FreeToPlay.biz The Business and Design of Free-To-Play Games

28Nov/071

F2P Harbinger: FREE is the next Long Tail

Back in May, Chris Anderson, WIRED editor-in-chief and author of 2006's much-buzzed-about "The Long Tail," announced his next book. Due out in 2008, the book will be titled "FREE" with any one of the following subtitles:

1) FREE: The story of a radical price (zero)

2) FREE: How $0.00 changed the world

3) FREE: How companies get rich by charging nothing

4) FREE: The economics of abundance and the marketplace without money

5) FREE: The past and future of a radical price.

Having read Chris's original Long Tail article in WIRED and being subjected to endless recitations from his book over the last year, I'll wager a guess that "FREE" will be equally influential. Chris is writing "FREE" not only about games, but from a pan-industry perspective - which means by this time next year boardrooms the world over will be dreaming about how they might make more money by giving away their product free of charge.

Since October, Chris has started using a "free" tag in his blog posts, which gives us a glimpse into the type of content that might be included in the book. It's worth checking out.

On a related note, I found an interesting post entitled "There's No Money in The Long Tail of the Blogosphere" over on Read/Write Web today. It makes the excellent point that the long tail benefits the aggregators of long tail products much more than it does the makers of said products. Although the "products" discussed in the article are blogs and their associated authors, you can see the parallels for games.

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25Nov/070

Top 10 Conferences for Free To Play Followers

I spent a couple hours today pretending I had infinite time and money to attend free to play-relevant conferences the world over. The result is this list of the top 10 conferences for those who want a crash course on F2P development and a slew of contacts in the sector.

Over the last year, there's been a deluge of new virtual worlds conferences, but not all are created equal. So in addition to sorting on quality, I decided to sort for those that were at least partially geared toward English speakers.

Some of the following conferences occurred in the past, but have been included in the hopes that they become annual affairs.

1) Virtual Goods Summit
June 22, 2007 - Palo Alto, California

The Virtual Goods Summit is a one day conference focused on the emerging market opportunity for virtual goods and economies. Once restricted to the world of online gaming, virtual goods and currencies are beginning to influence the development of social networks, community sites, and many other new and exciting markets.

The Virtual Goods Summit was a one day affair at the Annenberg Auditorium featuring a series of one hour panel discussions and presentations. Notable speakers included the CEO's of Gaia Online, Three Rings, Kongregate, GoPets and K2 as well as the Director of Business Development at Nexon. The topics discussed included virtual goods as the next big business model, industry success stories and the forces driving user adoption.

Check out F2P.biz's summary of the Virtual Goods Summit.

2) Virtual Worlds Forum
October 23 - 27, 2007 - London, England

Our pan-European virtual worlds confex connected brands, major corporations, digital and virtual worlds agencies, media and entertainment players and games companies, technology suppliers, analysts and commentators, lawyers, regulators and venture capitalists and all those harnessing the power of virtual worlds to engage with clients, suppliers or customers.

The Virtual Worlds Forum lasted two days and was by no means focused just on games. The keynotes and panel discussions we're about many things including brand recognition, corporate opportunity and revenue possibilities. Panelists included Paul Hemp- Senior Editor, Harvard Business Review; Ginsu Yoon- SVP International, Linden Lab and Thomas Bidaux- Director of Product Development, NCSoft Europe.

Check out Wonderland's summary of the Virtual Worlds Forum.

3) Virtual Worlds Conference
April 3-4 2008 - New York; Autumn 2008 - West Coast

Virtual Worlds Conference and Expo helps businesses harness the power of virtual worlds to engage with their customers, partners and employees. The event follows our sold out Virtual Worlds Spring New York conference.

Speakers from this year's conference included Paul Yanover, VP and Managing Director at Disney and Anthony Zuicker- creator of CSI. The event featured hundreds of speakers overall and some major corporate support. This year six streams will be available with an emphasis on the financial and operational aspects of virtual worlds. Where as some of the conferences on this list are art or design orientated the Virtual World Conference seems to be strait business.

4) Game Developers Conference
February 18 - 22 2008 - San Fransisco, California

If you are going to attend one industry event in 2008, this is the one. The core objective of this year's conference is to promote Learning, Networking, and Inspiration. The GDC team has been working hard to create the most exciting and compelling conference yet. Most notably, we have adjusted the timing for the call for papers forward to ensure that we're presenting you with the most up-to-date topics facing game developers today. You won't be disappointed.

