[Editor's Note: Contributing writer Simon Newstead is CEO & Co-Founder of girl avatar game Frenzoo, a 3D fashion startup. He can be contacted at: simon at frenzoo dot com.]
Billing itself as one of a new breed of pure play web publisher, True Games Interactive opened shop at the beginning of 2008 is expanding its team and title list. We invited CEO & Co-Founder Bob Drobish to reflect on their first year and where free-to-play social games are heading.
How did you start True Games and how has the first year been?
We began True Games by stepping back and doing our home work. We looked at player interests, trends in the industry, and the gaps between the two. From that we built a business model and a plan that was compelling enough to attract the best professionals and business partners in the industry.
We were fortunate enough to attract people like Peter Jarvis formerly of NC Soft and Peter Cesario formerly of Namco Bandai. We were also fortunate enough to attract business partners like Petroglyph, GOA, and Possibility Space. Of course, one of the highlights of the year was connecting with global media giant UTV as both an investor and strategic partner. It has been a great year.
Your first game announcement was Warrior Epic. Are you focusing on any particular type or genre of games?
We have exclusively focused on micro-transaction based online games. Our immediate titles are exclusively designed for PC. The two titles that we have announced so far, Warrior Epic (Developed by Possibility Space) and Mytheon (developed by Petroglyph) will be downloadable clients, but with a twist…
From a gamer point of view, are there any synergies between games on your platforms?
Yes, there will be synergies in terms of billing and currency, but we feel that this isn’t the most compelling aspect to gamers. We believe that it is the overall quality of the player experience throughout the full lifecycle of a game that gamers want and need. That being said, our platform will offer user-friendly, mechanical conveniences that will add to the quality of the overall player experience.
How do you view the economic climate and how that will affect the F2P market either good or bad?
The economic climate is of course challenging for us as it is for all business. As an industry however, I think that online, micro-transaction based games offer a uniquely compelling entertainment value proposition. In these economic times, we’d expect that the most cost-effective entertainment options would have an advantage and we think our business model fits into that category. Gamers do not have to spend $60 up front on our games. They can download it at no cost, play as much as wanted with no subscription charges; while having options for micro-transaction purchases.
Is True Games targeting a global audience or focusing on US and English speaking markets?
All the IP’s that we establish are designed with a global audience in mind. Some western markets we will serve directly. Others we will serve through syndication partners with local expertise; but always designed for and distributed to a global audience. Player interest in games is global. The internet is global. So yes, we have developed games from the ground up to cater to players all over the world.
Many believe that old subscription models will give way to pure micro-transaction models, what’s your take?
There is an undeniable trend toward micro-transaction based models. Our research shows that this will continue in the years to come. However, I think the market will continue (at least for the foreseeable future) to offer subscription and micro-transaction based models; in some cases both for the same title. We believe there will be a rise in various hybrids of the two forms. Ultimately, the most successful model will be the one to serve the player best. This will require extensive testing and research.
What is the most exciting development you anticipate in 2009 for the industry?
The most exciting development we anticipate in 2009 (and what our business is built upon) is the launch of AAA games with a free-to-play model. Clearly, there are a lot of free-to-play games and AAA games. However, there is no successful AAA game with a micro-transaction based model in the western market. To develop this will be our most exciting endeavor in 2009-not just for our company but for the industry as well.
Raph Koster of Metaplace gave a video interview with F2P.biz during last month’s Austin Game Developers Conference. It was embargoed until just recently, so here it is now. Thanks, Raph!
Just last week, F2P.biz had the chance to sit down with Alex Garden, CEO of Nexon Publishing North America and Humanature Studios, at their downtown Vancouver offices.
In the following video interview, Garden talks about the free to play business model, the difference between Eastern and Western markets, NXPNA’s current projects and more.
Leigh’s been a friend of F2P.biz since its inception, when she was kind enough to run several of our articles on the site she managed at the time, Worlds in Motion (a Gamasutra “sister” site). Since then, Leigh spent some time at Kotaku before rejoining the Gamasutra family as News Director of the main site, Gamasutra.com.
Leigh recently gave us some of her time at Austin GDC, doing an excellent video interview that fell victim to random audio difficulties. But because the content of that interview was too good to let die, we conducted a written interview with Leigh after the show.
Here is that interview:
You are a well known commentator on the virtual world space. How did that happen, how did you get to where you are today?
Haha, I am? I guess that’s one of the benefits of getting in somewhat early in a space that emerged quickly and got a lot of people excited about it. I was fortunate to be chosen by Simon Carless as the first editor of Gamasutra’s sister site Worlds in Motion focusing on online worlds, and I suppose I learned a lot by covering the space and talking to the people who are pioneering it. I also planned the inaugural Worlds in Motion Summit at GDC in February 2008, and while I didn’t have a hand in the track you saw this year in Austin, a lot of the ideas came from there.
