Cousins predicts "free-to-play equivalent of Skyrim" in two years

Ngmoco Sweden boss expects F2P dev budgets of $1bn, companies hitting market caps of $100bn

Ngmoco's Ben Cousins has predicted a free-to-play equivalent of a high-end single-player experience like Bethesda's The Elder Scrolls: Skyrim in the near future.

Speaking at the Free-2-Play Summit in London today, Cousins described the past, present and future of the free-to-play business model in terms of three versions: 1.0, 2.0 and 3.0.

Version 1.0 is essentially the model that was established in Korea in the late Nineties with games like Kart Rider, where in-game transactions were limited to cosmetic and customisation items, and faster levelling. With 1.0, the average lifetime value of a user was $5.

A game like Skyrim, where you accrue skills and equipment over time, that you can play for hundreds of hours, is actually one of the easiest games to develop for a free-to-play model

Ben Cousins, ngmoco

Version 2.0 is the model that dominates now, practiced by companies like Zynga, where "unpleasantness" is deliberately added to incentivise the player to spend in order to remove it - a specific building in CityVille, for example, which takes a long time to construct or can be accelerated with a small outlay. With 2.0, the average users' lifetime value reaches around $20 per user.

The future of free-to-play is version 3.0, what Cousins calls the "monetisation super-highway". In this version, there will be no upper limit to the amount players can spend, with every income and taste catered to in-between.

More importantly, the sort of items available for sale will be far more appealing. Under 3.0, in-game purchases will include gameplay features and functions that target positive player responses like excitement, delight and risk-taking. Cousins compares spending money in contemporary free-to-play games to "buying insurance," but that will gradually change in the coming years.

To date, free-to-play games have been limited to a narrow field of genres, and are generally synchronous and asynchronous multiplayer experiences. However, Cousins posits that, with Version 3.0, the goal for free-to-play developers is the sort of experiences that, at present, are almost exclusively found in full-price console and PC retail.

"I believe that single-player will be the next to be cracked in terms of freemium monetisation," he said. "And I'm talking about traditional, story-based, scripted, linear and non-linear single-player that we see on consoles."

Just as storytelling, characters, cinematics and scripting played a more and more important role in console gaming as the technology advanced, it will also enter into the design of free-to-play games. Indeed, in the long-term Cousins believes that, given time, no genre or game-type will be off-limits.

"I am totally 100 per cent confident - I will bet large amounts of money - that we will have, in the next few years, a free-to-play equivalent of Skyrim," Cousins continued. "A game like Skyrim, where you accrue skills and equipment over time, that you can play for hundreds of hours, is actually one of the easiest games to develop for a free-to-play model. That would be a big hit."

I believe that single-player will be the next to be cracked in terms of freemium monetisation.

Ben Cousins, ngmoco

Version 3.0 will push the average users' lifetime value to $60 - the price of a console game at retail. Combine this with the vastly increased number of players and you get game companies with market caps far exceeding the major players of today.

Cousins claims that, "there are now several live free-to-play games that will have billion-dollar lifetime revenues," but the success of, say, Riot Games' League of Legends will be seen as relatively small compared to the most successful products under Version 3.0 - and the same goes for the console industry's biggest franchises.

The "best case scenario" for a console release today is 20 million unit sales at $60, with a development budget of $100 million and a marketing budget of around the same value.

However, the most successful free-to-play games in the future will have lifetime user values of $60 with 200 million players - including emerging markets like India and Africa. Lifetime development and marketing budgets could hit $1 billion each, but the potential revenue will push companies with market caps of $100 billion.

"In the future I believe free-to-play will be the way that nearly everyone plays games, it will be nearly every genre, and it will be nearly every platform."

Cousins has been involved with free-to-play experiences since 2005, when he worked on PlayStation Home at Sony. From there he moved to DICE, where Battlefield Online and Battlefield Heroes gave him early insight into the sort of free-to-play games that would proliferate over the next few years.

He is currently leading ngmoco's Swedish studio, which has brought in numerous console veterans to develop AAA, core-focused free-to-play games for mobile.