The GDC isn't exclusively interesting to free to play followers but in the wake of E3's fall from grace this is the game industry's flagship event.

Also at GDC is the Worlds in Motion Summit debuting this year, an event focused on virtual worlds. FreeToPlay.biz was asked to speak at the Worlds in Motion Summit and as a result, Adrian Crook will be presenting a primer on the F2P revenue model at the event. Also giving talks are Raph Koster, Nabeel Hyatt, Eric Bethke, Min Kim, Chris Romero and others - making this a great conference for the F2P sector.

5) Indie MMO Game Developers Conference
March 29 - 30, 2008 - Minniapolis, Minnesota

IMGDC is a venue for Independent designers and developers to come together to share ideas and learn in all areas related to MMOGs. IMGDC 2.0 has positioned itself to be an even larger venue with three fantastic tracks covering design, development and business aspects of Indie MMOGs. The present is a time of MMOG giants, but the future lies in the hands of the passionate Indie developers. Do you have the passion?

2008 will be the second year for the IMGDC featuring presentations from Richard Bartle author of Designing Virtual Worlds, Raph Koster and Gordon Walton who was previously VP/Exec Producer at Sony Online Entertainment, Maxis, Origin Systems and Kesmai Corporation.

Check out Gamasutra's summary of the Indie MMO Conference.

6) South by South West Interactive
March 7-11 2008 - Austin, Texas

The SXSW Interactive Festival features five days of exciting panel content and amazing parties. Attracting digital creatives as well as visionary technology entrepreneurs, the event celebrates the best minds and the brightest personalities of emerging technology. Whether you are a hard-core geek, a dedicated content creator, a new media entrepreneur, or just someone who likes being around an extremely creative community, SXSW Interactive is for you!

Though SXSW doesn't provide a ton of events catering specifically to the free to play crowd, it is a phenomenal collection of creative people working in emergent digital entertainment fields. Couple this with the fact that the event is part of North America's largest music festival and party and attendance seems like more than a good idea.

Check out Throwspace's summary of SXSW.

7) Austin Game Developers Conference
September 5-7 2007 - Austin, Texas

The Austin Game Developers Conference attracts over 1,100 attendees and provides educational, networking, and business opportunities for game development professionals driving the $11 billion videogame industry. It is the a global forum where programmers, artists, producers, game designers, audio professionals and others involved in the development of interactive games gather to exchange ideas, network, and shape the future of the industry.

Austin GDC has become synonymous with MMO design due primarily to the city's deep MMO development scene. The conference features talks and panels focused on free to play, "Web 2.o," MMO development and micro-transactional revenue models.

8 ) Online Game Developers Conference
May 13 -15 2008 - Seattle, Washington

Building on the great success of the 2007 conference, OGDC 2008 will expand the plenary sessions from two to three days, and feature a wide range of keynotes, sessions, and panels, giving attendees new views of the online game universe—everything from an overview of the latest business, product, and legal developments to in-depth looks at scalability, player psychology, and in-game economic systems.

This event features Erik Bethke, founder and CEO of GoPets; Alan Crosby director of global community relations at Sony Online and Steve Goldstein of Flagships Studios. 2007's OGDC was a good start - hopefully 2008 is a big step forward.

Check out MMORPG's summary of the OGDC.

9) Gartner Symposium ITxpo 2008
April 6-10 2008 - Las Vegas

Each year, Symposium/ITxpo: Emerging Trends is founded on a framework of six megatrends that Gartner sees as critical to how business and technology will evolve in the near and long term.

A mere sampling of the trends and technologies we’ll focus on includes:

  • User Generated Content
  • Social Networking
  • Community Source
  • The Metaverse
  • Relationship Assets
  • Hyperconnected Enterprise
  • Collective Intelligence

Gartner attracts a different crowd from the game-centric conferences listed here. Typically, Gartner attendees come from the IT or VC worlds. The value of Gartner attendance lies not in the curriculum, but in your fellow attendees.

10) DigiWorld Summit
November 14-15 2007 - Montpellier, France

The 6th Video Game seminar as part of IDATE’s DigiWorld Summit 2007, is organised with financial support from the City of Montpellier. A host of opportunities have opened up over the past two years: the development of serious games, Massively Multiplayer Games and persistent universes, online capabilities incorporated as standard features in home consoles, the emergence and growth of mobile gaming, the development of online poker that's been as swift as it has been surprising... All constituting innovative technologies and ways to play which, in this era of growing convergence, involve or induce an overhaul of business models.

