all other Digital distribution channels, there's 50 million legitimate users.

Here's the fun part. using 50 million as a conservative estimate, and taking the opinion that only 5-7% of players are legitimate paying customers. that means the total PC gamer market world wide is anywhere from 664.3 million to 1 billion players. If that was true, then PC gaming would have never died out in the first place... not when over 1/5th of the world population is playing them!

I am completely for DRM, because Publishers are well within their right (in my opinion) to protect their intellectual property. To be more specific, I am completely for EFFECTIVE and NON-INTRUSIVE DRM. Any DRM that causes no problems for the customer, and can still be totally effective in the eyes of the publisher, is a win win situation. All this in mind, Even I don't believe the world's PC game piracy rate is 93-95% of all players. Those figures are absolutely over the top.

The thing about F2P games, is generally they are social games. Social games means interacting with others, buying selling, playing etc... interacting with others means internet connectivity required. internet connectivity required at all times to play = DRM. To play the game you're required to get on their servers anyways. But I think a DRM scheme with an online all the time requirement for a game like Assassin's Creed is too intrusive for even my tastes.

What if I want to play Assassin's Creed on my laptop while on a four hour plane ride?

I really can't say too much about Ubisoft's new UPlay platform because I have not researched it enough, but sometimes I wonder if the people on the inside are just as dissatisfied with their DRM scheme as the people are on the outside.

Posted:2 years ago

#17

Jim Webb
Executive Editor/Community Director

2,266 2,405 1.1
93-95% piracy? How the hell did he say that with a straight face?

Posted:2 years ago

#18

Alex V
Executive Editor

11 13 1.2
this is quite funny to read

Posted:2 years ago

#19

Thomas Luecking

69 13 0.2
Oha...Wasn't aware of Ubisoft being a PC only games company ;)

Posted:2 years ago

#20

James Berg
Games User Researcher

159 206 1.3
I can't believe I'm defending Guillemot, but I think folks are missing an important bit:
"Guillemot revealed that free to play has been an effective way for Ubisoft to market product to territories in which PC gaming had been so badly affected by piracy that profit was impossible."
He's talking 95% piracy for some countries, not in general. Whether -that- is a reliable number, I'm not sure, but it's more likely in someplace like Russia or Brazil than it is in the US or UK.
where your products aren't even offered to potential customers in an affordable price range, then complaining because legions of penniless kids are downloading them it's pointless.
I don't understand how they can be 'penniless kids', yet have a gaming PC capable of playing Ubisoft games :p

That being said, Might and Magic VI is probably the last Ubisoft game I'll buy on PC, because of the draconian DRM. Online-DRM stopping me from saving my offline single-player game? Not cool.

Posted:2 years ago

#21

Roberto Bruno
Curious Person

104 69 0.7
I don't understand how they can be 'penniless kids', yet have a gaming PC capable of playing Ubisoft games :p
Hardware is relatively cheap in some of these countries and, even more relevant, buying a PC is usually a family investment, as buying the family's car.

Spending what's often a week of the average salary for a game, on the other hand, isn't a luxury many parents would concede to their children.

Posted:2 years ago

#22

Frederic Eichinger
Web Developer

33 27 0.8
Oha...Wasn't aware of Ubisoft being a PC only games company ;)

Posted:2 years ago

#23

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
He's talking 95% piracy for some countries, not in general. Whether -that- is a reliable number, I'm not sure, but it's more likely in someplace like Russia or Brazil than it is in the US or UK.
Well, that's the thing, isn't it? He doesn't clarify where that piracy rate refers to, so comes across like he's picking numbers out the air. This in turn makes him seem arrogant (assuming people would buy Ubi games if they didn't pirate them) and ignorant (of the wider discussion that could be had regarding piracy, had he used some solid numbers).

In short, he does nothing to add to the discussion regarding piracy, which in turn does nothing to help his contention that F2P is the way forward.

