GD Column 4: Designing for Free

The following was published in the November 2008 issue of Game Developer magazine…

In China, a new MMORPG with a very aggressive business model, entitled ZT Online, has gained significant popularity. With an ARPU of $40/quarter spread over one million paying users, the game has made its publisher, Giant Interactive, one of the most profitable online entertainment companies in China.  Like many Asian games, ZT is free-to-play (F2P) and focuses primarily on player-vs-player gameplay. Not only can players steal from their defeated foes, but weaker characters can even be kidnapped and held for ransom, locking their owners out of the game.

Access to equipment in ZT is very limited. First of all, there are no loot drops from killing monsters or completing quests. Further, all items in the game are completely bound to the owner, so there is no way to trade for better weapons with other players. Instead, the primary way to gain equipment to empower one’s character is by paying real money directly to the publisher to open “treasure chests.” Essentially in-game slot machines, these chest have only a small chance of producing something useful, and finding the best equipment often requires opening thousands of chests. In fact, each day, the game confers a special bonus to the player who has opened the most chests, meaning the player who has spent the most real-world money to obtain better items.

ZT Online‘s complete embrace, at every level of the game, of real-money transactions (RMT) may be appalling to some in the West, but the game is in many ways at the vanguard of a trend to develop games that take advantage of the players’ appetites for spending money to gain in-game advantages. Ironically, the F2P-with-RMT model traces its origins to the challenge of getting Asian gamers to buy boxed, retail games, most of whom preferred the free ride of easy and widespread piracy. In response, Korean companies like Nexon and NCsoft built server-based online games which could not be pirated and would require alternate business models.

Starting with subscriptions (including the world’s first million-subscriber MMO, NCsoft’s Lineage), the Korean industry eventually shifted to F2P games that made money from micro-transactions, such as Nexon’s KartRider and MapleStory. With many of these online games serving tens of millions of players, the Korean model has begun attracting the attention of major Western publishers, who have chartered their own F2P games in Asia, such as EA’s FIFA Online, Valve’s Counter-Strike Online, and THQ’s Company of Heroes Onine.

The promise of F2P games is that gamers will get hooked on a free game and then eventually spend their own money on their new passion. However, designing these games is not a simple endeavor; in fact, the challenges of F2P design can make developers appreciate how fortunate they were when they could design for a fixed-cost product, either a boxed, retail game or a standard, subscription-based MMO. In a fixed-cost world, the designer can focus on just one thing: making the player’s experience as engaging and interesting and fun as possible.

For a F2P game, however, designers have to balance making free content fun enough to engage first-time players but not so much fun that they would not yearn for something more, something that could be turned into a transaction sometime in the future. Every design decision must be made with a mind towards how it affects the balance between free and paid content. Thus, the true cost of piracy is that the line between game business and game design has blurred. As games move from boxed products to ongoing services, business decisions will become increasingly indistinguishable from design decisions. Of course, the industry has seen game designers play businessmen before – a fundamental part of arcade game design was understanding how to suck the most quarters out of players. Thus, understanding how successful F2P game have navigated these waters is instructive.

Business or Design?

The aforementioned 2D MMORPG MapleStory has an in-game RMT store in which players can purchase items for their characters. These purchases can range from purely cosmetic items, such as funny shades or blue-colored hair, to consumables which give actual in-game bonuses. These consumables include tickets for earning double experience points over 24 hours, avatar warps for triggering instant travel, and ability resets for realigning character traits. In a nod to in-game fairness, these bonuses only save the purchaser time instead of directly increasing the power of his character. This distinction is important as RMT can still have in-game meaning without needing to be tied to the game’s best weapons and equipment, as with ZT Online.

Maple Story Cash Store

Another popular F2P game with a different business model is the web-based MMORPG RuneScape, which uses optional subscriptions instead of optional microtransactions. Subscribers gain access to more quests, new areas, player housing, and extra skills. Again, the designers have to decide where to draw the line between free content to grow the game and paid content to drive revenue. As one in every six active players currently chooses to subscribe, they have struck a good balance.

Travian, a successful web-based MMO strategy game, does allow players to purchase temporary in-game bonuses, such as +10% attack strength or +25% wood production for a week. These bonuses have been controversial among the community as many players feel obligated to buy them in order to compete at the highest level. Gamers can also purchase Travian Plus, which unlocks an improved interface to make playing the game more efficient. The Plus mode includes a larger map display, a combat simulator, empire management tools, graphical info screens, and queued construction orders.

As a comparison, all of these features would be expected in a similar boxed, retail strategy game, such as Civilization 4. However, by withholding their best, the designers are walking a dangerous line here as players could be turned off by the purposely crippled interface. For example, in Travian, each of your towns can construct only one upgrade at a time. Thus, players are encouraged to visit their towns every time an upgrade is finished, and as each upgrade might take half an hour, players may need to check the site many, many times each day just to keep pace with their competitors. A simple order queue would fix this problem, but the designers purposely decided to offer this feature only to players willing to pay for Plus.

