Meretzky: There's a "psychological break" around F2P

What's good and bad about the maturation of the F2P sector

Free-to-play (F2P) is coming into its own. Indeed, some proponents of F2P believe in a few more years that revenues generated from the business model will actually surpass that of other more traditional models in the games industry. Veteran developer Steve Meretzky (now with GSN Games) discussed the evolving F2P market at GDC recently and he spoke with GamesIndustry International about his observations.

"The F2P industry is really maturing. It's pretty young - obviously in Asia it's a little older - but in the North American market it's only a business model that we've seen in mass market games for six or seven years, and yet it's already reaching a point of relative maturity. We're seeing the same sort of characteristics in F2P that we've seen in other business models after they enter a period of maturity: rising production values, rising costs, a sort of increasing conservatism by management and other financial stakeholders, and finally a kind of dampening of innovation. So you see fewer new genres, smaller change over time within established genres and fewer new entrants coming into the space," he noted.

While many developers and publishers have doubled down on the genres and play mechanics that have proven successful in F2P, players unfortunately will see little in the way of innovation. Meretzky looked at the top 25 lists on the four major F2P platforms - Facebook, iPhone, iPad and Android - and he saw only four out of those 100 slots occupied by games that didn't fit into one of four categories: social casino, invest and express, midcore, or a saga game.

"I think there are dark clouds in terms of that limiting of innovation, and I think that's likely to continue"

"Looking at it from a player point of view, I think there are dark clouds in terms of that limiting of innovation, and I think that's likely to continue... there's [still] probably going to be more chance of innovation or chance of a disruptive new entrant, but it's lower than it was a year or two ago and in another year or two it will probably be lower still," Meretzky cautioned.

It's not as if the console industry is faring much better when it comes to innovating with new genres, Meretzky said: "If you look at consoles, the diversity of genres has gotten worse over the last 20 years. At least the cost of entry on the mobile market is still fairly low, particularly on Android. Discovery of course is a problem, but I think there's at least the hope that there are enough little indies and garage companies and stuff out there feeding interesting things into the mobile ecosystem that every now and then one will bubble up and become something very different and then itself become the source of the next round of cloning."

Speaking of cloning, Meretzky said that we're beginning to see a reduction of the cloning problem in F2P, one of the positive aspects of the market's maturation. Meretzky reiterated a point that Gamehound's Dave Rohrl made during GDC: essentially, clones are failing because "they're not at all attempting to differentiate or innovate or advance the art at all."

Indeed, Meretzky pointed to cloning as one of the biggest mistakes that developers make in F2P, and that was particularly true a few years ago. "I'd certainly point to that as one mistake that people often make in F2P, especially in the early days when development costs were so low and development time was short; cloning was so rampant and when there were so many companies that didn't have a lot of experienced game development and design staff and they were really just relying on basically looking at other games' blueprints and copying them without understanding what made them tick. I feel like in general the industry has gotten better and that something like cloning of Clash of Clans is, while still prevalent, not as prevalent as it was four or five years ago," he said.

As F2P has become more widely used across platforms, some in the traditional games space have voiced concern or even resentment. Meretzky said he just doesn't understand the accusations of F2P being "evil," whether that opinion comes from developers or gamers.

"It's always struck me as a little odd how resentful players are in the F2P business model...when they don't think twice about paying $50... There's such a psychological break there"

"It's always struck me as a little odd how resentful players are in the F2P business model about paying a couple dollars when they don't think twice about paying $50 for the same amount of fun or the same amount of gameplay time or whatever. There's such a psychological break there," he remarked.

As for developers, Meretzky feels that some have made the perception about F2P worse because they've been going about creating games the wrong way. That is, they've been looking to give "whales" a reason to pay even more.

"I think that in general across the entire F2P industry the companies have been much too focused on tuning their experiences for the big payers," he said. "I always thought five or six years ago when F2P started taking off - and we were seeing the one to two percent conversion for payers - I thought 'well it's all so new and they are just being exposed to this idea of paying for virtual goods or payment as an optional way of participating more deeply in a game.' And as people become more familiar with it and more cozy with the idea of paying for their entertainment that way that percentage of payers would gradually rise. We haven't see that at all. I think perhaps one reason for that is that game designs had been tuned not to make it more likely that a player would turn into a payer but designed much more with a focus on turning a payer into a big payer."

So how can developers succeed in the F2P space? Well, for starters, a game has to be fun. The days of pure metrics-based design are over.

"There was obviously a lot written about companies [in the early days] and Zynga being the main poster child that you could basically A/B test your way to a good game. I feel like that whole philosophy has been pretty discredited and I think it's now accepted that task one is producing a fun game and then task two after that is A/B testing it into perfection, but you can't start with A/B testing," Meretzky warned.

He also believes that the "fast follow" strategy is not a bad approach. As long as you're not outright cloning another game, if you look to some of the top performing titles you could gain some inspiration.

