Abusive Pricing Practices in F2P Social Games

Abusive pricing practices in F2P market and their analog in the Atari generation of console gaming, and why this market will collapse if this is not addressed.

Setting The Stage

Recently during some down time at work, I hopped on Facebook to catch up with some old friends and saw an advertisement for a new game (I am not going to name the game or company here, as I think that would be rather unethical). Immediately my eyes lit up with excitement at seeing something new, so I clicked my way in and started playing. Smooth graphics, quirky fun gameplay, a set of fairly well balanced mechanics; I was itching to show my support. That is, I was right up until I looked at the price tag.

Now, I am not cheap, nor am I unaware of the significant development costs of a creating a game, but when I saw these prices my blood pressure went up and I felt the need to reach out and slap a marketing person somewhere.  

What would raise that kind of reaction, you might ask? Well, here was their price break down. 

Currency- Cost   -    Ratio    -   Price per Unit

2100 $200 10.5:1 0.105
1000 $100 10.0:1 0.100
475 $50 9.5:1 0.095
182 $20 9.1:1 0.091
90 $10 9.0:1 0.090
40 $5 8.0:1 0.080

 Before we get into the nuts and bolts of why this is abusive, let's start by saying that there are certain marketing strategies out there, such as "Door-In-The-Face" technique, where you make a large offer, knowing that it will be refused in order to secure acceptance of a smaller offer. So, even if we assume that the top two are designed to be refused, that still leaves 4 options ranging from the price of a AAA title to the price of a McDonalds Combo(not super-sized... that's extra :P).

The price alone, though, is not what makes these abusive. After all, price is just a measure of value. A high price for a high value is not abusive, nor is a low price for a low value. What makes these abusive is that it is a high price for a low value, couched with psychological prompts that are designed nickle and dime the consumers. To see how that is being applied though, we have to dig a bit deeper into the game.

The Con 

In order to get to the value, we need to look at the underlying mechanics of the game itself, so that we can find a value on which we can make a comparison. For this to make sense, I am differentiating between NAPT(Non-Active Play Time) and APT(Active Play Time). NAPT is time when the player's presence is not required within the game, but things keep happening regardless. In social games, these are things like build times, crop growth times, research times, or any other timer mechanic where the players presence is not actively needed in order for a task to get accomplished. Active play time is just the opposite; time where the player must actively be sitting at the computer, logged in, and clicking buttons in order for something to happen. 

Most social games use a combination of these two, such as Farmville's planting and harvesting (APT) and their growth cycles (NAPT). Most social games also have some form of energy meter that acts as a bandwidth throttle for APT. Over time, the meter fills up, but every action in the game drains it. The game I am considering for this article is no different. The segment of the game that is APT based has a guage that drains over time. However, in contrast to other games, this guage does not refill on its own, but is instead recharged through in game items which are in turn produced by in game resources that are based on the NAPT mechanic. These resources regenerate at a fixed rate up to the cap of the building and then must be 'gathered' by the player before they are usable. The items needed to 'recharge' your APT guage scale with your level, so as your level increases, so does the cost of the item in terms of resources as well as your resource production. In the end, it stays fairly static. To keep the math reasonable, I am going to be basing the numbers off stats a player should have after roughly one week of casual play. 

The in game resources come in two flavors, A & B, each of which are acquired at slightly different rates, and both of which are required for any in game purchases. 

Again, to protect the identity of the game I will be using letter designations for the resources. I am not here to bad mouth any one company. 

A level 2 A-Facility  produces 300 of resource A every 2 hrs, or, 150/hr. That equates to  1 A every 24 seconds. 
A level 2 B-Facility produces 120 of resource B every 2 hours, or 60/hr, which equates to 1 B every 60 seconds. 
To Produce 3 APT regen items (C) costs 140 A,  40 B, & 15 seconds time.  That equates to (24*140)+(40*60)+15= 5775 seconds per stack, or 1925 seconds per C. 
The roughly equivalent item (D) available with the premium currency costs 6 'coins' . We already established above that the in game currency equates to between $.09 - $.12/coin, so D is  ~$.60

1925 seconds ~= $.60 or ~32sec = $.01

This is the value they are placing on NAPT time, $.01 = ~32 seconds. 

