The Rise of Free-to-Play: How the Revenue Model Changed Games and Playing

Serious and professional gamers may not mind paying for games which have in-app purchases and other microtransactions. But most casual gamers and newcomers prefer trying out games for free. This simple gaming preference is the reason behind the free-to-play rummy games that you enjoy. You even get free tips on how to play rummy in such apps.

The free-to-play (FTP) gaming model is in no way cutting the margins of the gaming companies. On the contrary, developers continue to create free games and enjoy the revenue streams that it offers. Among the gaming developers, a significant 36% are engaged in Free-To-Play games only. From the olden times when you would pay for every console game title, you have a massive FTP universe to choose from.

The Rise of FTP Games

It is safe to say that FTP games have completely reshaped the gaming industry. With no initial costs involved, it has attracted billions of gamers into its fold. This has increased the model’s economic significance.

Asian markets like South Korea and China were the early breeding ground for FTP games. Initially, it was a response to the rampant game title piracy and the internet café culture. These early developers aimed to completely bypass the cost barrier to entry and monetise only a subset of the gamers. As the number of FTP gamers increased, this subset became a major revenue spinner for the industry.

Multiplayer, online role-playing games like MapleStory set the trend, while Lord of the Rings Online shifted to FTP in 2007. Social media collaborations were critical to the early popularity of the FTP model. You might remember the immense popularity enjoyed by FarmVille on Facebook back in 2009. Successes like FarmVille ushered in millions of first-time gamers. It was also successful in opening up microtransactions as a revenue stream.

By the next decade, the FTP model consolidated further as games like League of Legends, Team Fortress 2 and Fortnite went FTP and dominated PC and console gaming.

Overcoming the Challenges

The road to FTP was cleared by the transition from console-based games to digital era, mobile-first gaming experiences. As mentioned above, the monetisation done by FarmVille opened up new possibilities for FTP games. However, there were challenges as well.

The monetisation possibilities of the FTP model were not yet recognised, and the gaming industry was unsure about the commercial viability of the model. In these early days, online gaming company Kabaam developed several first-party and third-party games for mobile platforms, as well as social media and web platforms. They capitalised on the popularity of movie franchises like The Hobbit and Fast & Furious to create engaging FTP games.

Over the years, the FTP model has faced challenges and criticism for more than one reason. In the case of some FTP games, the monetisation strategy was found to be too aggressive by the gamers. Star Wars Battlefront II was criticised for its aggressive microtransaction policies. Diablo III had a real money auction house, while many other games promoted in-app purchases a tad too imposingly.

Another challenge that FTP games had to overcome was the quality issue. These included unsatisfactory graphics, persistent bugs, absence of popular features, performance issues, and absence of non-playing characters in the storytelling.

A lot of these challenges were self-created by the FTP gaming developers themselves. They would rush the launch to open up the microtransaction and in-app sale revenues. This would leave behind bugs and other quality issues, which were then addressed through updates. This soured the gamer’s experience. The development team faced pressure to rectify as the overall quality was compromised at the onset.

Monetisation in FTP

In present-day FTP, the revenue model rests largely on microtransactions, in-app purchases and advertisement revenue. All of these payments are kept voluntary but strategised in a way that makes them tempting. The role of game design is crucial in this regard, as developers have to keep the planned monetisation strategies in mind while developing.

As an FTP game player, you can buy virtual items and assets such as weapons, ammunition, extra lives and so on. Your buy-ins for rummy games are one such example. Thus, a large financial transaction is replaced by multiple transactions of a small amount. This has given rise to the pay-to-win concept, where players increase their chances of winning with these purchases.

The developers create placeholders for the likes of videos, banners and rewarded advertisements. This has become an additional revenue source for FTP gaming platforms. It could be anything, from an ad about how to play rummy or a different FTP game from the studio. The concept of subscription is also not entirely done away with either. FTP models offer exclusive content and benefits on a subscription basis. Besides, many FTP games are partnering with brands and influencers to open up alternative revenue streams.

Playing in a Free World

The popularity of FTP has replaced long-term content creation with short-term monetisation mechanisms, shifting the focus of the industry considerably. However, the long-term profitability of FTP games will rely heavily on the right monetisation strategy. This, among other things, cannot afford to be intrusive on the gaming experience.

As FTP developers understand their target audience more and improve their audience retention, more and more FTP games will influence the world of gaming.