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Free Europe: The EU tackles F2P

Free Europe: The EU tackles F2P

Fri 07 Mar 2014 8:00am GMT / 3:00am EST / 12:00am PST
Free-to-Play

F2P devs should welcome regulation - it'll prove that most of them are doing nothing wrong

Free to Play games continue to attract the attention of regulatory bodies around the world. Last year, Japan declared the "kompu gacha" system used by many F2P games to be illegal, leaving huge Japanese F2P publishers like GREE and DeNA scrambling to replace the lucrative mechanic in their games. Last month, the Office of Fair Trading in the UK issued a set of rules for F2P designed to improve transparency for consumers and prevent companies from targeting children. Now, the European Union has turned its attention to the sector, raising the possibility of strict regulation across one of the largest and most lucrative markets on the planet.

The EU's investigation into F2P is the most interesting and potentially important intervention in this market so far, not least because the EU has a pretty admirable track record of enacting consumer-friendly legislation and regulations which individual member states' authorities, fearful of losing political donations or of being portrayed as "anti-business", lack the spine or the teeth to tackle. Moreover, the sheer size of the market for which the EU legislates means that the world's largest companies have little choice but to fall in line with EU consumer rules. This means that the European supranational decisions on F2P have the potential to be more strict than any national rules thus far, and to have a more meaningful impact on the business as a whole.

As regular readers will know, I am in favour of free to play as a business model; it is not, of course, a panacea for the industry, nor is it universally applicable across all games, genres, or audiences, but it is a useful and versatile new tool in the game creator's toolbox. It unquestionably works well for some games and allows creators to reach audiences who would never be available to them in the old paid-for business model. Moreover, when it's applied correctly (which is to say, ethically, intelligently and generously), it turns out some genuinely fun games. If the fact that it's free-to-play completely ruins your ability to enjoy something like Puzzle & Dragons, Hay Day or CSR Racing, or perhaps even League of Legends, then I'd suggest that the problem lies with your ideology, not with the game design.

"If the fact that it's free-to-play completely ruins your ability to enjoy something like Puzzle & Dragons, then I'd suggest that the problem lies with your ideology, not with the game design"

Yet either in spite of, or because of, this positive outlook on F2P, I welcome developments like Japan's banning of kompu gacha, and the OFT's intervention in the UK. Why? Because this is a new field, which many developers are still trying to figure out, and I think it's healthy to establish some common sense ground rules. Kompu gacha was a horrible, abusive and deeply misleading approach to monetisation, one founded on the same principles of casino gambling - making the consumer feel like they can win relatively easily if they only spend a little more money, while in reality the mathematical odds are stacked incredibly heavily against them. The OFT's insistence on clear communication of costs and proper customer support systems, along with its prohibition on the targeting of children and one-click purchasing, equally deal with unpleasant, misleading abuses of F2P

Rules targeting such abuses are welcomed by the majority of F2P developers, and by the games business as a whole, because abusive games and practices undermine the whole sector. Abusive games become a stick with which the entire notion of F2P can be beaten; not just by core gamers or the specialist press, who are largely outside the target market anyway, but increasingly by the mainstream media, by consumer groups and perhaps most damagingly, through word of mouth in the very markets with which F2P titles wish to engage. Good, well-enforced regulations will help on two fronts. Firstly, they will eliminate the small number of egregious offenders, while forcing the tech giants who operate channels like the App Store and Google Play to act in a more responsible manner. Secondly, much to the disappointment of F2P's relentless critics, the regulations will also demonstrate how few serious offenders there actually are - and how many of the core gamers' bÍte noire, like King and Zynga, are already staying within the lines of these proposed regulations.

One point which has been raised - with concern by those serious about F2P, and with glee by the legions of those who view F2P as a threat to their hobby - is that the EU's statement specifically mentions the use of the word "free" as being potentially misleading. For many of the enthusiast publications covering the EU's enquiry, the take-away from this is that the EU is about to ban the entire term "free to play".

"Herein lies the second reason why "free to play" isn't going away, as a term - because, contrary to what many of its critics seem to believe, it's actually an accurate description"

This isn't going to happen. It's not going to happen for a number of reasons. Firstly, the word "free" is already in widespread usage across a whole range of industries to describe products or services which have no up-front cost but can be augmented with paid-for extras. If the EU were to decide that "free to play" was a misleading term, would Skype also have to stop describing its basic service as "free"? How about Flickr, or any number of other web services whose main offering is free but power-user features are behind subscription walls? Plenty of newspapers and magazines let you read a certain number of articles per month without payment, then charge a subscription fee to access more - would these no longer be "free"? How about World of Warcraft's free trial, which asks for payment beyond level 20? Is that no longer free? In the real world, would a car test drive no longer be "free" since you don't get to keep the car without payment? Would coffee shops near train stations have to stop offering free small coffees to commuters, as some do, on the basis that you can also pay to buy a doughnut or a sandwich? Would theatres have to stop saying they give "free" tickets to students, on the basis that they then sell ice cream and bottled water in the auditorium?

