Monday, June 16, 2008

Free to play has revenue

Virtual World news reported the other week that even free to play online games tended to average positive revenues. On average, most tended to garner 1.40$ USD from each player. Certainly not the 10-15$ that pay to play commands, but revenue is revenue, and given that most free-to-play are much less cost involved, their profits may be as favorable or just slightly less than than some of the less successful pay-to-plays, and actual revenue estimates allow startups to budget accordingly, and expand if more successful.

But it also brings up a good point from an economic standpoint. There is a differentiation of consumers of MMOs in their preferred style of consumption. Those that prefer to pay upfront for an all-inclusive experience (Take going to Disney world and paying the park entry fee to go on all the rides, for example) versus those who would rather experience the content and pay for the extra if they invest into it (your local fair, where you buy tickets that are expended at each ride). The goal of free-to-play isn't just to attract players based on the low entry cost, but to snare revenue out of those that enjoy and invest time and value into the game.

If you can snare people into the game, such they have invested enough time to place value on their experiences, many will invest further to enchance thier experiences. (Some offer cosmetic changes, others offer unique content - Hattrick and Adventurequest are two variations I've personally experienced.). While Ad streams are a source to attach to the free player base, these mini-subscriptions tend to be where much of the rest of the revenue is captured.

And if its good enough, well presented and enough people become to place value in thier avatars and the world, the game may see revenues like second life, which had a reported average revenue of over 9$/user. Thats near pay-to-play, for a free, lower budgeted game.

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