The Business and Design of Free-To-Play Games


Quick Housekeeping: GDC, SXSW, Etc

I've been a bit remiss in putting general news stuff out there, so let me catch up in a quick and timely manner:

1) I'll be at GDC next week, Sunday the 17th to Friday the 22nd. I'm giving a talk called "The Power of Free-To-Play" (GDC chose the Anthony Robbins-esque title) at the Worlds in Motion Summit on Monday at 2pm. I'm up for coffee with any interested parties, so email me if you're one of them.

2) I'll be at SXSW in Austin, March 8-11. Michael Smith (CEO of Mind Candy) was kind enough to invite me to be on a panel called Casual Multi-Player Online Games: Serious Revenues, along with Nabeel Hyatt (Conduit Labs), Jeremy Liew (Lightspeed Venture Partners) and Joe Hyrkin (Gaia Online).

3) Lastly, I left Relic in early January after three great years with the company. Since then, I've been doing some design & production work on a variety of exciting free to play projects. So for the time being, you could call me a hired gun.

I hope to see some familiar faces at GDC and SXSW. Take care!

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Dallas Snell Talks Dungeon Runners, Free to Play and NCsoft 2.0

NCSoft the MMO giant has credits that include the massively popular Lineage, Lineage II, Guild Wars, City of Villains/Heroes and the upcoming Tabula Rasa. But Dungeon Runners, one of only two free-to-play games from NCsoft, is unlike most of their other products. DR is based on a tiered subscription model, where users can play for free, or opt to pay a monthly subscription ($4.95) to access upper level content.

Free To Play spent an hour with Dallas Snell, NCsoft's Director of Business Development, discussing Dungeon Runners, the free to play model and the future of NCsoft. Dallas has been a prominent figure in the games industry since 1983 having to contributed to over 20 titles during his time at Origin and EA. After a short sabbatical from gaming, Dallas returned to the industry in his current role based in Austin, Texas.

The earliest version of Dungeon Runners began as a different project entirely back in 2001, before being put on the back burner, where it remained until 2002 when it was dusted off to be a game titled Exarch. That too was eventually put to rest until Dungeon Runners was resurrected in its current incarnation about 18 months ago. Today the team consists of over a dozen internal employees with a heavy contingent of art outsourcing.

The decision to resurrect Dungeon Runners and make it a free to play game (versus a full retail MMO) came from NCsoft CEO Robert Garriott and Chris Chung, the former ArenaNet General Manager, who operated out of Korea at the time and therefore had early exposure to the free to play model. Chris is back in Austin now and looking to push NCSoft further into casual MMO development, replicating the success of Korean companies like Nexon.

There's been speculation that NCsoft chose subscriptions as the primary revenue model in Dungeon Runners due to a belief that North American players preferred that model to microtransactions. However, that was not the rationale for the subscription decision. Instead, Dungeon Runners' optional subscription fee was chosen simply because a microtransactional model wasn’t yet set up in the Dungeon Runners code base. To remedy that, the team is currently working on getting microtransactions running within Dungeon Runners before the game is launched in Korea.

Dallas made frequent mention of NCSoft's embrace of "Web 2.0" development philosophies. In particular, NCsoft's use of the free to play model, Dungeon Runners as a testing ground for future products and the company's strong commitment to reducing barriers to entry for all NCsoft products were all offered as proof of the company's Web 2.0-ness.

Dallas often referred to Dungeon Runners as an experiment, saying that although Dungeon Runners currently utilizes subscriptions, within a couple of months in-game advertising will become a part of DR. In fact, the ads are already in the world, but visible only to testers, NCsoft and Double Fusion (the in-game ad provider). was asked not to reveal how the ads will be implemented, but expect an announcement from NCsoft soon. If all goes well with the ad experiment, Dallas says NCSoft will consider the possibility of scrapping Dungeon Runners' subscription fee all together.

On the other hand, by their own account NCSoft is seeing higher than normal conversion rates with their current subscription set up, so perhaps Dallas won't be so quick to abandon it.

What are those great numbers?

Among active users (online within the last month), Dungeon Runners has a high free:paid ratio - i.e. there's a larger proportion of paid to free users than among most f2p games. Dallas cites Runescape with a 5:1 ratio (free to paid, online at any given time), and says that DR is hitting 3:1, or after content updates, as high as 2:1.

Additionally, NCsoft expected a monetization rate of 1-3%, but their numbers are reportedly "significantly higher" [Dallas declined to give a specific number]. Dallas claimed not to know the cause of the higher monetization rate, but one contributing factor may be that the large majority of in-game activities or items are available only to paid users. Dallas acknowledged this and went on to say that the dev team is strongly considering raising the ceiling for free users as currently only 1-2 hours of free play will result in players hitting the ceiling with respect to what they can get for free.