Some of those examples may seem ridiculous, but the underlying principle is the same - if those are ridiculous, then so is the idea that a game you download and play for free isn't actually "free" because it has optional purchases. Herein lies the second reason why "free to play" isn't going away, as a term - because, contrary to what many of its critics seem to believe, it's actually an accurate description. The vast, vast majority of successful F2P games are actually free to play. Candy Crush Saga, criticised constantly for being some kind of psychologically manipulative money-printing machine that preys upon the weak of mind, extracts money from less than 30% of the players who finish the game. Over 70% of those who make it to the end do so for free. I've played plenty of F2P games in recent years, some of them for several weeks or even months, and only Puzzle & Dragons and Hay Day ever got me to pay up. I personally wouldn't want F2P games to be the mainstay of my gaming diet, but in terms of entertainment time to price paid, the value on offer is undeniable. If you can finish a game or (in the case of games which don't end, as such) play it for weeks without handing over a penny, I don't see how that's not "free to play". The costs are optional - most games make this perfectly clear. Puzzle & Dragons, the most successful F2P game on earth, actually reminds you every time you start the game that it's possible to play forever without paying.

Casting aside the notion that "free" is a misleading term, as I expect the consultation will, much of the rest of what the EU proposes is common sense and broadly in line with the OFT's rules. What I think is of particular interest is that the EU is focusing its attention on the right places. It doesn't seem interested in putting pressure on developers and game creators, but rather believes that Apple, Google and the other platform operators are ultimately responsible for consumer protection on their platforms. Indeed, my primary criticism of the OFT's regulations would be that some of the things they demand from app and game creators are actually outside their control for the most part - for example, the prohibition of one-click purchases made without the cardholder being present is a problem which needs to be solved within iOS and Android, not at the level of individual pieces of software.

"I'd like to see the EU forcing the App Store, Google Play et al into even more consumer-friendly behaviour than they are currently suggesting"

If anything, I'd like to see the EU forcing the App Store, Google Play et al into even more consumer-friendly behaviour than they are currently suggesting. I'd like to see compulsory implementation of locked accounts for children on devices, with attached "pre-pay" wallets that can be charged by parents - giving children freedom to spend, and parents absolute peace of mind regarding spending limits. I'd like to see running monthly totals showing how much I've spent in a certain billing period when I make an in-app purchase, and the ability to create alerts that trigger when monthly or weekly spending exceeds certain levels. While I think the idea of a ban on the word "free" is ludicrous, I'd certainly like to see guidelines which insist that "free means free"; that in-app purchases must be optional, not compulsory for progress.

The principle on which many developers defend F2P is that it is absolutely right and fair to allow fully informed adults to make whatever buying decisions they wish. This principle is often abused, especially by self-styled neo-liberals, who think that it means the marketplace must be a free-for-all where any business practice is justified because those participating are adults. The key term to bear in mind here is "fully informed adult"; notions of market equilibrium, price discovery and the "invisible hand" of the markets break down when the provision of information is too asymmetric, meaning that one party (usually the consumer) doesn't know the same things that the other party (usually the provider or retailer) knows. This is why kompu gacha was a nasty business practice; it gave consumers an impression which was completely misleading, hiding the mathematical reality of its enormously high odds behind cutesy exhortations to spend. Businesspeople who truly believe in markets should also believe in making information as symmetric as possible, so that those markets can function effectively. Making consumers more aware of what they're spending, when they're spending it, and of the value of the things they're purchasing (in terms of whether they're required or optional for progress in the game, for example), is how you make markets healthier and more sustainable.

Opponents of free-to-play who are revelling in the ill-conceived hope that the EU is about to deal a severe blow to the industry might be surprised to find that F2P's proponents are equally hopeful about the outcome of this latest regulatory effort - and will largely be welcoming of its results. It all comes down to a simple reality; free to play, for the most part, isn't doing anything wrong or anything underhanded. Legislators and regulators carefully considering the industry will recognise that with ease, even if core gamers' visceral reactions blind them to such conclusions. A reasonable regulatory framework for F2P games will change surprisingly little, but will be good for customers and developers alike.

