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Warcraft As A Free-To-Play Game - Part 2: The Freeaning
I originally wrote about World of Warcraft going Free-To-Play back in October of 2011 in a post entitled How To Boil A Frog - Thoughts On Tradable Blizzard Store Pets (we'll call that Part 1) .
With the recent announcement by Bashiok that Blizzard is looking to sell +100% XP Elixirs in "Asian regions" and that an in-game cash shop is coming in a future PTR I think it is safe to say that Blizzard is at least preparing for the possibility of World of Warcraft becoming free-to-play-like if not fully free-to-play.
Head past the jump for my thoughts on World of Warcraft becoming free-to-play.
Get Off My (Subscription) Lawn
I have to admit that in the past I have been mostly against the transition of World of Warcraft to a free-to-play model.
The above mentioned post from 2011 makes it fairly clear that I was trying to "ring the alarm bells" about this "terrible thing" that would happen to World of Warcraft.
Free-to-play was, at the time, still a very foreign concept to many North American player's brains. Even I, who had been professionally researching MMO business models since 2007, still wasn't comfortable with the idea.
Then something happened.
The Rise Of Free-To-Play
In the years since my original post a few major shifts have changed my own ideas about free-to-play games.
Most importantly was the rise of free-to-play games on smartphones and tablets. The iPhone has done more to expose my wife April and I to the notion of free-to-play games than anything else.
While we still almost never spend real money on these free-to-play iOS games (I'll never get that $0.99 back from Candy Crush Saga) we often do enjoy the free aspects of these games.
In addition to free-to-play games on my smartphone I've also recently played a few free-to-play MMO-type games that have changed by idea of what a free-to-play game can be.
Most notably Neverwinter and Firefall. Both of these games seem to provide a solid free-to-play experience with a distinct MMORPG flavor to it.
In addition to these games I think that it would be hard for anyone to argue that the (decidedly) free-to-play game League of Legends is anything but a success.
So What's The Catch?
So, after this glowing praise and my own conversion from a free-to-play skeptic to a free-to-play "moderate" what could possibly go wrong with World of Warcraft moving to a free-to-play model?
Let me start by saying that while I have played Neverwinter, Firefall and League of Legends (and enjoyed myself while doing so), I haven't played them long enough to run into the inevitable free-to-play "wall" where it starts to make sense to spend real money in the game.
Free-to-play games may technically allow you to play the game for "free" but they are still businesses and still need at least a portion of their players to pay them real money.
This is where things get a little complicated.
I've been studying free-to-play models in a professional and personal capacity for around 6 years now. In that time I've tried to untangle the complicated, (purposefully built) obfuscating layers that surround the inner-working of free-to-play games. (Watch for more on these "layers" later on.)
While I won't go into intricate detail of every single way that free-to-play games can try to "extract value" (ie. make money) from its players I did want to highlight a few.
I think it really shows the difference between what can be called a "skill game" (ie. World of Warcraft as it is now as a "subscription" game) versus a "money game" (ie World of Warcraft as it could be as a free-to-play game).
How Free-To-Play Games Make Money
For the following I will be referencing the blog post The Top F2P Monetization Tricks by Ramin Shokrizade.
If you want a much more thorough understanding of these concept I strongly encourage you to read the full post.
In his blog post Ramin lays out the ways that free-to-play games are designed specifically to do everything possible to make players pay.
Whether you agree or not with the following tactics I wanted to highlight them because if Blizzard is ever to be able to fully make the transition from a subscription game to a free-to-play game they will have to employ at least one (if not multiple of these) tactics to stay profitable.
Free-To-Play Monetization "Tricks"
In his post Ramin outlines what he calls "tricks" makers of free-to-play games can use to monetize their games.
Below are the "tricks" along with a short excerpt from his post.
"A coercive monetization model depends on the ability to “trick” a person into making a purchase with incomplete information, or by hiding that information such that while it is technically available, the brain of the consumer does not access that information. Hiding a purchase can be as simple as disguising the relationship between the action and the cost as I describe in my Systems of Control in F2P paper.
Research has shown that putting even one intermediate currency between the consumer and real money, such as a “game gem” (premium currency), makes the consumer much less adept at assessing the value of the transaction. Additional intermediary objects, what I call “layering”, makes it even harder for the brain to accurately assess the situation, especially if there is some additional stress applied."