How was the Worlds in Motion Summit this year?
It was good! Austin was sort of an interesting climate for it, because surprisingly some of the presentations I thought of as “Worlds in Motion’s Arena” were taking place across the board during the main conference. I’d hoped that some of the concepts and methodologies finding success in online social spaces would start proliferating across the game space, but I’m surprised it’s happened so quickly! Still, I think we brought some unique stuff to the table.
What were the big issues and stories in the MMO/Virtual World space in 2008?
It seems to me like 2007 was the year that a lot of people, from investors to developers to consumers, realized we had a full-fledged phenomenon on our hands. This year, I think, is the year that a lot of fledgling products will be tested. As we’re looking at what’s launching successfully and what’s not, and what’s taking off and what’s foundering, I think the biggest issue is for individual products to evaluate their substance a bit and perhaps specialize their focus a little. For a while, I think a lot of us operated under the idea that having the word “social” in your product description was enough, and now, I think a lot of these online spaces, even if they operate wholly in a “free” environment — free to play, driven by user-generated content, and free of any kind of video game linearity, are seeing that they do need some kind of backbone in structure, and for that they look back to the game industry.
We’re also seeing a quality bump start happening, I think. For example, even looking at Facebook, at first a Facebook user could get about a billion requests to add apps per day — now that the user’s maybe tried one too many “advertising in disguise” games, or one too many low-quality apps, the industry is having to adapt to a savvier user for whom all this is not so new. One of the ways in which new entries to the social gaming space can differentiate themselves is by presenting a really polished experience that’s clearly grounded in good game design.
So virtual worlds are starting to look to more game structures, and social/casual games are starting to look to more traditional quality levels, and traditional MMOs are now seeing how crucial social elements can be, adding the ability for gamers to dance and make music together. Just today, I believe, I saw an announcement that PopCap is adding a Bejeweled-style game to WoW, because sometimes even hardcore players would like that casual social experience. So there’s a lot of cross-pollination now.
What do you see as the big trends that will emerge in the MMO/Virtual World space in 2009?
I hope that the cross-pollination will continue, wisely. At first there was a lot of excitement around certain key concepts, and what I saw as a rush to implement them, and now I think the trend will favor a disciplined and appropriate implementation of things like social elements and alternative revenue streams, or asynchronous options for multi-user environments — because as Raph Koster said in a panel at AGDC, new products need to tailor their approach a bit to how people are already using the web. I think we’ll see a lot more of that.
And strictly speaking on the MMO space, with World of Warcraft in the position it’s in, and with MMOs such a high-risk and volatile space, I think that traditional online game companies making MMOs are increasingly challenged to find real staying power in the space, to hang in long enough to actually make some money and develop a user community, and they’re going to need to get more creative — I think they’re going to start looking to these emerging trends a bit more to differentiate themselves.
What are the major challenges Virtual Spaces feature before they can truly go mainstream?
The major challenge is how we define virtual spaces! As I said, I think a lot of people are excited about “virtualization” without having yet a standardized idea — or even a clear idea — of what exactly this means, and what it’d look like, and who its users will be, and where we ought to apply it and where we ought not to.
We have all the ingredients for mainstream success — browser-based interfaces that anyone can access, low barrier to entry in design that focuses, as Raph Koster said, on the everyday web user, and we even have mainstream cultural penetration. Your average consumer is already getting hands-on experience with multi-user, web-based interaction via Facebook and MySpace, which are now household names, and even something much more traditional like World of Warcraft is the stuff of evening TV. People are now wholly familiar with and comfortable with paying for things online, with having a user ID, with playing casual games. These things have penetrated our cultural fabric, and we’ve got the city all built to receive the new occupants, but I think where we’re challenged right now is finding a broad implementation that’s beneficial to others beyond those who have already adopted it. We’ll be successful at that when we implement online visual spaces, and avatar-based interaction, for example, in areas where it’s a definitive and clear enhancement on the way we already do things.
Do you think the free-to-play business model is now accepted by the North American mainstream? In the West, its adoption has, at times, been met with suspicion and reluctance. Are we past that and if not how do we get there?
I think the suspicion and reluctance originates primarily in the core video game community, and with designers who have come from a video game or pure MMO background. When games are free to play, they monetize in one of three ways, or a mix of the three: Through paid-for virtual items, through advertising, or through tiered subscriptions. Strictly looking at these options from a game perspective, each of them could possibly unbalance or degrade the gameplay.