28 Comments

Jakub Mikyska CEO, Grip Digital

208 1,130 5.4
Knowing the tooth-less way of EU's dealing with the right problems in the wrongest way possible, my guess is that EU will issue a law that every new sold phone has to be half-covered by a warning label saying that "software in this device may cause you to spend more money than you initially expected".

Posted:8 months ago

#1

Dan Tubb Investment manager, Edge Investment Management

30 149 5.0
Popular Comment
Depends on your politics I guess. Personally I think regulation really serves a vast army of unnecessary politicians and bureaucrats who need supporting through excessive taxation. The reason you cannot hire extra people and your customers cannot but extra products is because over half of European productivity is being sucked up by its various tiers of government.

Gamers are no idiots, if they do not like you game they will not play it, and if they think the Free in F2P is a misnomer they will mock it. What they do not need is a bunch of career politicians who have never played a video game in their life justifying their own existence by slapping down rules and regulations.

And mark my words, once they get a taste for regulating a new industry, they will not stop, ever. Get ready for a tidal wave of new regulations.

Edited 2 times. Last edit by Dan Tubb on 7th March 2014 9:38am

Posted:8 months ago

#2

Anthony Gowland Lead Designer, Outplay Entertainment

214 757 3.5
Reminds me of "you should only be worried about state surveillance & CCTV everywhere if you have something to hide".

Posted:8 months ago

#3

Keldon Alleyne Handheld Developer, Avasopht Ltd

455 443 1.0
Popular Comment
Gamers are no idiots, if they do not like you game they will not play it, and if they think the Free in F2P is a misnomer they will mock it
Yes, but I'd imagine gamers would like to be able to search for "free games" and actually have a set of actually-free games returned, knowing at first glance whether a game is free without having to trawl through the lengthy description while iterating through a long list of potentially-free games.

Posted:8 months ago

#4

Robin Clarke Producer, AppyNation Ltd

331 784 2.4
If the fact that it's free-to-play completely ruins your ability to enjoy something like Puzzle & Dragons, Hay Day or CSR Racing, or perhaps even League of Legends, then I'd suggest that the problem lies with your ideology, not with the game design.
Well said!

@Dan Tubb

I guess this is why bookmakers are shutting up shop all over the country and the lottery doesn't bring in millions every week. Not everyone makes good or informed decisions and kids certainly can't be expected to.

Posted:8 months ago

#5

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

925 1,569 1.7
I'm thinking they should be tackling the Crimea. Sense of perspective here guys.

Posted:8 months ago

#6
Crimea is being tackled, just not in the way us lay public are expecting. The fall of Crimea has long been in the planning anyways...

Posted:8 months ago

#7

Daniel Kromand Product Manager - Games, Mobile, GameDuell

25 37 1.5
Popular Comment
@ Paul: Yes, whenever there is a crisis in foreign policy, every single person in a big trans-national law making organization should drop everything in their hands and rush to it. Who cares about commerce and agricultural policy when the Russians are coming?

Edited 1 times. Last edit by Daniel Kromand on 7th March 2014 2:04pm

Posted:8 months ago

#8

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

925 1,569 1.7
I care about all those things too Daniel. And a thousand other issues ahead of this one.

Posted:8 months ago

#9

Mariusz Szlanta Producer, SEGA Europe

31 27 0.9
Popular Comment
Skype doesn't break my call with 2 hours wait to build upgrade and coffee does not turn out to be half-coffee that becomes full coffee when I drop magic upgrade +1 on top of it.

There is big difference between true F2P games that offer free core gameplay loop and smart apps like CCS that don't.

I can log into League of Legends or World of Tanks and play anytime I want.

I cant log and have a nice 5 minute go in CCS or CoC anytime I want. Its a cheat and calling these games F2P is abusive.

Actually, I quite like how someone smart at King managed to manipulate even an experienced journalist like you. Percentages are next to useless if there is no hard number to start with. 70% cited can be as little as 0.5% of total user base and it is quite obvious that money are made on people who do not finish the game but are good enough to think that they can progress with a little help of a golden friend.

Last but not least, there is pretty blatant use of techniques that have nothing in common with game design or good user experience but a lot with gambling and psychology.

CCS uses very basic financial pyramid scam trick with pulling more and more people whose time is going to pay for your gain and CoC preys on revenge instincts for stolen resources which are obviously rather scarce.

