Do we need “F2P” really?

It seems that many bloggers have been inspired to write something about the business models used by MMOs in the wake of the announcement that SWTOR will be changing their model. I have been a bit inspired by that as well. As the title is a bit ambiguous on purpose, what I mean here is the acronym “F2P” or the phrase “free-to-play” – not whatever business model you may refer to with this acronym.

As Syp mentions in his blog post, there is really a whole bunch of business model variations that somehow and by someone are referred to as “F2P”. Sometimes it may even mean different things when the same person uses it, depending on context. It is a powerful and catchy phrase and acronym, so it tends to get used whenever it suits the purpose – not to accurately convey a message. What is hidden behind the acronym are really a number of different changes.

Business model changes

In recent years Western MMO companies started to move away from the pure subscription model that most of them used. Not only was it a similar subscription model, but pretty much everyone has the same subscription fee, similar costs to get the game in the first place (box cost) and similar approach to get new significant content updates (paid for expansions). This was regardless of target demographic and what was actually provided as part of the deal.

As the market has changed with more MMOs competing with each other as well as shifting economic realities for players as well as companies, more flexible models have been needed. There was a bit of experimentation with in-game ads in a few games, but that does not seem to have worked out well. Other approaches have worked out better.

Part of the problem for the companies has been to attract customers to try out their game and then keep them as customers – or get them to return as customers again. Some of the changes we have seen in recent years most likely have been to address these kind of issues:

1. Reduce or eliminate any hurdles to make people try a game
2. Be flexible with the amount of money people are charged at different times – making it easier financially to keep various types of customers
3. Provide visibility into what people get for what they pay – can make it easier to keep customers, as well as encourage additional spending

The changes in business models addresses the financial aspects of these issues, but we have also seen seen some functional changes as well, which for example include:

1. Digital downloads, quicker installations and staged installations
2. Web shops as well as in-game shops
3. More frequent content updates

Note that I have not used any references to “free” or “free-to-play” here. This applies to all MMOs really. The Secret World has announced they are doing monthly content releases, called issues. By doing so they provide a pretty good visibility and feedback to people what they get when they pay their monthly fee.

The “free” words are just used in some specific applications of the more general approaches here, typically:

1. To attract new customers
2. To keep existing customers

Categorization of business model elements

In order to define a more general description of the different business models I think one approach would be to split it up into

1. Start cost
2. Mandatory on-going cost
3. Optional on-going cost
4. Optional one-time costs (not micro-transaction type costs)

The old subscription-only model would with some simplification and with US prices have the values “$50, $15, $0, $50 x N”. The first value and the fourth value typically changed over time, with the first one being a box price and the fourth one being paid for expansions, for example. The issue has been here that these two values were the only ones that the companies with this model could adjust to adapt to market conditions.

What has happened now is that companies have reached a point where it is possible to adjust all four values in different ways in the market. Basically all the different business models can be described this way.

The tricky part here though is that the definitions for each of these would still be fuzzy. For example, a mandatory on-going cost would include a subscription fee, but could potentially include other costs that a certain player type in practice would have to spend in the game in order to enjoy it. Examples could be “rental fees” that a game might impose for certain features or various boosts in order to keep the game “fun” as opposed to “grindy”.

It also lacks some catchy phrases or acronyms to describe them. The start cost factor could perhaps work with “F2T” and “B2T” (free to try, buy to try) or something similar. But for the others I have nothing now. You really must have something simple here, otherwise it will not get used.

We do need something better than “F2P”. I am not sure we are going to get it though.