"Doing something similar and finding a few key areas to innovate on and differentiate yourself, I think that's actually a pretty good place to be, especially if you're a developer or publisher with a fairly small portfolio and you don't really have the luxury of spreading your bets from very cloney to very innovative," he advised. "I think the sweet spot is to take a successful game or successful genre and not completely clone, which I think is a pit of death, and not innovate too much."

Latest comments (15)

Samuel Verner Game Designer 5 years ago
"It's always struck me as a little odd how resentful players are in the F2P business model about paying a couple dollars when they don't think twice about paying $50 for the same amount of fun or the same amount of gameplay time or whatever. There's such a psychological break there," he remarked.
because you cannot have the same fun for 50 dollar in a f2p game. the same amount of fun (=same kind of round game experience) usually costs 500-5000 dollar in f2p games and these games have a less good quality in compare to AAA games.

Edited 2 times. Last edit by Samuel Verner on 31st March 2014 11:04pm

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I don't see the psychological break. We've been conditioned by marketers that lump sum payments are more sensible, that you should pay a flatrate for your internet rather than paying a small sum for each megabyte. Nobody likes getting nickeled and dimed.

Edited 1 times. Last edit by Felix Leyendecker on 31st March 2014 10:06am

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Neil Young Programmer, Rebellion Developments5 years ago
The bit about balancing for big payers is spot on - so many games offer no attractive option for a small contribution - similar to what you would have paid if the title was launched as premium rather than f2p. I'm sure there's a load of data that shows that only selling gem packs maximises the amount payers pay, but it must shut out a vast number of potential small payers.

Personally, I never buy in game currency for "casual" f2p titles; I've only paid for tangible upgrades (extra content, or permanent boosts). In game currency offers no value to a casual player wanting to make a small one off payment.
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for a fistful of dollars, you get unfettered access to a game experience, for a fistfull of prayerbeads , you get a fragmented bombshell of hidden caltrops. the choice is simple Free or Paid, but never really Free to Play
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Eyal Teler Programmer 5 years ago
I've played enough F2P games to know that you can certain get a lot of enjoyable play time without spending a dime. Sure, that's not always the case, but just because some developers abuse the model doesn't mean that the model is fundamentally broken. I'll take for example Everquest 2. I enjoyed it more and paid less when it turned F2P in 2010 than when I paid a sub in 2005/6. If I started playing now I might not have payed a thing though because most of what I paid for became free with time.

Conversely there were some $50 titles I didn't get much enjoyment from, certainly not something I'd consider worth $50.

Anyway, I certainly agree that developers need to find way to entice me to pay more, but damned if I know exactly how. EQ2 got me by making an interesting game and selling me extra bag space, character slots, classes and races (all of which except character slots are free now). Then again I already had some sympathy for the game (even though I quit in 2006 because I felt it was boring), which probably affected my willingness to shell some money on the game. DCUO got some of my Station Cash because it sold expansions for cheap. Consumables? That's not something I'd pay for.

Edit: On second thought, I did buy a couple of items in EQ2, which I consider semi-consumable (since they're attached to a specific character), but they were cheap and funny. So I guess there are some ways to get me to pay.

Edited 1 times. Last edit by Eyal Teler on 31st March 2014 2:52pm

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when they don't think twice about paying $50 for the same amount of fun or the same amount of gameplay time or whateve
I dont agree with this at all. Gamers/customers are being conditioned to think games shouldnt cost any where near that anymore. I dont think for a minute gamers dont think twice and/or question 50 dollars price tag for a game now.. and thats the problem. 15 years ago, people wouldnt question a 50 dollar price for a game, thats what games cost, now, that 50 dollar price is being met with " woah.. 50 bucks for a game, thats a lil crazy" attitude.

We have conditioned the consumer base to think that gaming should cost very little if anything, and that is a HUGE problem going forward.

Now if you want to talk about a psychological break, the break comes with regards to other consumables. 4 bucks for a mobile game is considered kinda much, 4 bucks for a coffee. not so much. Now there is the break your looking for. The " I'll pay 1.50 for a candy bar but not 1.50 for a game" ..

Edited 2 times. Last edit by Todd Weidner on 31st March 2014 4:30pm

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Neil Young Programmer, Rebellion Developments5 years ago
We have conditioned the consumer base to think that gaming should cost very little if anything, and that is a HUGE problem going forward.
This gets cited a lot, but is there any evidence it's happening on a non trivial scale? Also, does the effect extend beyond mobile?
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Klaus Preisinger Freelance Writing 5 years ago
f2p, a business model designed to hide true costs behind layers upon layers of misdirection, is the ultimate recreational poetic justice made for a populace of fools, who, for the sake of having fake feelings of ownership, mortgaged away the next 10 years of income to an army of realtors and car salesmen.

