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$60 game model is "going to have to change"

Nexon sees the traditional publishing model fading away as free-to-play rises

Game budgets continue to rise with each successive console generation, and with the Wii U launching later this year, the industry is on the cusp of yet another costly transition. Publishers started regularly charging $60 for games this generation, but that's a model that simply cannot survive, Nexon America CEO Daniel Kim told GamesIndustry International.

The executive is naturally biased towards the growing free-to-play model, which is Nexon's bread and butter, but he's also on to something. Gamers are more and more reluctant to spend $60 and publishers are terribly risk averse when it comes to spending anywhere from $40-$100 million on a project.

"I think at some point the console makers have to make a decision about how closed or open they're going to be to the different models that are going to be emerging," Kim remarked to us in an exclusive interview. "Today it's free-to-play, and I'm convinced that that one is going to continue to flourish and expand into other genres and other categories, but there may be something else completely and entirely different that comes out that again changes the industry."

He cautioned, "If your mind is just set on keeping the current model of buy a game for $60, play for 40 hours, buy another game for $60, play for 40 hours, that model I think is eventually going to change. It's going to have to change. How they will adapt I really don't know, but I hope that they're aware enough to understand that the value proposition of free-to-play is not going to go away."

As Kim alluded to, the console makers - especially Microsoft - have made it a bit difficult to try out new business models. "Dungeon Fighter is being released as a Microsoft Xbox Live Arcade version of the game. But again we had to modify the game and the business model to fit their restrictions or requirements. It's not free-to-play, it's DLC essentially," he said. "Which is not really truly how we like to service our games, we like to service our games completely free-to-play, no limits, and earn the players' business by convincing them there's value in purchasing stuff."

Sony, on the other hand, is at least providing the ability to launch free-to-play content on PSN. Kim noted that seeing CCP's Dust 514 first-person shooter coming to PS3 as a free-to-play game is "encouraging."

All three console manufacturers definitely have plenty to think about as they prepare for next-gen. Those who are unwilling to try new business models may become the dinosaurs of a forgotten age of gaming.

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James Brightman

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James Brightman has been covering the games industry since 2003 and has been an avid gamer since the days of Atari and Intellivision. He was previously EIC and co-founder of IndustryGamers and spent several years leading GameDaily Biz at AOL prior to that.

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