On the 26th of September the OFT published its interim report into Children's Online Games [pdf]. The consultation paper is well worth reading, and contains a number of commonsense proposals that the industry would be crazy not to adopt. That this event was largely unremarked by the gaming press was, to my mind, a big wasted opportunity by the industry to engage with the general public's concerns regarding games for kids, and monetization in games, in general.
I've been working in the mobile games space for around a year now, and like everyone else I've been wrestling with the problem of monetizing games and users. Like the majority of studios we want to make fun games that players enjoy and turn a healthy profit into the bargain. One avenue we've explored, and continue to explore, is the F2P Model with it's siren call of easy(ish) user acquisition, and potentially vast profits (See King, Supercell et al).
Like all business trends and fads F2P has attracted a vast array of acronyms, "monetization consultants", evangelists, preachers and cranks. It is extremely difficult to seperate the wheat from the chaff, but the principle of F2P is simple enough to understand.
Allow all players to play for free, and attempt to convert a small proportion to become paying users by offering them additional content or "value", typically in the form of coin packs that can be used to pay for non-consumables (ie avatars, vehicles) or consumables (ie powerups, spells etc).
So if I can persuade 1 million people to play the game every month, and further persuade 2% (a typical conversion rate) to spend £1, I can make £20,000 per month. This simple sum should demonstrate the kind of numbers you need to turn a really good profit. You want to either have millions of players, or persuade your Paying Users to spend A LOT more than £1, or even better - both.
It is here both ethics and casino capitalism raise their head. The accusation that is most often flung at F2P games is that they are no more than glorified fruit machines, and it has to be said where there's smoke there's fire.
F2P Dirty Secrets
One thing that does the F2P industry no favours is the bracketing of its paying players using the casino terminology of Minnows, Dolphins and Whales - effectively admitting, or at least implying, that the players are punters and that these are not games of skill and chance but nothing more than elaborately designed roulette wheels. So my first plea would be to drop this terminology from our vocabulary.
Secondly, as the OFT points out, many of these games are not, in fact - free. Many contain gates and levels that are effectively impassable without spending money. So it's an outright lie to describe a game as "free". Sounds dodgy, doesn't it?
Worst of all, and in my view, the most dangerous and likely to get the industry into big trouble with regulators, is the use of game mechanics to encourage so-called whales to spend vast amounts of money in game. The cuddly term whale makes us think of the Texan Oil Baron, but the reality is more likely to be a player who may have become addicted to the game and is spending more than they want, made easier by the inclusion of indefensible items like £69.99 coin packs. [see here] [see here] [see here]
I don't often hear people saying they felt the got "value" from paying money in Candy Crush the common refrain is "yeah it forced me into it", "can't believe I wasted a fiver" etc etc. These are straws in the wind.
Duty of care
The F2P industry is a product of the App Stores that spawned it. The Free price point created a race to the bottom, coupled with a lack of alternative ways of monetizing meant that the F2P business model was inevitable, and that the sharks were happy to exploit the whales or more correctly addicts.
Despite what the evangelists say I struggle to believe any player really wants to spend more than £20 per month on a casual game and still feels good about the purchase next morning. Given a £10 per month subscription to Spotify or Netflix offers a huge range of content a £30 gem pack looks like nothing other than a huge rip off.
For me the future must be in offering players tiered subscription services. Allowing players the ability to easily mange their monthly spend, and game makers to turn an ethical profit. In the meantime ethical game companies should make it easy for players to manage their spending and to implement a monthly ceiling that players can't breach, maybe around £50. They should remind themselves that they have a duty of care to their players and possibly that "whale" spending £200 per month is deeply unhappy.
If things continue as they are, I fear the many F2P sharks will poison the waters for everyone else, leading to one almighty backlash and much tougher regulation (deservedly so). F2P games will find themselves regulated up to the hilt and be categorized in the same bracket as bingo and poker games.
Which is why the industry must not turn a blind eye to the public's concern, and embrace and implement the guidance contained in the the OFT report. If not, the perception will become that, no matter how carefully curated, the app store is nothing more than a ghetto for games that provide cheap thrills while emptying the wallet.
[Originally posted on 10/10/13 on my blog here]