I have no doubt that 1.000.000 years from now, space aliens will find this planet to be filled with robots caring for humans who have developed back into apes from wearing VR headsets their entire life. From the matching blue logo on everybody's VR headset, the aliens will naturally deduct to be too primitive to understand this advanced race of chimps, who has no doubt some sort of collective consciousness too complicated for the aliens to perceive, or communicate with. The robots are too smart to clue them in on the horrible truth and sent the aliens on their way with Earth's gift of f2p.
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Spencer Franklin Concept Artist 5 years ago
@Neil young

My thoughts also... I don't balk at 50-60 dollars for a new game, that's just the going price that I've paid for years. It only comes into question when there are multiple titles I may want, but obviously only one or two are going to get my money now (the other(s) will be GOTY editions later. My kids, who do earn their own money for games, don't think twice about spending that amount for a new game either (much less balk at a mobile game costing a couple bucks)... We all though, think quite hard before investing in anything that says F2P... simple fact is, we have yet to see an FTP game, mobile or otherwise, that allowed you to earn everything that launches with the game for LESS than the cost of a full priced game... it seems to always costs quite a bit more to enjoy it all.

I know people can play without ever spending a dime, but not unless you are willing to deal with the mechanics that make it an intentional grind, or are willing to only enjoy the "base" free game. When I see in game purchases for any currency that exceeds the cost of a full price AAA game, I know that's a game I will steer clear of...especially if it's a mobile game. There must be a reason why they would prefer to NOT offer a one time purchase price along with an FTP offering. Obviously, because they can make more money nickel and diming folks than they can get from people who would outright purchase the game.

So the only conditioning my household is getting, is that if your game is F2P, then it's not worth the cost of a full price game... so why would we opt to pay MORE for the "Full" experience via F2P?
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F2P ultimately are like the hidden calories of modern popular over sugared drinks. The ULTIMATE and true costs of the lifetime of the product is often more than a traditional $50-60 full access game experience
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Neil Young Programmer, Rebellion Developments5 years ago
The ULTIMATE and true costs of the lifetime of the product is often more than a traditional $50-60 full access game experience
That depends on what you mean by "ultimate and true costs". Yes, the cost to access everything in game, especially without countdown timers, may be very high - but that isn't always relevant. If the player can reasonably get all the content they want for free, then the game is reasonable in claiming to be free to play.
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Christopher Bowen Editor in Chief, Gaming Bus5 years ago
Whenever I read crap like this, I feel like I'm being spun to. I don't like being spun to, and especially resent it when it comes to a financial model that has been so detrimental to so many people who don't make money off of it.

We're conditioned to spend that $50 because we know, at $50, what we're getting. It can be argued that we're getting less for that $50 than we used to - mainly because companies like EA are stuffing freemium-like models (Ultimate Team) behind premium titles - but we still have an expectation that once we spend that $50, we don't have to purchase anything else and still enjoy a full game. With F2P, I go in, knowing, that companies who employ more psychological experts than coding experts are trying to manipulate me into spending money that will only create a compulsion loop forcing me to spend more money to justify the other money I spent. I got more out of my $50 game than a whale got - tangibly - out of spending $300 in consumables.

Maybe now you get it? No, I think you got it before. But you have a financial interest in spinning F2P into something it's not, to justify that kind of behaviour.
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Steve has a point there. However metrics based design just happened because it's available in real time. If done right, and if your company chart and staff are geared towards better service, there is no problems in having a virtuous circle where metrics feeds design feeding the right , fun and innovative content. The main problem with F2P is fixed KPI, cost of service and non paying users monetization. Yes you read it right, who can be happy by having just 3% paying users ? It's time to work on engagement, retention and loyalty. I believe players spending $25000 a year on your MMO deserve better service, better feedback, better customer support. Time to look at the gambling industry to learn the best practices.
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Why do certain IPs become popular that they create a legend, myth and culture around .Jedi junkies or spawn legions of Fandom eg. Attack on Titan - its certainly the opportunity to get engaged, immersed and making a DANG GOOD JOB of the relevant universe its engaged in.

Free 2 Pay has really one real goal. Pay, pay more, pay alot....entertainment and a darn good yarn got tossed under the money behemoth somewhere along the way. At least with the traditional conditioning, you go in with your eyes open ding into the reviews, the culture, and the game build up hype prior to launch...and you anticipated and saved for something that was going to be something you wanted to invest you time in (sometimes people wanted ot even throw MORE money into it...)

very different motivation when you try to sell a F2P model to the gamers
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Patrick Williams Medicine and Research 5 years ago
The psychological disconnect is not odd at all. There are perfectly good explanations for what alienates people to the F2P model: firstly there is there cultural / identity issue, a very visceral us vs them of the core crowd vs casual crowd that dates back about a decade. Secondly, the nature of F2P can feel like either pay to win or create arbitrary obstacles to nickel and dime the players (ex: dungeon keeper). For people not accustomed to games they don't have the same relationship with their game that someone with more gaming experience would, where the latter will be alienated by a mechanic to advance in the game that is unrelated to the their ability and understanding of the game's design.
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