Whether this decision was right or wrong remains an open question, but perhaps a more important question is who made this decision? Game designers or businessmen? Does it even make sense to think of them as being different in a world where every element of a game can be given a price? Without a good balance of the needs of profit and of fun, F2P games will feel either like a con job designed to suck away all of the player’s money (as with ZT Online) or a charitable endeavor that never acquires the resources needed to develop and grow. However, when facing a difficult decision, one should always err on the side of providing the best free content possible. Greedy developers looking to maximize profits in the short-term risk losing their evangelizers willing to spread the word about a great game which is genuinely free-to-play.

A Free Market Solution

One interesting way to solve this problem – pioneered by Korean companies like Nexon – is the dual currency system, which lets the free market manage the balance. The Java-based MMO Puzzle Pirates employs such a system to meet the needs of both players who are time-rich and players who are cash-rich. One type of currency, Pieces of Eight (PoE), is earned by spending time playing puzzle games while the other type of currency, Doubloons, is bought directly with real money. A wide variety of items are available for purchase, with effects ranging from aesthetic changes to in-game upgrades. However, as items often cost both types of currency, players who cannot afford to buy Doubloons can trade for some by giving their PoE to cash-rich players. These latter players may need the PoE because they don’t have the time to spend earning it by playing puzzles for hours. By allowing players to freely trade the two currencies, the designers have created multiple paths to earning any single purchasable item.

Puzzle Pirates Exchange

Thus, the designers avoid the balance issues faced in Travian by making sure that all content and features are available to all players, whether they are willing to spend money or not. In fact, when a time-rich player trades for Doubloons, the cash-rich player is essentially “sponsoring” her peer – every Doubloon spent in Puzzle Pirates earns the developer money, whether the Doubloon is spent by the original purchaser or not. A natural free market dynamic keeps the two sides balanced. If too many time-rich players flood the game, the value of PoE will plummet, tempting players on the bubble to spend a little cash to take advantage of the low prices. Thus, with the help of the auto-balancing market forces of the dual currency system, the designer’s goal simply becomes creating a compelling experience that keeps people playing the game.

Even Giant Interactive is beginning to understand the limitations of the soak-the-rich design of ZT Online. The publisher is developing a subscription-based version of ZT (without the casino-style treasure chests) that is being launched for the low-income market not happy about playing a game full of rich players who have bought their way to the top. Another game they are publishing, Giant Online, aims for the middle-income segment by allowing RMT but adding spending caps to prevent a monetary arms race.

These developments are welcome because the free-to-play format holds great promise. F2P games have a much larger potential audience than their fixed-cost counterparts because of the former’s ability to satisfy different levels of player commitment, both in terms of time and money. Further, the potential for innovation is greater because consumers are no longer required to make a “leap of faith” when making a large, up-front retail purchase. However, the challenge of developing F2P game is that being “just” a game designer is no longer sufficient. Success, both in terms of profit and popularity, will be determined by how well the game design matches the business model.

30 thoughts on “GD Column 4: Designing for Free

  1. I’d be curious as to how you could make Civ4 into a F2P/microtransaction-driven game. In the strategy genre, I read that the European developer Monte Cristo is trying to make the conversion from fixed-price boxed retail product (City Life) to some kind of strategy-MMO hybrid in Cities XL.

    PS: I think you mistyped “held for ransom” as “held for random”

  2. First off: Excellent article that highlights the biggest difficulty in F2P games design: Figuring out how to not make your game appear crippled while still offering value for money to the paying customers.

    However you appear to have pasted most of the article a second time into the middle of the page.

  3. Very informative, but there’s some kind of formatting snafu here with repeating paragraphs (particularly in “A Free Market Solution”, which is also used twice as a heading).

  4. Never mind, the page seems to have fixed itself when I commented. I’d opened the page via RSS feed, and somehow it didn’t load right the first time.

  5. I’m really quite fond of the Puzzle Pirates model, which in my opinion does a lot of things right, from their doubloons system to their character customization.

    Interestingly, I’ve grown increasingly disenchanted with purely competitive games that skew towards the players who have invested the most time/money, free-2-play or not. I mean, it’s justifiable for a developer to want to offer those benefits to encourage long-term play, but in a competitive environment, it relegates low-committment players to second-class citizens without hope for recourse.

    Also, here’s an interesting article about ZT Online from late 2007: http://www.danwei.org/electronic_games/gambling_your_life_away_in_zt.php

  6. I don’t like games where you can buy in-game advantages. That’s why I stopped playing Travian.

    I happily pay the “Supporter” subscription for Hattrick each year, especially because money gives you mostly cosmetic things and a few statistics. And Hattrick can be played very well with just 1-2 hours per week.

    I’d like more od such games where you don’t need to have real money and you don’t need to have unlimited time.

    But the Doubloons system sounds like something I could hink about liking.

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  8. Call me crazy, but I’m dying to play a game where I can spend my money to either advance my avatar or for whatever other reason (real estate, cosmetics, ingame businesses, etc).

    I have long been wishing that there would be a Civ4-like game with RMTs! I have even wrote down ideas on how something like that would work. It could get really complicated, HOWEVER, that is the WHOLE POINT. As in software, making an application as end-user friendly as possible actually makes it very complex to code.

