Why Free to Play is the Future of Gaming….

Ok, here is the title of the post I wanted to use…I know, way too long…

“Consumers Always Win Eventually, or Why Free to Play is the Future of Gaming….”

I remember when I was a kid and I started buying albums. It was a long time ago, and I don’t remember how much they cost exactly, but it was a lot, I think it was $9 or $10. More than I wanted to spend that was for sure. And even at 12 or 13 years old I remember thinking to myself, “why do I have to buy 10 or 12 songs on this entire album for $10 bucks, when I only want that one song that I love (and maybe a second one). They are making me buy all this other stuff I don’t want to jack up the price”. Well maybe the world wasn’t as cynical as I thought it was (or was it?), and there were some significant limitations on technology and costs. But still, it wasn’t what I wanted. I wanted what I wanted. I was willing to pay for it. But I didn’t want to pay for what I didn’t want.

Well along came electronic distribution, flash memory, state of the art consumer electronics design, and a determined Steve Jobs, and presto, the iPod and iTunes. Consumers got what they wanted. They paid for it. But they did not have to pay for what they didn’t want.

Well, the same thing is happening in gaming.

The massive disruption and transformation going on in gaming today is not about “content going digital”. It is not about being able to get a game without driving to the store, or even that fact that you can play the game with the device you carry in your pocket. True, those are all benefits, they are improvements and they are important. But what is happening in gaming is much bigger than those changes. What is happening is that the consumers are winning. They are getting what they want. They are paying for what they want when they know they want it. That is why the market is expanding. That is why so many more people (older, younger, male, female, essentially the entire world now) play so many more games than ever before.

It is simply no longer (except for some hold outs) about having to pay $60 first up front, and then seeing if you like the game beyond the first level.

I know some people still think it is because of the social graph or the convenience of the mobile handset in your pocket on the train. And for a long time that was the prevailing wisdom. But think about this.

What if the Facebook games model only supported paid games? Like say a casual game site in 2006. Say $5 or $10 per game. Do you think Zynga would be public now? Would Facebook be public? Likely neither, as Facebook growth early on and mid way was heavily driven by game adoption. And that all happened because the Free to Play model allowed for massive adoption (and the social graph juiced it). And in addition, because Zynga and others exercised the Free to Play model (not just the free model) they could spend on advertising which also primarily benefited Facebook. So you could easily say the Free to Play game model has had a ton do with Facebook being what it is today.

Similar thought process in mobile. If ALL mobile games were paid, would mobile gaming have taken off as it has now. Just look back to the “mobile gaming 1.0 era” of 2002-07, when Jamdat was king. All the games were paid with the operators as the gatekeeper. Did we see massive adoption? No. But things are very different now. There is a ton of free and Free to Play content on mobile. (Side note, I know a lot of mobile gaming has been enabled by the quality of the iPhone and other smartphones, e.g. the screen, network connection, etc. But I still believe that if all games were paid we would be back significantly)

There is no doubt that being free alone is not a solution for developers. And that wide spread distribution without generating meaningful revenues is not useful for anyone or the industry as a whole. But smart Free to Play designers, developers, and marketers are finding they can have their cake and eat it too. They can have wide spread adoption on social, mobile, and some emerging web and PC client (World of Tanks anyone) businesses and make VERY good revenues from the paying customers.

What I am talking about is not coming, it is here now. Social was born Free to Play and continues to be. Mobile has now firmly transitioned into Free to Play as the primary revenue model. In Asia there is no other model of significance really. In the west there is a growing trend of Free to Play PC client games (like World of Tanks, League of Legends, and others). And many web casual gaming sites are beginning to make the transition (e.g. Kongregate and others) as well.

But there is one major holdout, consoles. Stay tuned, it will be interesting.

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