"I'm convinced that free-to-play game design has a lot worse of an image than it actually deserves," says Jan Richter, head of design for free-to-play browser developer Bigpoint (Battlestar Galactica Online, pictured).

He titled his GDC Europe session "Why Free-to-Play Game Design is Fucking Awesome." He says that "free-to-play game design is really interesting simply because it's new," and that "the way you earn money, engage players, and have to build your games is not explored territory," which keeps things exciting.

To prove his point, he shared several significant bits of data he's gleaned from his two and a half years at Bigpoint, which he joined after working on the Command and Conquer series and other mainstream packaged games.

1. It's the logical next step for MMOs

You may not think of World of Warcraft as a free-to-play game, but "from a player perspective, it actually is," says Richter.

"You can buy gold [through third parties] and shortcut a lot of the progression system... I'd even say the majority of people are happily doing so."

"It is the superior business model to sell games in a defined market segment: online games that have huge playtimes and a prominent and deep progression system," says Richter. "I'm convinced it's going to be the dominant model for MMOs."

It is not a panacea for the entire business, however. A single player campaign like those you find in Call of Duty "will never monetize over free-to-play," he says. "It's applicable to only games that are extremely viral or have extremely long lifetimes, which excludes most of the console market."

2. The important thing is to engage players on first contact

First contact with your game is where you want to grab the player's attention -- you can't count on them sticking around. The really crucial distinction is that, just like with a regular game, you can't get to the depth super fast, so it's not necessarily about engaging them "when the game mechanics run."

"There's no excuse for teaching people something and not making it fun," says Richter. And free-to-play forces designers to do this, because people can so easily enter -- and exit -- the games. His job is to make sure people stay as long as they can.

"Make the first session as awesome as you can," he says. "From the first five minutes to the first hour, make sure how you provide fun right away -- and provide context and set goals."

3. Milestones are massively important

"Look at what critical milestones they have to pass to increase the performance of your game," says Richter.

As a hypothetical, he showed off a funnel that starts with 3 million potential players driven to the game's website in a month. At the bottom of the funnel are the players who stay -- and pay -- for a second month. Starting with 3 million, 3,000 is a realistic number.

"How you can use that" funnel, Richter says, "to make a better design, is to look at the points you want to get users across, and how you can improve that individual aspect of your game."

The milestones he looked at are registration, becoming an active player, paying for content, and then staying for a second month and paying once again.

To convince someone to register, he says, you might "give them a new giant spaceship just for registering their email address." This philosophy works across all of the choke points: "having critical rewards for people and providing new gameplay for people as they progress" is key to getting people to the bottom of the funnel.

4. There's no morality problem with free-to-play

There's a lot of talk around concepts like whales, and people who get addicted to free-to-play games, Richter admits.

"That leads to a suspicion of a moral problem of getting people ruined by free-to-play games," he says. But that's the wrong way to look at things.

"If you really think about it, it's actually not about ruining people who can't let go of games; it's that they have such high lifetimes you're actually providing people with a hobby more than a game experience. You need to build games that are so long, stretched, and have so much content and multiplayer aspects, that it's actually part of their everyday life," he says.

Compare it to hobbies like home theater or cycling, and you'll find those have their "whales," too. "Everybody has somebody like that in the people they know," Richter says.

For example, he was at a bicycle shop and noticed the most expensive wheel was 2000 euros. "There are people out there who are happy to spend 10 or 20k euros on a hobby, and you would be stupid if you were a bike shop owner, and you didn't sell people bikes for 10 grand if they ask for them," he says.

5. "You have to build games that people will enjoy for months and months and months"

The big issue is retaining users, not monetizing them, argues Richter.

Richter shared an equation -- User acquisition cost < Conversion x ARPPU x Lifetime x Virality. This equation represents the "magic line you have to cross for your game to really become huge," he says. (Note: ARPPU means "average revenue per paying user".)

The issue isn’t the equation itself as much as the four data points in it -- those are what you have to scrutinize to see where your game fails to hit its potential. "If you break it down in those four pieces, it really helps to identify which aspect of your game you really should work on," he says.

Since hardcore games have poor virality, you need to concentrate on other aspects, and you need a long lifetime to make the equation work -- "a hobby someone will play for the next six months, at least," says Richter.

The good news is that "once you cross that line, marketing spending gets profitable," he says. "And once you get there, they can spend hundreds of thousands, and bring in millions of users."

The solution, in other words, is building games players want to stick with. Monetizing users is not the challenge; retention is.

Gamasutra is in Cologne, Germany this week covering GDC Europe and Gamescom. For more coverage, visit our official event page. (UBM TechWeb is parent to both Gamasutra and GDC events.)