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Latest comments (14)

Bruce Everiss Marketing Consultant 10 years ago
I agree with the headline.
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Thomas Dolby Project Manager / Lead Programmer, Ai Solve10 years ago
Gotta say I don't need much convincing on this either, we're seeing more and more quality F2P games coming out and this seems like the next logical step. It'd certainly be the step forward to get me to engage with the business model.

Currently, games where you end up paying to overcome annoyances is really strange to me, I'd prefer to just pay up front and have the enjoyable experience throughout. Now if you offer me an enjoyable experience without an up front cost, but charge me based on how much content I access along with other useful bonuses (not hats!), that's something I can sign up for.
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Dave Herod Senior Programmer, Codemasters10 years ago
Or, a hybrid, where you can play like this if you want to or alternatively pay $60 up front to unlock all content and play without the issue of money coming up in the game again. Seriously, as a consumer I absolutely despise this model. It preys on people who mentally struggle to keep track on how much they've spent, preys on kids dipping into their parents credit cards and running up huge bills. How much would this business model be worth once parents start banning their kids from ever playing games because they've been burned by huge bills they had no idea their kids were racking up?
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I can see it happening, and when it happens it's going to hurt the industry. Take a Skinner's Box, stick a game interface on it, and the option to spend as much money on it as you want, and you have a F2P game. Now rehash it many times with a slightly edited aesthetic or with slightly different "game play" so that you appeal to more and more audience share.

What this guy calls "3.0", I call "stuff that's been rehashed in the mainstream market too many times and doesn't have any unique fun factor". So, it seems like people who may not be designers are approaching this as "how can we make a product to follow this business model that feels like a game? That game looks fun - let's make one that's F2P" rather than "let's make a unique game, and use this business model because it gives the most exposure to new players. It'll be like a demo for new players, but we can keep adding content as we go, and it's easier than having to release new packages every year or two and deal with distribution".

And what's really scary is that there's going to be a generation of kids that grow up playing games in this model that will get used to the worst of the F2P model games - the "pay to win" variety - and it'll sculpt a really *****y outlook on life. You get ahead by spending time being a part of the game instead of spending time getting good at the skills the game tests, or you get ahead by spending money.
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Bradley Pearce10 years ago
the F2P model is gaining speed but a budget of a billion dollars in 2 years!? That's optomistic and if free to play games continue the way they do they most certainly won't come as a good enough experience as skyrim is. It most certainly won't warrant the value of a console game customers get from a title like skyrim, so in effect this idea of a full console experience for free won't be free if the customer wants the same value.

Of course, maybe it'll be different.
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James Berg Games User Researcher 10 years ago
Bradley, that was lifetime budget. Still, I agree the figure is silly in the short-term.

I can't see F2P delivering the kind of *quality* that Skyrim has, on a F2P budget. You could create a fantasy game with procedurally generated random content that wasn't nearly as engaging or meaningful, sure, but one of the key pieces to Skyrim is that the content is high quality. I just can't see that amount of dev time being poured into a F2P game - who can afford that level of risk?

I still like to point at Turbine as a company that's been doing MMO F2P very well. They have a monthly fee where you get unlimited access to everything, plus some 'free' points to spend in their store, and then they have the F2P buy-what-you-use model. Nothing is pay-to-win, and the core game is enjoyable without spending money. When I was playing DDO and LOTRO, I bought their VIP pass (standard MMO monthly rate), and -then- spent more money in their store. They more effectively monetized me than WoW and SWTOR have, and I thanked them for it.
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Private Industry 10 years ago
Am I the only who doesn`t see that concept working of a big Skyrim like game being F2P and making a lot of money?

Let`s have a look why current F2P games make money. They are all online, Lord of the Rings, Star Trek Online, FarmVille etc. All online games and why do people pay? To stay competitive or have better gear than other players or a better farm than their friends. What aspect is not present in singleplayer games? You don`t need to have better equipment than your friends to stay competitive because there is no competition.