"To maximize the efficacy of a coercive monetization model, you must use a premium currency, ideally with the ability to purchase said currency in-app. Making the consumer exit the game to make a purchase gives the target's brain more time to figure out what you are up to, lowering your chances of a sale. If you can set up your game to allow “one button conversion”, such as in many iOS games, then obviously this is ideal. The same effect is seen in real world retail stores where people buying goods with cash tend to spend less than those buying with credit cards, due to the layering effect."
(Note the importance on making sure players never have to leave the game to make purchases. Blizzard is looking to but an in-game cash shop on the PTR.)
Skill Games vs. Money Games
"This is my favorite coercive monetization technique, because it is just so powerful. The technique involves giving the player some really huge reward, that makes them really happy, and then threatening to take it away if they do not spend. Research has shown that humans like getting rewards, but they hate losing what they already have much more than they value the same item as a reward. To be effective with this technique, you have to tell the player they have earned something, and then later tell them that they did not. The longer you allow the player to have the reward before you take it away, the more powerful is the effect."
"Progress gates can be used to tell a consumer that they will need to spend some amount of money if they want to go further in the game. If done transparently, this is not coercive. For the purposes of this paper, the focus will just be on how this can be layered to trick the consumer into spending on something they may not have if they had been provided with complete information."
Soft and Hard Boosts
"The purpose of a money game is to promote Boost sales. Boosts that have an instant one-time effect are “soft” Boosts. Those that stick around either forever or until they are converted to something else are “hard” Boosts. The $1 “un-defeat” button in [Puzzles and Dragons] is a soft Boost, as are all of the power-ups sold in Candy Crush Saga. The obvious advantage of soft boosts is that you can keep selling them as long as the player stays in the money game."
(The +100% XP Elixir Blizzard is thinking of selling clearly falls into the "boost" category.)
"As described in detail in my How “Pay to Win” Works paper, the key to these games is to start off with the appearance of a skill game and then shift to a multiplayer money game that I call an “Ante” game. The game could proceed as a skill game but never does since once one player spends enough money it becomes a money game. At some point players keep raising their antes, hoping that the other players will fold. The “winner” (and loser) is the player that puts in the largest ante. It is not unusual for winning antes to be over $5000, and some Asian game developers that make only ante games like IGG have “VIP” member sections that you have to spend $3000+ per year for the top level of membership."
One of Ramin's finishing thoughts in the post is this:
"The more subtle the hand, and the more you can make your game appear to be skill based the more effective these products will monetize."
Will World of Warcraft Ever Go "Fully" Free-To-Play?
This is a hard question to answer. I think that them moving the spending of real-money (even for things that they already sell like pets and mounts) inside the game itself is certainly a change that seems to hint at a possible move to free-to-play.
In the past most MMORPGs that have moved from a subscription model to a free-to-play model have done so because they were no longer able to sustain themselves as a subscription game.
One of the things that I don't think many games recognize is just how long an MMORPG takes to create.
Many of the subscription MMORPGs started development at a time when subscription-based games seemed to be the best way to success in North America. (If Blizzard did it, we can do it too!)
(I keep specifying "North America" because free-to-play games have had huge success in Asia and Europe. North America seems to be the place that has help out the longest in accepting free-to-play games.)
Many see these "bolted on" free-to-play conversions of subscription-based games as "a clunky cash-grab" by a company who has failed to make a successful subscription MMORPG.
So, will World of Warcraft the seemingly unstoppable 800 lb. gorilla of the MMORPG space give up its subscription revenue to move to a revenue stream based on a cash shop?
How World of Warcraft Could Go Free-To-Play
If there is any chance that World of Warcraft will go free-to-play it is very unlikely that it will go free-to-play all at once.
As indicated by the fact that Blizzard is looking to sell +XP boosts first in Asia, it is much more likely that we will see a free-to-play World of Warcraft released in Asia first.
This will be how Blizzard tests the waters in the free-to-play space. Asia will be much more accepting of a free-to-play version of World of Warcraft.
In North America and Europe I think that the transition to free-to-play will happen much more slowly. I think that many of what we could term "cash shop" items are already being sold by Blizzard.
Mounts, pets, character services (race and faction changes, server transfers etc.) and yes, even +XP boosts will be sold inside the World of Warcraft game while there is still a subscription fee.