On the assumption that he is talking about, say, Russia, it might be he should go have a word with Gabe Newell, who has striven to get publishers to charge a lower price in countries where piracy is rife, which has made significant inroads into piracy in Russia. As a for-instance, click on this

http://store.steampowered.com/?cc=ru


I don't understand how they can be 'penniless kids', yet have a gaming PC capable of playing Ubisoft games
Anno 2070 doesn't need a very hefty machine to run it. Also, games are repeated purchases. A PC isn't, unless you're upgrading.

Edited 2 times. Last edit by Morville O'Driscoll on 22nd August 2012 9:18pm

Posted:2 years ago

#24

Jason Sartor
Copy editor/Videographer

104 33 0.3
I can believe the 19-1 pirate to legit sold copy, but I am more curious of how many of those 19 pirated copies are games people played repeatedly and consistently as opposed to those who pirated the game, tried it out and never played again (say 5 separate play session and five hours of play time total or less), before they moved on to another different game they pirated.
Would it be 1 of 19 pirated copies are regular users who would be buyers if they had no other choice? Five? 10? Surely, it is not all 19.

Posted:2 years ago

#25

James Berg
Games User Researcher

159 206 1.3
7 hours ago

*cough* http://worldofstuart.excellentcontent.com/bruceworld/
Thanks for that Malcolm.

Posted:2 years ago

#26

Raphael Honore
Localization Assistant Manager

31 3 0.1

Posted:2 years ago

#27

Laurent Mandement
Freelance Journalist

8 2 0.3
The piracy figures are for PC games only. Ubisoft didn't do 1 billion euros in PC sales.

Moreover, when you take a broader look at PC Games, he may not be that wrong. If you don't take Blizzard games into account, recent best selling traditionnal PC games only hit the 3 million mark, at best.
Now look at the most played hardcore free to play games : League of Legends and World of Tanks have more than 30 million players. How come that a community of players that manages to only buy 2 or 3 million games when they're sold in stores, is far larger as soon as a good game is free-to-play ? Isn't it strange ?

Posted:2 years ago

#28

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Laurent Mandement

Don't confuse people by giving them facts.

Edited 1 times. Last edit by Bruce Everiss on 23rd August 2012 1:17pm

Posted:2 years ago

#30

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Malcolm Franks

Ad hominem rubbish, you should be ashamed for propagating it.
Do you know Stuart Campbell's reputation?

Posted:2 years ago

#31

Kingman Cheng
Illustrator and Animator

952 180 0.2
http://www.geekwire.com/2011/experiments-video-game-economics-valves-gabe-newell/
Beat me to it Morville!

Whilst there will never be a 100% solution for countering piracy, Gabe has a great mentality towards it which is clearly working out very well for them. Taking another approach is pretty much a must because no matter what anti-piracy technology people introduce, it's inevitable, someone will find a way around it.

Piracy will never be completely and utterly eradicated to a clean slate, so convincing their audience to do so otherwise is a very brave move. Imagine telling people about a decade ago you're going to 'out-service' the pirates!

Edited 1 times. Last edit by Kingman Cheng on 23rd August 2012 10:32am

Posted:2 years ago

#32
he does nothing to add to the discussion regarding piracy, which in turn does nothing to help his contention that F2P is the way forward."
There is nothing to add to the discussion* that has not been said a million times before.

happening.

* such as it is; it's more of a shouting match.

Posted:2 years ago

#33

Mariusz Szlanta
Producer

16 13 0.8
It is interesting that successfull and innovative company like Ubisoft may show such a complete lack of understanding of PC market.

Back to the point - piracy of full-price boxed/single-player product in Eastern Europe and Russia circulates around 90%. It's surely better in the US or Germany but probably similar in Southern Europe and worse in Latin America and Asia. Most Ubisoft's PC games are boxed and single-player. Add up the most stupid DRM ever, high and unflexible prices (only Steam makes an effort to adjust prices to different markets and to promote heavily) and it's possible that they ended up with only 5-7% end-users paying.

Heroes of Might and Magic, Silent Hunter or The Settlers could easily have that 30 mil of users LoL or Tanks enjoy nowadays, had Ubi only grabbed that opportunity.

