[In this reprinted #altdevblogaday opinion piece, Blitz Games' Tom Gaulton catches up readers on the state of freemium with an overview of the model, its problems, and how those issues are being addressed.]
Like it or not, the freemium gaming model (i.e. games are free and the money is made via in-app purchases) appears to be here to stay. I've seen a lot of concern voiced recently that freemium content is driving down the quality of games, but I don't believe that's necessarily true.
There are problems that need addressing – but let's not throw the baby out with the bathwater.
A brief history of freemium
Take away the freemium model, and you're left with users having to pay for games up front. With traditional disk-based media that worked, the barrier to entry meant that there were relatively few titles on sale so it was possible to get a game noticed given a decent advertising push and by word of mouth – and that meant publishers could afford decent budgets and take a few risks. The business model wasn't perfect, but it sufficed. Innovation wasn't always top priority, but the quality bar was fairly consistent.
Fast forward to the age of downloads, in particular the App Store, and the barrier to entry for developers was suddenly much lower – almost anyone with a computer and a compiler could release a game. Initially this seemed like a good thing, there was much excitement about "indie gaming" and a few notable success stories, but soon the market was flooded and developers began undercutting each other on price in order to get sales.
This process, commonly dubbed "the race to the bottom," now seems to have run its course, with the majority of games now in the $1-2 bracket, and that has warped the general perception of value. Paying $5 for a game may have seemed cheap once but now looks expensive against the backdrop of bargain bucket titles – despite the fact that people will happily fork out that much (and more) for a latte and a sandwich.
As a result it has become incredibly risky to invest in making a high-quality game for the mobile and tablet market. Even if your $5+ game is awesome, the chances of enough people finding it and paying for it are slim. They're more likely to download half a dozen separate dollar titles and conclude that all mobile games are rubbish.
That's where freemium enters the frame. If you can give your game away for free, there's nothing (bar the initial download) to stop people trying it out – sure, the market is still flooded with choice, but you've improved your chances dramatically.
Once you've got people hooked on your game, then you can start billing them for items, and make your money that way instead. And because you've already hooked people in, you can charge them a lot more than the minimum app price that people have come to expect for paid apps. Recently we've seen a few games exploit this system to make large sums of money.
So what's the problem?
Notice I used the word "exploit" in the last sentence? Well, that's the problem with freemium at the moment. Games don't simply draw you in and then ask for a single payment to continue playing; they attempt to sell you a whole plethora of in-game items, often using devious means that encourage addictive behavior and disguise the true cost.
A while back I played a game called Paradise Island
on Android that was a perfect example; you could buy special buildings for your island, but the way you did so involved so many different forms of currency along the way that it wasn't immediately obvious what the cost would be. I once sat down and calculated that the true cost of a single building in their Halloween pack was a staggering $50.
It's this addiction-feeding style of game that I believe has given freemium such a bad name. After all, if you look back to the era when magazine cover-discs were the norm, you realize that freemium has been with us in spirit for decades, even if the buzzword hasn't.
Can the problem be fixed?
I think we're beginning to see light at the end of the tunnel. Some recent games have started to implement less aggressive forms of in-app purchasing – for example, Triple Town
works by limiting the free version to a fixed number of 'turns' per day, and gives you the option to purchase unlimited turns for a fixed fee. It still has option to buy items to essentially cheat your way to victory, but at least you can opt out of that and make a one-off payment. It's a step in the right direction.
Perhaps more importantly though, the Japanese courts have reportedly stepped in regulate the "kompu gacha" mechanic, whereby players pay a small fee to purchase random virtual item (in essence, a lottery), and are encouraged to keep buying them until they've collected a full set to unlock a special item.
It's only one specific mechanic that they're investigating, and it's only the tip of the iceberg, but the case has drawn a lot of attention from the press over the last few days, and looks like it might be the tipping point that wakes regulatory bodies, and players themselves, up to the devious way in which they've been manipulated.
Much as the makers of yogurt products keep telling us there are "bad bacteria" and "good bacteria." I believe there can also be "evil freemium" and "nice freemium." The evil freemium games are built purely to extort money from their players, while nice freemium are good honest fun, that just happens to come in a freemium package.
I doubt we've seen the back of evil freemium just yet, but rather than despair at the state of the freemium market, why not try making your own game freemium – just make sure it's nice freemium.
[This piece was reprinted from #AltDevBlogADay, a shared blog initiative started by @mike_acton devoted to giving game developers of all disciplines a place to motivate each other to write regularly about their personal game development passions.]