As time goes along I think Blizzard will analyze how much money it is making with cash shop items and try to determine if there will be a point at which the new revenue from allowing people to play the game for free (and purchase cash shop items) will outweigh the revenue they receive from subscriptions.
Another factor to consider is that one of the stops that Blizzard could make along the way to free-to-play is to drop the subscription fees but still charge for expansion packs. This is the tactic that Guild Wars 2 employs.
It's been said that free-to-play games often rely on just 5% of their player base spending money in the game to pay for the 95% of players that never pay.
Think about that. Is it possible that 5% of World of Wacraft players could spend enough money in the game to pay for the 95% of "freeloaders" that will never pay? It's entirely possible.
As time goes on I think that if the player base of World of Warcraft is accepting of there being a cash shop inside World of Warcraft and players actually find that purchasing items in-game to be a positive experience I think Blizzard will continue a slow transition to more and more of a free-to-play-like game.
How Will a Free-To-Play WoW Affect Gold-Making
First I want to thank you for indulging my interest in free-to-play models in this post. It hasn't really strictly been about gold-making but that isn't to say that gold-making, as we know it, won't be affected by a transition to a free-to-play model.
In envisioning what a post-free-to-play in-game economy might look like we have to assume that the player base will increase.
Anything when made free, especially something as popular as World of Warcraft, will be consumed more. Imagine if players no longer had to think about whether they wanted to pay the $15/month for World of Warcaft but instead simply launched the game whenever they fancied.
(I've recently been playing Rift again because it went to a free-to-play model and I can play it again without paying for it. Will I pay real-money for items in Rift? Not likely but there is a 0% chance I'd pay if I wasn't able to play the game at all.)
If (and this is a big if) what we might call the "gold economy" (the in-game gold-based economy as we currently know it) isn't connected to the cash shop I think that the economy may benefit from having more players in the game.
In general more players equals more customers which equals more sales.
If, however, there is a "premium currency" layer (see Ramin's post above for more about what a "premium currency is") on top of the "gold economy" and (more importantly) the two are inter-connected in some way (the ability to purchase gold with "premium currency" and/or vice-versa for example) then things get much more complicated for "regular" gold-makers.
If people are able to simply "buy gold" it makes gold a lot less valuable.
Right now the only ways for gold to enter the game is by killing and looting mobs, completing quests, selling items to vendors and extracting ore and herbs from the ground. That's it.
Everything else we see that is related to gold in the game comes from those few activities.
If you allow a new way for gold to enter the game (ie. buying it with "premium currency") then that could have the effect of significantly increasing the amount of gold in the game.
In general the effect of lots of new currency entering a economic system is inflation. Inflation means that as more currency enters the system prices also rise.
This means that people who made gold in the past now have less buying power then they did before because things cost more.
Inflation isn't really anything new in World of Warcraft. 500g seemed like a lot of gold to players in Vanilla. In today's in-game economy 20,000g seems like a lot of gold.
I don't think inflation is the only problem we have to worry about with a free-to-play World of Warcraft with a cash shop.
It is entirely possible that Blizzard itself could start selling items for real money that would supplant those sold by the player base thereby losing gold-makers money.
I think that Blizzard is a smart company. I think that Blizzard makes smart business moves. I think that Blizzard over the years has done a very good job parting me with my money.
I don't think that Blizzard is stupid. I think that they are fully aware that the future of many types of games is free-to-play.
I think that they are putting things into place (in-game cash shop, virtual servers, etc.) that will allow World of Warcraft to make the transition form a subscription-based world to one dominated by free-to-play offerings.
In doing so I think that Blizzard may be one of the first companies to take a currently successful subscription-based game and move it to a free-to-play model without having failed first.
I am no longer as concerned that a free-to-play World of Warcraft will be "the end of Azeroth".
Games like League of Legends and Firefall have shown me that there is room to have a successful game while still having it be free-to-play.
I still have reservations about many of the implications of a free-to-play World of Warcraft.
These mainly revolve around the fact that Blizzard will have to change the World of Warcraft in ways I may not like. Implement some of the "tricks" that Ramin outlined in order to make a successful free-to-play game.
There is always a chance that Blizzard will botch a free-to-play transition and in doing so somehow cripple and/or make World of Warcraft so unenjoyable that I will want to look for other games to play.
You know what? If that did happen and I did look for other games to play you know what I'd likely find?
That's right: a bunch of free-to-play games.
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