CCS also preys on parental emotions. Big, sad eyes of centre of parent world who ran out of hearts are not that easy to stand up to. [Disclaimer. Trick above Im personally ok with. Its actually a good lesson for a kid if done correctly].

Im perfectly fine with all of it as long as these products dont pretend they are video games. Its a business which is, in its core, completely different than video games but profits a lot from stolen identity.

I do hope that EU policy makes, known for their idiocy, dont understand a word of it and by mistake introduce good legislation separating gambling and videogames once more.

Edited 21 times. Last edit by Mariusz Szlanta on 7th March 2014 4:09pm

Posted:8 months ago

#10

Mariusz Szlanta Producer, SEGA Europe

31 27 0.9
Guys, are there some hidden filters on words or is there a bug? I can't get whole sentences displayed in my comments.

Posted:8 months ago

#11

James Brightman Editor in Chief, GamesIndustry.biz

259 457 1.8
Apologies Mariusz, we're having the tech team look into it.

Posted:8 months ago

#12

Brian Smith Artist

198 93 0.5
I've no particular problem with F2P as a mechanic but I would like to see terms differentiate between free and F2P. At the moment on google play I can call up free games as a category but I can't differentiate easily between games that are free totally using ad support or titles that are free to play with in app purchases. Having recently set up a tablet for my kid I would welcome some regulation in this area to help consumers recognise the real nature of a title and what progression in it will reveal. I have no problem with whatever business model as long as it's clearly obvious prior to use. Currently it's not.

Posted:8 months ago

#13

Mariusz Szlanta Producer, SEGA Europe

31 27 0.9
Ok, it looks like reason for vanishing sentences are apostrophes. As long as I type dont, cant etc., its all good.

Edited 3 times. Last edit by Mariusz Szlanta on 7th March 2014 4:12pm

Posted:8 months ago

#14

Dan Tubb Investment manager, Edge Investment Management

30 149 5.0
Mariusz I find I need to strip out all punctuation and symbols other than full stops. So avoid contractions and if like me you usually use a lot of commas and semicolons make sure you do not read your sentences out loud or you will suffer asphyxiation before you get to the end.

Posted:8 months ago

#15

Caspar Field CEO & Co Founder, Wish Studios Ltd

40 93 2.3
'If the fact that it's free-to-play completely ruins your ability to enjoy something like Puzzle & Dragons, Hay Day or CSR Racing, or perhaps even League of Legends, then I'd suggest that the problem lies with your ideology, not with the game design.'

Come on! Let's not over-think this! It's pretty hard not to play those games and feel that they'd be more fun if you'd just been able to pay for them up-front. Or does someone have a good argument that having to wait for more fuel so I can keep playing CSR is somehow a fun thing to do...?

I thought the industry made a massive leap forward when it left the arcades, where money had a direct link to game time (or character health in titles like Gauntlet). Right now, the impact of F2P on game design feels a little regressive.

Posted:8 months ago

#16

Brian Lewis Operations Manager, Aeria Games Europe

139 90 0.6
@Brian Smith

You posted a very interesting statement:

"At the moment on google play I can call up free games as a category but I can't differentiate easily between games that are free totally using ad support or titles that are free to play with in app purchases"

The reason that these are not differentiated on the app site is that neither requires an up front expenditure for the customer. This is why they are marked as 'Free'. This is in comparison to apps that have an up front cost. Now, both paid, and free games can have an additional costs, in many forms: advertising, subscription, in app purchase, etc. However, none of these are relevent to the free/paid nature of the game.

Posted:8 months ago

#17

Robin Clarke Producer, AppyNation Ltd

331 784 2.4
Come on! Let's not over-think this! It's pretty hard not to play those games and feel that they'd be more fun if you'd just been able to pay for them up-front.
I've been playing Puzzle & Dragons for months and never felt that I was missing out on anything by not paying, or that the game would be better if I'd have had to pay upfront. Have you played it?

Posted:8 months ago

#18

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

469 178 0.4
"The reason that these are not differentiated on the app site is that neither requires an up front expenditure for the customer. This is why they are marked as 'Free'. This is in comparison to apps that have an up front cost. Now, both paid, and free games can have an additional costs, in many forms: advertising, subscription, in app purchase, etc. However, none of these are relevent to the free/paid nature of the game"

They absolutely are. Do you think any of the ad supported games out there suffered from the Japanese lawmakers actions? Do you think that anyones kids will accidentally run up a $5000 bill on an ad supported game? Of course not.