    Making a Civ4-like game with RMTs would be awesome and I’m sure I’ll be playing it as much as I financially can. I’m already playing a game (Entropia Universe) that I deposit an average of $200 USD per month to play. However, I’m now also looking to have a turn-based game to play as well.

    I really don’t understand why, but I think the West game companies are overlooking a huge potential market, especially in the United States. I’m sure I’m not the only player (35 yrs old btw) that is willing to fork over money to play online. If there was a Civ4-like game that would cost me say, $60-$100 per month to play at my desired level, I would BE HAPPY TO DO SO!

    For those people who say that it’s not fair to have games like these because cash-rich players advance by simply depositing more money, I completely disagree with you. Depositing money to advance puts you on a different playing field, that’s all it does. The game will be broken into various levels, say those that don’t deposit and those that do, for simplification purposes. You’ll be surprised how different the same game would feel on either side of this “railroad”. This is what builds the anticipation for those on the non-deposit side.

    I can go on and on about this because I passionately feel that the US is overlooking such a market. I have so many visions of such games working that I look forward to whoever has the balls to create one in the States and get rich from it. I’m going to continue planning and brainstorming this concept and perhaps, I’ll be that innovator :).

    Enjoy your subscription-based games all… 🙂

  9. Another interesting example of F2P is Kingdom of Loathing, which uses a system similar to Puzzle Pirates. In this case, doubloons are replaced by an always-useful “Mr. Accessory” item, which can be exchanged for a monthly exclusive conditionally-useful item. This guarantees that new updates are created every month, providing players with new content and encouraging them to contribute regularly.

    @Luis B, I think you’re overestimating the willingness of U.S. consumers to pay incremental fees for things they can already get for a one-time fee. Do you remember the Divx fiasco from ten years ago?

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  11. This is more a comment to Luis B’s comment:

    You said you wanted to play a game where you could advance your character with RL money:

    “but I’m dying to play a game where I can spend my money to either advance my avatar or for whatever other reason”

    However your defence for other players whining about not being able to compete was to split the game into various levels, split aroudn those that do and those that don’t deposit money.

    If that is the case, and you’re only playing against other people who deposit money, aren’t you taking away a large portion of the ‘I want to succeed more than other by putting money into the game’?
    You’d only be playing against other people who deposit money, and therefore your money would buy you far less of an advantage than if you were playing against everybody?

  12. Gotta say I hate the F2P model for many reasons.

    The primary reason would be the fact that it is just a really extreme catalyst to addicted players. The model subtly forces them to either spend more and more cash or more and more time, or both.
    This really doesn’t incorporate the values I have learned to appreciate in my life.

    Second reason… games are supposed to be fun. A place where you spend time with friends doing some fun things, enjoying yourself. The whole notion of “Wanna be better?! insert coins here!” these games are based on destroys the very foundation of a good game.

    Whatever. I just hope this model doesn’t make it on a larger scale. If the real developement teams cave in to this trend I’d have to say that my my time with computergames would be over. I just couldn’t see how games are supposed to be good entertainment with this type of “Gimme the cash c’mon gimme gimme GIMME!” mentality.

  13. I’ve played a few P2P MMO’s and more F2P MMO’s. The only one’s that really got me hooked are the P2P MMO’s.

    The F2P MMO’s always turn me off in the end because eventually it’s not fun playing without buying an advantage. And that is never my intention with playing those games.
    And the content of these games have always been kinda poor in my opinion. The “Beta-feel” lasts much longer and new free content isn’t released that frequently.

    Now, both of the P2P MMO’s released “free” expansions (Lineage 2 and Eve Online) on a quite regular basis.
    The problem these games still have is that some people can pay more to get an advantage. (Ebay, IGE, etc)
    Eve online has incorporated this into the ingame market, where players can buy and sell so called PLEX’s. (Pilot Licence Extensions) that extend your subscription with 30 days. I kinda like this system cause I can play the game for free this way.

    In Lineage 2 the servers were crawling with Chinese farmers that eventually organized themselves into clans that, on my server, basically owned the Raid Bosses. Another problem where the bot-parties, where the entire party was controlled by a bot program. Sometimes these groups where hogging the best leveling spots, which forced us as legitimate players to learn either how to play around the issue or take care of the issue.

  14. Soren, my dear friend, much like all Western designers ever, you understand fuck-all about arcade games. Read this and wake the fuck up:

    http://insomnia.ac/commentary/arcade_culture/

    Arcade games were never about “munching quarters” or whatever — only WESTERN arcade games were about that. JAPANESE arcade games were about THE EXACT OPPOSITE.

    Meh. It doesn’t matter how many decades pass. The White Man will never understand the concept of skill-based gaming.

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  17. Yeah F2P is where the money is at. The game publisher of ZT Online makes a lot of money. They are called Giant for a reason.

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  19. I think Riots League of Legends uses a similar system with two currencies. One is earned by playing games, the other one can be purchased.

    All necessary/important things in the game can be bouth with the first currency, only skins require the real-money virual currency. It’s an interesting system indeed.

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