Posted:2 years ago

#34

Malcolm Franks
Studying T151 Digital worlds: designing games, creating alternative realities

5 20 4.0
The DRM that Ubi uses doesn't do anything to prevent piracy. Do they really think that F2P for single player games will solve the problem? What's to stop the premium content from being pirated too?

Bruce: Ad hominem, really? Seems quite valid to bring up that your opinions on piracy can be seen to be on shaky ground on previous occasions.

Posted:2 years ago

#35

Joshua Rose
Executive Producer / Lead Designer

191 81 0.4
@Malcom: I'm not in any way for or against the article you posted, however I will ask you this. Your sole argument is based on a not so appealing article on a site which has no real credible value, and has not had an update since July of 2010? You're arguing about an alleged editing of a blog, by posting a link to a blog, that talks about how the guy edited a blog. (yo dawg, I heard you like blogs).

But seriously, unless this site actually has credibility (which it doesn't seem to), are we really supposed to immediately change our opinion of his statement based on the disgruntled ramblings of somebody who could very well have been a plant to begin with way back when everything in the blog actually happened?

Whether EA or Ubisoft wants to admit it... they're doing their own thing because they're getting fed up with Steam (my personal opinion based on observation). EA did their own thing because Steam wouldn't let them have an in-game store (if I remember correctly), for a new release. By doing this, EA cuts Valve out of the profit, and Gabe needs his doughnut ms no surprise they've finally come out with their own platform. I honestly think the online-DRM scheme they developed with UPlay so long ago, is very unfavored by the majority of Ubisoft. But people like Yves, continue to push it because they believe the piracy is so rampant (according to their figures).

F2P is just another form of DRM, because you have to be on their servers most of the time to play the game, and you have to pay for stuff using their system, and you have to log in with their account system... So how is F2P different from UPlay, when you still have to be online all the time?

Posted:2 years ago

#36

Andrew Ihegbu
Studying Bsc Commercial Music

451 162 0.4
The annoying thing for me about F2P games is not the nickel and dime process, but the fact the they are really just an alternative to a subscription not a purchase.



Edited 1 times. Last edit by Andrew Ihegbu on 23rd August 2012 4:44pm

Posted:2 years ago

#37

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
@ Bruce and Joshua

The World of Stuart Bruce Everiss/piracy article linked to is written by Stuart Campbell, a pretty well-known UK journalist and developer. His current site appears to be this:

http://wosblog.podgamer.com

An interesting (though rambling) interview is here

http://wosblog.podgamer.com/2010/11/01/pussies-galore/

I couldn't speak for the veracity of the Bruce Everiss/piracy article, but I remember Stu's work from gaming magazines a good 2 decades old, so I have no reason to doubt the piece. Your Mileage May Vary, of course. :)

Posted:2 years ago

#38

Nicholas Pantazis
Senior Editor

1,020 1,467 1.4
@ Laurent Except, you know, all those PC games that have recently sold more (sometimes far more) than 3 million units (mostly digitally) like Portal 2, Battlefield 3, Left 4 Dead 2, Skyrim, Minecraft, Terraria, Dungeon Defenders, Arma II (not there yet but on its way), and SWTOR (subscriber numbers are bad, but it sold more than 3 million).

But, you know, it's TOTALLY logical to remove Blizzard from the PC equation. Hey! Let's try that with HD game consoles! How many console games not from Activision and EA break 3 million units? HInt: Most companies have few if any games that can break that figure. In Ubisoft's case it's nothing without "Assassin's Creed" slapped on the box.

Edited 2 times. Last edit by Nicholas Pantazis on 23rd August 2012 6:28pm

Posted:2 years ago

#39

Paul Shirley
Programmers

178 150 0.8
@ Bruce and Joshua and Morville

Those of us active in the industry at the time remember Imagine pissing away money on 'rock star excess' and none of us knew any drugs strong enough to explain the products they chose to make. Piracy may have knocked a few weeks life off the already dying beast but mismanagement killed it.

Posted:2 years ago

#40

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
ohhh... Interesting.

Posted:2 years ago

#41

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