Nobody out there that has been accused of making terrible baiting "games" ever made them supported by Ads without IAP as an additional revenue stream. There is no Farmville/Simpsons Tapped Out without Gold/Paywalls.

Edited 1 times. Last edit by Andrew Ihegbu on 7th March 2014 6:16pm

Posted:8 months ago

#19

Brian Smith Artist

198 93 0.5
@ Brian Lewis - It's not that I don't understand why both types exist in the same category. It's just that they shouldn't IMO. In your view it's all about upfront cost. In my view it's about two distinctly different models of game under the one banner.

Posted:8 months ago

#20

Curt Sampson Sofware Developer

596 360 0.6
Thank you Mariusz: you did a better job than I would have explaining why CCS is not free. (In particular, trying to pass off "go recruit more players for us" as not being a form of payment really galls me.)

When I first heard about this EU effort, one of the ideas that came to mind was that it would be nice to have some sort of description, for every game, of all the potential costs (including non-financial ones such as having to recruit "friends"). Creating a taxonomy for this and allowing one to filter searches based on it would be fantastic.

This is something that could even be done, to some degree, as an independent project.

Posted:8 months ago

#21

Adam Campbell Associate Producer, Miniclip Ltd

1,200 1,017 0.8
I'm thinking they should be tackling the Crimea. Sense of perspective here guys.
Like I said in the last thread about the EU, its part of the job of the organisation as a whole - and the individuals who specialise in this area. Why should every person elected to the EU be focussing on Crimea and have no room to look at anything else?

I think what you're really saying is that you want the "EU" or any political organisation to go away and stop meddling in your work, thus using Crimea as an excuse. Fair enough, you don't want them involved but it really doesn't negate their purpose outside the headline grabbing stories.

Some of the same people who share this view now, will be asking for them to come back and meddle when it suits them. Like if the used game market faces further sanctions from publishers ;)

Personally, I'd be more willing to work with government to help ensure that policies are in the better interest of both our businesses and consumers, rather than just telling them to go away which won't happen any time soon.

Posted:8 months ago

#22

Paul Johnson Managing Director / Lead code monkey, Rubicon Development

925 1,569 1.7
I think market forces are the best thing for all parties and government should stick to the things that need a government to get done.

Posted:8 months ago

#23

Keldon Alleyne Handheld Developer, Avasopht Ltd

455 443 1.0
Popular Comment
I think market forces are the best thing for all parties and government should stick to the things that need a government to get done.
Yes, and policing big business needs the government. People need policing, so I'd imagine the corporate structures that people create would require the same scrutiny, lest business just becomes a lawless land and a platform for where you can be as criminal as you want.

It's easy to cherry pick scenarios for keeping the world just but let's not delude ourselves. Organisations should not be exempt from governing. The reason you don't like it is that you want a free pass to do anything without any responsibility. You want the freedom to do anything (including but not limited to cheating people). And I've seen your games, they are good and well thought out so none of this applies to you unless you have a future intention to do absolutely anything (including unethical practices) to make a *profit.

*: I could say, "to survive", but that would be incorrect.

Edited 1 times. Last edit by Keldon Alleyne on 9th March 2014 8:55am

Posted:8 months ago

#24

Yiannis Koumoutzelis Founder & Creative Director, Neriad Games

363 208 0.6
"If the fact that it's free-to-play completely ruins your ability to enjoy something like Puzzle & Dragons, then I'd suggest that the problem lies with your ideology, not with the game design"

Great article! Very well said!
While this is not always the case, since even monetization schemes need to be implemented in fairness and good taste, same as game design, it is quite often the case that games with bad monetization strategy are also bad games or clones of good games with an arbitrary monetization scheme slapped on top.

Edited 1 times. Last edit by Yiannis Koumoutzelis on 9th March 2014 12:47pm

Posted:8 months ago

#25
Free= We want to make money from you somehow games.

Posted:8 months ago

#26

Adam Campbell Associate Producer, Miniclip Ltd

1,200 1,017 0.8
I think market forces are the best thing for all parties and government should stick to the things that need a government to get done.
Basically what you said before, just without Crimea. Market forces are a fact of life and will influence many things, but I don't think we have a very good record in this country (or the world) when it comes to leaving them unregulated.

Posted:8 months ago

#27

Rick Lopez Illustrator, Graphic Designer

1,269 941 0.7
Sorry but free is free... there is nothing free about free to play. Because to continue playing you have to pay. It should be called pay to play (P2P). They are purposly handicapped for this purpose.

Posted:8 months ago

#28

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