Free to Play

Jonathan Goldsmith

It’s Christmas day and the games Santa just brought down the chimney are all demanding that I spend more money. They’re offering new characters, maps, and missions locked behind paywalls. I have great games to play but my millennial FOMO nags at me. As I reach for my wallet, I can’t help but ask myself: when did buying a game become just a cover charge for the club? 

In 2011, video game developer THQ released Homefront, a military style shooter aimed at being an edgy competitor to Activision’s Call of Duty. Prior to release, THQ conceded that their game wasn’t going to be a commercial or critical success. Despite the money invested in the game, the company felt that they couldn’t compete with the market leaders. THQ were looking to rescue their investment so they did what a lot of businesses do when they’re worried - pump up the marketing. 

Financially, though Homefront was considered a reasonable success (sales numbers exceeded 3 million which was enough to return investment) the brand was tainted. Three million gamers were sold a product that couldn’t live up to the hype. Consumers felt betrayed. Homefront was the Waterloo of games marketing and THQ never fully recovered, eventually closing down in 2013. 

Meanwhile, away from mainstream games coverage, a small team of developers were building a game that would lead to a new wave of game design and financing. In 2009, Riot Games released League of Legends free of charge. By 2011, it was acquired by Tencent Holdings for $231,465,000 USD. At the time largely unknown in the West, Tencent was a juggernaut in the Chinese market. They now own Epic Games, creators of the successful Gears of War and Infinity Blade franchises. 

The big question for analysts is why a Chinese company, one that up until this point had made money in social networks, invest heavily in a free-to-play game? By 2011, games like Homefront demonstrated that ballooning development costs could cripple traditional games publishers. Riot games had developed League of legends with a relatively small budget and managed to turn massive profits through a free to play model. In 2015, the estimated earnings of Riot and League of Legends was $1.6 billion USD. 

This new way of selling games has historically been dismissed by mainstream publishing companies. League of Legend’s model was simple: the game is free, but it doesn’t come with any characters. Every week a variety of characters are available to try for free. If gamers have a character they want to play at any time, they can unlock them with in-game credits earned by playing the game. Gamers are under no pressure to spend any money but can bypass earning the in game credits with real currency. 

This inspired the world’s biggest games publishers to adopt parts of the free to play model. In 2012, Ubisoft’s CEO talked about a push towards free to play games on PC. High profile games from other publishers include Plants vs. Zombies 2 (EA, 2013); Hearthstone: Heroes of Warcraft (Activision Blizzard, 2014) and Call of Online (a free to play repackaging of 2007’s Call of Duty Modern Warfare for the Chinese market).

These games continue to be successful despite their upfront price tag. So where did the free games go? And why aren’t there more free games now? Retail outlets, still quite a strong force in the games market, can’t sell free games. The compromise evolution seemed clear incorporate free to play transactions into full price games, without lowering their price. In 2013, Forza 5 used the League of Legends model . . . except the game was full priced ($60 USD/$100 AUD). Cars were unlocked using in game credit or could be purchased for real money (the argument being that busy gamers often wanted to speed up the unlock process). Publishers have not yet seen significant pushback –  games are selling better than ever with more ways for consumers to pay. Games like Dead Space 3 (EA, 2013) and Mass Effect 3 (EA, 2012) sold huge numbers and then skimmed gamers post release with free-to-play mechanics.

Some publishers missed the point. 

The promise of free to play games is that if you work hard, you can unlock everything without spending money. In November 2015, Star Wars Battlefront was released with a modest spread of multiplayer maps. Developers DICE, known for their Battlefield series, had promised to expand the game through downloadable content. The problem was that this was paid content. Not only was the consumer being hit for $100 AUD upfront to play Battlefront, but the rest of the game would be coming later on.

A far worse example is Rainbow Six Siege (Ubisoft, 2015). Like Forza 5, Rainbow Six requires players to unlock the content they wish to use. No characters are unlocked by default. Gamers are encouraged to 'grind' (repeatedly play) the single player content to unlock these characters. While the single player doubles as a tutorial for the online gameplay, it’s a system designed to have players spend money, Rainbow Six isn’t a full game but it’s priced like one.

Sadly, this won’t be the last game to double dip into gamers’ wallets. While not all games can be free, consumer pushback and poor critical reception has not yet had an effect on this trend. Making games is a business, we can only hope that publishers don’t follow the Free to Play Pied Piper the way they did with military shooters and Homefront half a decade ago. Ironically, a free game is still the most profitable in the world.

The Collective