For example, with microtransactions, players will likely only spend money on items that have an enhancing effect on their gameplay. So basically, the fear is that paying users will be able to have game advantages that non-paying users don’t. There’s the same suspicion of tiered subscriptions, a fear (that has been borne out in reality, somewhat) that the free players are being “ghettoized,” treated as less valuable by the game operator or simply having a much more limited game experience.
In both of these cases, yes, there is a free option, but not paying becomes a penalty in the context of a gameplay experience. From the designer’s perspective, allowing users to be able to buy game enhancements becomes really challenging, because they need to keep the game balanced in order to make it enjoyable to all, and to achieve this they’re suddenly tasked with managing a highly complex economy, something they might not have bargained for.
There’s always some core gamer resistance to advertising, as well — the vocal core of the game audience is very sensitive to integrity and will lash out against games they see as selling out to brands.
This audience, I think, will never get “past” it. They have declared quite clearly their desires and expectations from their game experience and I think that there should continue to be products that address that. But there’s a broad userbase that exists outside the hardcore gamer, believe it or not! That’s something that it’s hard to be aware of, acclimated as we are to a sort of “internet gamer community.” The people that we see the most often, and that are part of our most immediate culture, are not necessarily the largest percentage of the consumer population.
Just as concerns advertising, there’s been research done that finds that there’s a kind of consumer that would like brands in their online spaces, to enhance realism. There’s a kind of consumer that would prefer to pay in RMTs instead of subscriptions, and the current generation of kids and teens is growing up in an area where everything on the internet is free, period. They’re going to continue to expect that. So the traditional audience might be hostile to a new way of doing things, but my impression is we’re implementing some of these new concepts with the primary aim of welcoming in a new audience.
As summer comes to a close, conference season is whirring up to speed for fall.FreeToPlay.biz is happy to announce we will be covering Austin GDC and the Worlds in Motion Summit from September 15 – 17.
Our coverage will include postings on the sessions themselves as well as text and video interviews with leaders in the free-to-play sector.Over the next couple of weeks expect to see interviews with (but not limited to) the following people:
Leigh Alexander - News Director, Gamasutra
Min Kim - Director of Game Operations, Nexon
Mike Zummo - Lead Designer, Acclaim
Nabeel Hyatt - CEO, Conduit
Chris Anderson - Editor in Chief, Wired
Jeremy Liew - Managing Director, Lightspeed Venture Partners
Gene Endrody - CEO, Maid Marian
Thomas Bidaux - VP of Strategy, Avaloop
Alex Garden - CEO, Nexon Publishing North America
If anybody has any specific questions for anyone on this list, let us know and we’ll be sure to bring it up.
For those of you headed to Austin as well, drop us a line if you’d like to connect for coffee or have a killer party we should attend.
FreeToPlay.biz is looking for an insightful industry commentator to join our team. FreeToPlay.biz covers social games, online games and virtual worlds for industry insiders. For more info on who we are, see the “Who is” section of this site.
Our selected writer will be capable of creating news with analysis, crafting fact-supported feature articles and conducting insightful interviews. The job can be done from your laptop anywhere in the world, but some paid travel (i.e. to cover conferences) may be involved.
Application criteria:
Please provide only one submission. Must be online game or core game business related, not a game review.
If you don’t have a submission directly related to the topic, submit your best piece of critical analysis and explain your background/knowledge of the online gaming or core game business.
Must have passion for business side of the game industry, be professional and articulate and available to post with consistency and meet editorial deadlines.
Regular online writing rates apply, with performance bonuses.
Please review some our most popular posts (here, here and here) to get an idea of what we’re looking for before applying.
Express your interest by sending the aforementioned materials to:
Warrior Epic is a new free to play online RPG being developed by Possibility Space, a company founded by Gage Galinger and Feng Zhu; a pair that share a wealth of experience between them, from Starcraft to Gears of War.
As a free to play game it comes across as competent and quite polished, and it’s just leaving closed beta. Essentially a dungeon crawler, players own a great hall that stores their characters and serves as a meeting place for quests.
There are a number of different warrior classes (and some that must be paid for), but the hook is a sort of metagame wherein players can choose to harness the spirit of one of their fallen warriors as a power for their next warrior. It’s well scoped and well designed to be a free to play RPG, but what’s most interesting is how they plan to handle paid content and digital downloading.
While the usual cosmetic items are part of the plan, Warrior Epic is taking a refreshing stance towards satisfying both free players and paid players – a problem Flagship’s Hellgate London ran into when they offered paid players better gear, bigger inventories and faster travel times.
Brice Lukas, Community Manager for Possibilty Space had this to say about sustaining that balance:
“In Warrior Epic you cannot purchase power or progress. The best gear and items can only be obtained by playing the game. There is also no exchange of earned items with paid items. So anything that a user buys with real cash cannot be obtained with in-game currency.”
