Monday, February 12, 2007

The Free MMO Business Model, an Alternative to Pay-to-Play


Commercial MMO games all seem to have the same plan for earning money. These publishers rely on subscriptions from their players to pay for their upkeep and development. This is the tried and tested model, any many publishers are afraid of change. This model of operation however does not necessarily mean it is the best, or most profitable. This article will discuss some alternatives that could revolutionize how we play MMO games.

Free vs. Pay-to-Play:

How many times when bored and looking for a new game to play, do you look for free games? How many times have you wanted to play a new game that seemed cool, but couldn't justify the steep monthly payments? Many of the MMO games currently on the market are quite enticing, offering human interaction, cool features and multiplayer quests. Unfortunately the majority of these games all charge a significant monthly fee, generally averaging between 10 and 15 USD per month, on top of the cost of the game itself and expansions.

A lot of people I know, including myself would be much more inclined to try and play these games if the cost to play was much cheaper, or completely free. The free model allows a game to attract a much larger audience. How many of us thought about playing Blizzard's World of Warcraft but decided it wasn't worth the money? I know I did. If these publishers were to offer their games free of charge they could quite easily double or triple their player bases.

This theory expands even more so for the small time publishers, and indie game developers. A free game is more easily played by a new player. That new player is more likely to recommend it to his or her friends, and the trend continues. There is nothing better a new developer can do to expand their exposure then by offering their game for free to the world. Besides, there are plenty of ways to make money from a game without actually charging for it.

Alternative Income Sources:

A good collection of money making strategies can make a free game worth far more then the best pay-to-play game. After all, we can use this new found exposure and traffic to fuel our other income sources.

Advertising is one of the most popular money making strategies on the Internet to date. Very few websites don't capitalize on advertisements. Provide game features that require use of the website: account management, forums, and online item markets will drive your players back to your website on a regular basis. You can then quite easily convert this traffic back into income. Most players would be more then happy to deal with a few small ads then pay for a game. If complaints about the ads worry you then you can go even further and let them pay to opt out of the advertisements.

The website isn't the only way to optimize your profit. A lot of games have loading screens. Why not replace these loading screens with some sort of advertisement. Another approach: let companies sponsor individual zones, instances, and areas in the game. Then the load screen could display that information, this area brought to you by "You Company Here".

Another strategy MMOs has been used in movies for years, and even in some games already. If your MMO has a modern theme then product placement is a good way to let companies display their products in a less direct manner inside your game. A lot of contemporary commercial games are jumping on to this trend (think about in game billboards, or race car sponsors). Unfortunately many of these developers just pocket the extra income, and don't use it to subsidize their games.

People who play MMOs often state how addicted they are to the games they play. The next logical method to earn from an MMO would be official game merchandise. With such services as available, this isn't a hard task for even the smallest indie game developer. Of course this like the other features is dependant on the number of regular players you can maintain. Anything from soundtracks, to game posters (and game world maps in poster form), to the standard T-shirts and hats. Not to mention that this can even generate more new players if used correctly..

The merchandise method can also extend into your virtual world itself. This combined with what is generally referred to as pay-for-perks. Why not offer cool equipment to your players for real money. If they play enough then they're bound to want the best they can get. One of the keys with pay-for-perks, however, is to manage how these cash items affect the balance of gameplay, poor balance will result in less players. A good cash item might have the same stats as the highest tier of in game items, and just have a cooler more unique appearance. Another option might be customized items, tweaked to a character's play or visual style. Pay-for-perks has been used many times before for free games, but unfortunately it is often poorly implemented, either resulting in a lack of balance, or hurting player sentiments. I will discuss this in more detail in the next section.

Other good pay for perks items are things that may not actually effect gameplay. Like the previous example of just cooler looking 'stuff' for players, you could offer a private home, or custom avatars for players. Status symbols that won't impact which player has the advantage. I would even consider some sort of service to update a player of in game events, say via an instant messenger program, letting them jump in when a fun event is about to happen. These services give the player more enjoyment while not hurting the enjoyment of those who would rather play for free.


As mentioned before, pay-for-perks can unbalance a game. Some games for example let you purchase equipment far superior to the equipment players can acquire through in game means. This generally hurts other player's experiences, and in the long run will hurt the game's player base, the lifeblood of the free MMO. A safer version of this kind of pay-for-perk is to allow players to directly or indirectly purchase these items with in game money, or instead let players purchase game money using real money. This allows players with less time, and more pocket change play at the same level as those among us who avoid real human interaction as much as possible and haven't left our computer in days.

Another major issue with abandoning the pay-to-play model is the potential for over commercialization. In an attempt to keep ahead of costs a publisher could over do it and place too many ads, or try too hard to get referrals. The efforts to bring in a profit need to be balanced just as much as the character classes. If you try too hard you will loose players. If you don't try hard enough you loose potential profit.

One of the top customers for purchasing ad space on a game website is other game publishers. This can put a publisher relying on ads in a bind. If we need to rely on users visiting the advertised, then we are potentially handing over our audience to these advertisers. To avoid this, competing ads need to be limited. This means a focus on getting advertisers from outside of the industry will be important for survival of the game. Complementary products are also a good solution. Generally someone won't leave a MMO because they found out about a new gamer forum or chat site, especially if it is directly target towards players of that game. Make intelligent choices when taking on advertisers, and competition should be a minimal problem.

The last hurdle to overcome with this model (as with the pay-to-play) is the issue of critical mass. This is really a vicious cycle. In order to sell advertising space you need players. To get players you need servers. Servers cost money. Money comes from advertising. Advertising space must be sold, and is often hard to sell without players (and thus traffic). Rinse and repeat. Any way you slice it, some sort of start up capital will be helpful. A good plan to aquire players to begin with will be needed, and acted upon efficiently. Contrary to what you think, this situation can favor the free model. Players are more likely to try and keep playing a game they can play for free.


Whether publishing an indie game or a full on commercial release an online game can and probably should be offered for free. In fact most other games probably can work on a similar model, but either require more preparation of sponsors before release, or something else to keep the users coming to the site for information and updates. The key to remember here is that we are generating traffic, and entertaining an audience. This principle is used by network tv, radio, as well as many websites.

A good business plan and plan of attack are the most important tools for this model of operation. The hardest task for a game publisher in this case, especially the indie developer is to get the sponsorship. You must be able to sell yourself and your product to the right people to ensure that the project is profitable. I hope this model catches on, it really is the best for all three parties involved, the gamer, the developer, and the advertisers. I'll be waiting for your free game.


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