Further to NCSoft's recently announced plans to release free to play content on the Sony network, Dallas talked about his company's goal of becoming "device agnostic" in order to break down the segregation of gamers between platforms. NCsoft plans to build their own cross-platform community service, with friends lists, inter-game messaging, and other features similar to Xbox Live. NCsoft also intends to release desktop, facebook and mobile widgets to extend gamers' experience.

According to Dallas, NCSoft thinks of Dungeon Runners as a "MMO light" or a game that straddles the gap between casual and core gamers. In Dallas' opinion, the success of products like Runescape makes it likely NCSoft will develop even more accessible games - perhaps even browser-based - to further minimize the barriers to entry.

With 40+ data probes plugged into Dungeon Runners, NCsoft approaches the product as a testing ground for ideas to be built into other games. The probes measure everything from time played, rewards frequency, item usage, leveling curves and dozens of other useful metrics. Outside of the game, account-level metrics are tracked in a publisher module that will allow NCsoft to track and analyze a single player's activities across all their products.

In Dallas' eyes, retail may soon become "extinct" with digitally delivered gaming ruling the day. He spoke candidly about the struggles facing music and film and how games are uniquely structured to develop their own delivery solutions. To that end, products like Guild Wars and Dungeon Runners are blazing trails for NCsoft.

Finally, as already mentioned, a recurring theme from Dallas was his commitment to lowering the barrier to entry in all NCsoft products. As evidenced by their free to play experiment, NCSoft strategy is to grow their customer base as widely as possible, then monetize the largest possible proportion. Most flatteringly, Dallas said his officemates all had printouts of F2P's article, Top 10 Ways to Reduce Barriers to Entry, and were treating it as a white paper of sorts.

Thanks to Dallas Snell for his time and to Opal Lertutai, NCsoft PR, for setting us up.

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Kwari: Pay-to-Play Repulsion Loop and Online Gambling

Apologies for the lack of updates lately. Kid #2 is mere days away and we're moving house in a week. Very busy.

I was catching up on my feeds today and decided to buckle down and plow through this interview with Kwari's Marketing Director. I don't even know where to begin with Kwari. It's certainly not "Free to Play" as you can't so much as fire off a round without first purchasing ammo.

Worse yet, every time you absorb a shot, money is deducted from your account. So when you start the game with nothing but an unloaded gun, you'll quickly soak up enough bullets to deplete your account by several bucks. At this point you can choose to either stop playing altogether (to save money) or purchase ammo and health in order to stem the tide of cash flowing off your credit card. This is not a compulsion loop, it's a repulsion loop.

One of the more interesting aspects of this game is how it will avoid being classed as a game of chance (i.e. gambling) and legislated out of existence. Cue giant speech about why they're a skill-based game:

Al King: It’s absolutely about player skill, and that’s a very important point for us in many ways. With all the changes in legislation as far as poker-related websites are concerned, it was very important to us that we got rid of any elements of chance or randomness and make it a skill-based game. We’ve already been classified as… well, we haven’t been classified as a skill-based activity because there is no such category in the UK where VAT (Value Added Tax, a form of tax applied to all purchased goods levied by most or all European governments) but we haven’t been classified as ‘gambling’ which does have it’s own form of status over there, and that’s a big achievement for us. We’ve also been classified by the banks for credit card use as ‘non-gambling’, so we’re fine in the UK and in the key European territories. When it comes to the USA we basically have to take our case on a state-by-state basis and say ‘Here’s what we are, here’s what we do, we’re being gracious, transparent and responsible about the whole thing.’ Fundamentally we are skill-based, we’re not gambling, but we are subject to the same laws that cover gambling, and so we just need to be patient about the speed we can roll out in North America, but we’re hopeful that we can get running in some key states in the first half of ‘08.

Ironically, after all that, a few paragraphs down Mr. King discusses one of Kwari's unique features - something called a "Cash Bomb":

Al King: There’s also another feature - which we know we won’t have ready for launch, but we want to implement it asap - called the ‘Cash Bomb’. It might look a bit like the Pill, we’re not sure yet, but we do know that it will hang around in the game world and maybe move around like a little sentient robot and players will shoot it. The reason why is that after a number of shots, it will explode and all the cash in it will go to the player who scored the shot - it might be $10, $100, or $1000, maybe more. The cash bomb will be completely funded by the shots the players fire into it. So you might be running around the map looking for someone to shoot, and you run across the Bomb, and you reckon ‘It’s only going to cost me a few cents’, so you fire a few rounds into it. And most of the time, nothing will happen, but every now and again someone will get lucky and the bomb will explode, and whoever got it will see coins and bills all floating towards them and their in-game account will go up by a nice chunk.

Hate to nitpick here, but that sounds exactly like a slot machine to me. Not much skill involved in running by, randomly shooting (aka inserting quarters) and hoping the bomb explodes and showers you with cash.

It will be interesting to see where Kwari winds up as a lot of what they're doing appears antithetical to free to play or even game design principles in general.

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