But what about active play time? Their APT guage grows with the player level, but at this level, they are roughly 48 points per character in the game, with a maximum of 6 characters, only 3 of which can be active at any given time. Each in game action requires 1 point, and each round lasts 4 seconds. So:

You have 48 Points*4seconds = 192 seconds of APT from full to 0.

1 D = ~$.60 = 192 seconds APT
192/60=$.032/second of APT. 

Since you normally will have 3 characters active at a time, that translates in to $.096/second, or just under a dime for every second that you are actively engaged in combat is you were paying for your APT with premium currency.

Now, not all of your food is purchased through Premium currency. Using the calculations above, with level 2 A-Facilities, and assuming that you have 6 built(the maximum), you are producing 1200 A every 2 hours. If we also assume 6 B-Facilities at 120/2 hrs you are producing 720 every 2/hrs, or 600/360 per hr. (43200/month & 259200/month respectively).

If you put every single bit of that into APT regen items (C), you are looking at 924 C. Split that three ways in a party and you have 308 per character in a 3 character party. At 192 seconds of active combat per character per C, you are able to play:

(((308*192)/60)/60) = 16.42
     hours a month for free APT.  Again, remember that is if you don't do ANYTHING else, no more buildings, upgrades, crafting, purchasing heal potions or anything else. Anything you do beyond that reduces your active play time. That is also assuming that the player logs in every 2 hours like clock work in order to 'gather' the resources. Any inactive time over 2 consecutive hours reduces their APT.
 Out of 720 hours in a month, you get 16.42 for free(Active Playtime).

If you wanted to purchase the play time for the remainder of the month, at $.096/second, it would cost you roughly $4147.20. Of course, no one is claiming that anyone is going to play 24/7, but then again, if they don't log in every two hours, their APT diminishes. If they build anything, their APT diminishes. If they upgrade their character, their APT diminishes.  

The Comparison

The average social casual gamer spends about 85 minutes a week on their game of choice, with and average per user cost of $60. Granted, this does not reflect the actual spending habits because 90% of the revenue comes from players spending over $100/month on a game. This works out to a rough cost of about $.015/second for the average player, $.85/min, or $5.10/hour. 

Let's contrast that with other forms of Game media entertainment. The AAA console title is going to have somewhere between 20-80 hours of gameplay, for a fairly static price of about $60 at first release. That works out to roughly between $3.33 - $1.33 per hour of gameplay, not counting any replay value the games might have nor the fact that once you have beaten the game, you can sell it or trade it in at a second hand store to recoup some of that expenditure. 

For a MMO with subscription plan, you might pay $15/month for unlimited play with all the bells and whistles. For the sake of giving the casual game market a fair shake, I will even assume that you had to pay the $60 upfront for the game, despite the fact that many are now offering limited F2P options. In their case, you pay $60 for the game which usually comes with 30 days premium subscription included. This works out to about $.12/hr of gameplay, with a continuing cost of $.048/hr of game play on following months. Considering that many MMO's are now offering a F2P without an initial purchase of the core game, their total cost drops tremendously. 

What does it all mean? And what the hell is all of this about Atari?

This article is not about how much we charge customers, though. It is not even about price per hour of game play. It is about the VALUE that we give our customers, and what that value means to us as an industry. 

For those of us old enough to have been either in the industry or a consumer at the time of the Atari console generation, you probably can recall when the bubble burst on the game industry. While there were several issue involved when that crash, one of the major causes was that there was a glut of garbage on the market selling at the same price point as the higher quality games. Games were being produced cheaply and with minimal resources and then being sold at premium prices.

This is a situation we are seeing again. There is no essential difference beyond the platform and marketing strategy, and eventually, just like they did in '83, consumers will get wise and stop paying abusive prices for low value games. They say that those who do not learn from history are doomed to repeat it, and it is quite apparent that publishers have not learned their history yet. 

As unemployment continues unabated and economic uncertainty continues around the globe, people are going to be on a crusade to tighten their belts and make every penny in their pocket stretch even further. The first thing that gets cut when belts tighten a notch is often the entertainment budget. However, given the glut of entertainment resources available, people have a much wider choice of which entertainment options to cut. The first ones out the door will be those with the lowest perceived value. 

If game publishers/developers do not want to be in the part of the budget that gets cut then they need to stop the abusive pricing packages and abusive marketing schemes and start offering their players real value when they ask for their hard earned money. Charging someone just under minimum wage to play your game is abusive in the extreme, and it will come back to bite you. 


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