I'm sure I missed some relevant conferences, so if you can think of any leave a comment for our other readers.

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28Oct/071

Food Fight Facebook App To Gross Over $6 Million

Game developers the world over continue to explore the free to play model, whether it's a large-scale MMO or an ad-supported casual game. But one of the more interesting free to play experiments of late comes from Facebook application developer David Gentzel, a 24 year old originally from Roanoke, VA. Mr. Gentzel now calls San Francisco home where he is a developer at SocialMedia, marketing guru Seth Goldstein's rapidly growing "Social Advertising Network."

David's free to play experiment is the incredibly popular Food Fight application.food-fight1.gif

When the game first launched on Facebook, Food Fight players could sign up to receive a daily allowance of virtual cash that could be spent at the Food Fight cafeteria to purchase one of dozens of available food items. Players would then virtually "throw" said item at one of their Facebook friends. If the recipient had the food fight application, a small image of the item would appear on their page.

But recently, Food Fight's the resourcing model changed, which is when it became interesting from the perspective of free to play revenue models.

As of mid-September of this year, a player's lunch money account isn't cleared at the end of every day - it's persistent - like a real bank account. Additionally, the daily stipend given to each player was removed, replaced by a model where players earn virtual cash by answering short marketing surveys about a wide range of products. Each multiple choice question takes just a couple seconds to fill out with a reward of one dollar of lunch money per question answered. Interestingly, players earn a higher payout when they answer the same question the same way down the road, an attempt to value accurate answers more highly than one-offs.

food-fight1.jpg

Marketers pay for player responses to their surveys, creating a nifty free to play revenue stream and making Food Fight the definitive social networking application for SocialMedia. Seth Goldstein is understandably thrilled about the "craplet" (his words), saying in a recent Business 2.0 article:

People really like to throw piles of poop... So you price the poop high and people have to answer a bunch of questions to pay for it. That's the future of Internet advertising: throwing shit at people. Literally.

That is it. No scoring, no winners, and no end. Nonetheless, a very successful idea.

How successful?

It takes a bit of conjecture to figure out, but here's our back-of-the-napkin revenue estimate:

  • There are 36,257 active daily Food Fight users (among 2M registered FF players)
  • Assuming each daily user answered just two surveys (reality is likely higher, as the lowest priced item is $2 - requiring two surveys to be completed)
  • Assuming each survey response cost a marketer 25 cents (reality is likely lower, but Facebook polls already charge clients 25 cents/response)
  • This would result in $18,128 of revenue per day
  • Or ~$6.6M of annual revenue for SocialMedia, from one app

That is no small potatoes for an application that likely cost less than $100k to develop.

Since Food Fight introduced surveys, food prices have increased significantly as the game gets balanced. Prices for food items range from $2 to $11 virtual lunch money dollars. For instance, at $10 lobster is significantly more expensive than most items with only Bubble Tea having a higher price tag.

Consider the following price comparison from June 25th of this year till October 26th, a four month time period.

  • Haggis = $1.75 / $3.40 (194% increase)
  • Orange = $.50 / $2.30 (460%)
  • Banana = $.50 /$3.25 (650%)
  • Sucker = $.25 / $2.30 (920%)
  • Shrimp cocktail = $1.75 / $3.40 (194%)

So according to these numbers Food Fight items have increased in value by an average of 484%. However, in less than a minute a player can answer enough survey questions to buy even the most expensive item - keeping the game easy and fast to play, while deriving more and more potential revenue from the same virtual items.

Going Forward
Given the fad-ish, viral-flocking nature of social networking apps, it will be interesting to see if Food Fight can maintain and grow their numbers long enough to start capitalizing on this potential revenue stream. In the meantime, SocialMedia is using Food Fight as a beta test for their social advertising network as a whole (and a host of similar apps) - electing not to charge for most, if not all, of the marketing surveys they host. (F2P.biz's request to SocialMedia for clarification on the "revenue stream, on or off?" point was not answered before this article was published).

Regardless of when SocialMedia turns on the money tap, it's clear they're onto a high-ROI free to play revenue model that traditional game developers could do well to emulate.

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