One of the things a player can purchase (for a small price) are buff items that will help players get through dungeons and closer to the real loot.
“Each mission in Warrior Epic is designed to be roughly 15 minutes long, and the number of these buffs you can carry is limited, so they will not unbalance the play.”
Last but not least is Possibility Space’s distribution model, what the company has dubbed “Download on Demand”. Players register on the site and then download a small .exe file that will stream content from seed servers. The whole system is similar to torrents and is expected to allow the game to be quite portable. Since account information is stored on the seed servers, players can download the same .exe on any computer, which is run from the folder it’s in rather than needing an install.
We’ll have to wait and see if Warrior Epic proves to be a game that lets players download and start playing within minutes, but it’s safe to say that players will appreciate the lack of usual hoops to jump through. The more players get exposed to a free to play game the better, and with an approach like this there is a good chance that a significant amount of players will at least consider getting involved enough to start paying for items and warriors.
“Our intention is to expose a much larger set of people to the fun of online gaming. We want to take all the fun parts of games that hardcore gamers enjoy, and package those up in a product that everybody can experience. The key behind this is to lower the barrier to entry.”
OnNet USA is the American subsidiary of OnNet Korea a developer of multiple free to play online games. The American branch of the company acts solely as a publisher through their portal site Games Campus.
Today, OnNet releases their newest game, a free to play third person shooter titled Manga Fighter. We spoke to YJ, Manga Fighter’s Producer, about the project and the free to play model in general.
What is the relationship between OnNet Korea and OnNet USA?
OnNet Korea is an software developer creating search engines and other similar products. OnNet USA is an online publisher of free to play games. They’re two different ideas with two distinct identities.
OnNet USA opened it’s doors three years ago with the launch of our golf game Shot Online.
What did you learn from that experience and what has been carried over to Manga Fighter?
We weren’t very well organized which was a big challenge so this time out we made sure to have the proper management in place. That’s the real risk area with a project like this you need excellent management.
The other important lesson concerning constant content updating. With a free to play game and a virtual goods revenue model you have to make sure that there is always new content for the players. We found that to be the key to player retention.
It’s hard to discuss MMOs without mentioning secondary markets for virtual goods and currency. What are your thoughts?
We’re very aware of the secondary markets and the emerging issues associated with them. At this point we’re taking a neutral stance and kind of waiting to see what the industry trend as a whole is.
Why have the global launch of a manga style game with the virtual goods model in America. Why not use the Korean market where both of those things are more mainstream?
Well in a lot of ways this is a new game for any market. It’s a fast-paced third person shooter aimed at a younger audience and there’s not much out there like that. We believe the US is a great testing ground for our new content.
Just three years ago, some declared the free to play model wouldn’t work. Today it’s beginning to get big. It’s not quite mainstream yet but we’re heading in that direction and America is a huge potential market. There are a lot of gamers in America.
What about the release cycle. OnNet ran two beta tests and a boot camp? What was that?
The Boot Camp was just a term for our third beta. In fact even now that we’ve opened the game up we still haven’t implemented all the commerce aspects of the game. This is more like an open beta and then we’ll see how the market responds before launching the money aspect.
What kind of marketing has gone into the launch of the game?
We haven’t done any big budget marketing campaigns but viral marketing has worked well for us. We’re also mailing collectible cards to players with a code on them. The code unlocks premium content in Manga Fighter and down the road we’re looking at getting these cards into retail outlets.
The other thing we’re excited about is the possibility of getting some famous faces from the rest of the manga universe in game. I can’t release any details yet but we’re in discussion with some major publishers.
Thanks for your time YJ and good luck with the launch of Manga Fighter.
From a Fortune article, EA CEO John Riccitiello had this to say about the free to play business model and how it will affect traditional retail games.
Riccitiello says the $31 billion gaming industry will suffer if it doesn’t start to reevaluate its business model. Game executives at Sony (SNE), Microsoft (MSFT) and Activision (ATVI) must answer some tough questions in the coming years, like how long they can expect consumers to pay $59 for a video game. Riccitiello predicts the model will be obsolete in the next decade. [Ed: emphasis mine]
“In the next five years, we’re all going to have to deal with this. In China, they’re giving games away for free,” he says. “People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt.” As more publishers transition to making games for online distribution, Riccitiello says he expects EA will experiment with different pricing models.
As a colleague just said to me in an email, “It’s encouraging to see they (EA and big publishers as a whole) recognize the issue”.
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). F2P.biz 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.
Billing itself as one of a new breed of pure play web publisher, True Games Interactive opened shop at the beginning of 2008 is expanding its team and title list. We invited CEO & Co-Founder Bob Drobish to reflect on their first year and where free-to-play social games are heading.
OnNet USA
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.