You just have to understand the F2P user base and why you make money with it at the moment. You could charge The Old Republic players 15 bucks a month and still sell them weapons and gear for real money because they want to stay ahead of the other people to play with or against. I played over 100 hours of Skyrim and a considerable amount of that time was me looking for the stuff to build my dragon armor. If I could have bought it for 5 bucks and paid 0 for the game in the first place would I do that? No, because it doesn`t bring my any advantage against other people I`m playing with or against. Would I have bought great gear in WoW if I could for 10-15 bucks on top of the subsciption? Yes.

Skyrim is a singleplayer game with no multiplayer component at all hence there will not be a sucessfull F2P equivalent of Skyrim unless you really try to rip off people buy selling them each quest seperate, make it mandatory to have certain equipment to progress, make the game so hard with normal ingame equipmant that you need to buy some or selling the ending as DLC. But that is only a practice that Capcom would/is do(ing) I don`t think any F2P developer would be so insane to try screwing over their customers that much.

Edited 1 times. Last edit by Private on 28th March 2012 8:47pm

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James Berg Games User Researcher 10 years ago
Werner, your assumption is that competitiveness is the only reason people pay, and that's incorrect. Consider the core reason we pay for games at all - to have fun. You can slap a price tag on most 'fun' things in games, and if the users think the fun outweighs the cost, it could sell.

LOTRO, for example, makes a lot of it's money from purely cosmetic items, like fancy cloaks and outfits. Zynga games sell access in terms of 'Energy' (or whatever equivalent mechanic is being used).

A Skyrim-style RPG could possibly work as F2P - sell questlines separately, sell classes/races, sell in-game gold, etc. The challenge would be investing enough to make the quality worth paying for.
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Private Industry 10 years ago
I reckon that would depend on the type of game, something like a complex and huge RPG has probably a more strickter and core gamer base then let`s say a LOTR MMORPG and even cosmetic items in MMO`s are still "look at me and how cool my character looks compared to yours"
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If the "game" is really a Skinner's Box, people might be compelled to pay money on a game without a competitive factor anyway. How competitive is Farmville?

These games tend to operate on combinations of random factors (gambling with tokens or the equivalent bought with real money for the chance at a good item at a discount, or as the only way to get a good item), time release (you have to wait and come back - and the evil thing Farmville does is make you come back before another timer or you lose your advantage, so you have to babysit the game and keep "playing it"), among other things. I'd go in more detail, but I'll have to come back to this.
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Paul Kelly Producer 10 years ago
I'll take this bet if you say "and is successful" I'm sure someone will try, but people should understand pricing revenues better.
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Martyn Brown Managing Director, Insight For Hire10 years ago
It was a very good presentation by Ben, he talked a lot of sense and relayed his experience to date. Pretty good summit too.
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Gregore Candalez Journalist and Account Manager, FD Com.10 years ago
I find it hard to believe in someone who predicts a "F2P Skyrim MMO" when he, himself, has worked only on a couple of browser-based Battlefield games. What other experiences does he have? Has he actually played F2P games? Is he really putting F2P MMOs in the same category as browser-based social games?

From the way he puts it, I can draw two conclusions. 1) He thinks just like Zynga, that we are simply money farms. 2) He isn't considering that, giving everything away with money (as he suggests) will methodically destroy the lifespan of the game (similar to what happens when you get Gamestop exclusives). The challenges we like are exploration, evolution and acquisition - of items, of equipment, of friends, of overall experience. If you sell everything - from weapons to faster leveling - what is left to play?

I, personally, think this man is talking bullshit. F2P isn't just a business model, it's a design decision. LOTRO, DDO, DCUO, Warhammer didn't go F2P because it's the model of the future, but because they couldn't compete with top MMOs on the market, such as WoW, Rift and now Star Wars.

And what does he think of the "Pay and Play" model, which is Guild Wars 2, which is a Triple A title, but with a 1.0 freemium model?

Edited 1 times. Last edit by Gregore Candalez on 29th March 2012 2:45pm

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Private Industry 10 years ago
Actually he predicts a F2P singleplayer game with the scope of Skyrim. That I find even less likely to make a great return in money with the development costs of games like that and it would need to have a brand.
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