Free-to-play games are one of the biggest money-makers in the world of entertainment. A TechCrunch report on free-to-play game revenues confirms that the titles made $87.7 billion in 2018. Gaming as a whole made $101 billion last year, which means that they made up the majority of gaming revenue. So lucrative are free-to-play titles that it has some asking whether the free-to-play model could topple premium titles.
How Are Free-to-Play Games Monetized?
The free-to-play game industry is large and has all kinds of titles, from open-world RPGs that have players completing quests, to action-packed games where you shoot waves of enemies. However, the way that free-to-play games are monetized is mostly the same.
The Verge says that Fortnite made $2.4 billion in 2018, making it the most successful free-to-play game of the year. The battle royale game, which has players battling it out by themselves or in groups to be the last one standing, is monetized using the sale of cosmetics. Players can shell out to unlock skins for their character, their weapons and their tools (such as their glider) and dances. There's also the Battle Pass which gives players better rewards. While there is no gameplay boost from these cosmetics, the way they look is enough to get people spending.
So as to avoid angering players, most free-to-play games only sell cosmetic items for real money. However, there are a few that sell gameplay-affecting items. Mobile game Fire Emblem Heroes has made $400 million worldwide and that game, with its "gacha" business model that allows players to pay for character unlocks, could be considered pay-to-win. Pay-to-win is the idea that players can pay for a gameplay advantage, giving them better and more powerful items than their opponents. This model is controversial and players prefer the idea that everyone has a level playing field and that you only win or lose based on your skill at the game, which is why most paid aspects of free-to-play games are cosmetic only.
Why Are Free-to-Play Games So Popular?
Hundreds of millions of people around the world enjoy free-to-play games and the biggest reason for their popularity is that the players can try before they buy. With free-to-play games, players haven't invested any money to play which makes the stakes quite low. If they don't like the game, then they can easily uninstall it and choose a different one instead.
This business model has been around for years and we've seen it used in other entertainment industries many times before. Many Betway slots have free spin rewards that allow you to spend a small amount of money to try out a slot game before you decide if you like it. To play a slot game like Mega Moolah or Immortal Romance, players only need to deposit some money to get started and with the choice of 400 games, they can hop from game to game to find one that suits them and put that deposit to good use. This model has also been used by many mobile games which may offer full, premium versions but still offer "lite" versions that offer fewer levels but allow players to see if they enjoy the gameplay. Nintendo mobile game Super Mario Run worked similar to this and was described as "free to start" - it let players access some features but they'd need to pay full price to get the full package.
This is really effective for game developers launching new IP. While free-to-play games like Civilization and X-COM: Terror from the Deep may be part of established franchises (players will naturally gravitate towards a new title from a developer they know, like and trust), new IPs don't have that same support. Being free-to-play lets players take a look at the new series and see whether they should become a fan or not.
How is the Games Industry Adapting?
The games industry knows that the free-to-play business model is hugely successful and it's why so many developers of premium games have been working hard to adapt.
VentureBeat provides details on the new Apple Arcade subscription service which, for a monthly fee, will allow players to gain access to a huge library of premium games. While Apple gets recurring subscription revenue, it's also great for developers of premium games who have said that their titles just can't compete against free-to-play: it is difficult to win players over when the game costs money to play and so their games have difficulty in making money.
Developers have also begun to use more free-to-play mechanics in their games, to make more money and to allow them to keep updating and adding to their titles (to compete with free-to-play). PlayerUnknown's Battlegrounds, a game that costs money to play, charges players money to purchase crates of cosmetic loot. Multiplayer shooter Overwatch also features loot boxes that players can pay to access.
Developers are working hard to prevent free-to-play from totally taking over so that they can keep making deep, narrative games at a premium price. While it has yet to be seen how these efforts have paid off (Apple Arcade has yet to launch), it may not be so easy to topple the tower that free-to-play games have built.
