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Predictions

by Michael Ho


Filed Under:
business models, economics, free, video games

Companies:
ea



Freemium Models For Video Games -- Coming To Annoy At A PC Near You?

from the trade-you-virtual-guns-for-virtual-butter dept

As we've noted before, Electronic Arts has already tested giving away games for free and selling virtual items to players for small fees. The business model works (in South Korea, at least) -- and EA's CEO is looking to expand this 'freemium' model to more and more games. According to the New York Times, EA CEO John Riccitiello is ramping up the strategy with the release of 'Battlefront Heroes' which will introduce ads and virtual goods to subsidize the free version of this online game. And Riccitiello is quoted, saying "I've always envied the movie industry when they put a film out in the cinema, then they go to retail with a different business model and then to pay television and then free TV. They have the same content reaching different audiences with different models, and we could never figure out a way to do that. Now with higher broadband penetration, we can use the technology to reach a broader audience."

Hopefully, Riccitiello isn't too envious of the movie industry, and EA has a longer term view for the future of its game production. An easy trap to fall into would be for EA to try to charge for every little thing, hindering the enjoyment of video games with annoying reminders to buy virtual ammo. On the other hand, EA could remember to treat gamers well and charge for its games in way that keeps players happy -- but if 40% margins are the goal, the temptation to squeeze gamers for every microtransaction may prevent EA from playing nicely.

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  • identicon
    Anonymous Coward, 22 Jan 2008 @ 1:48am

    I'd rather buy a game for 50+ $ and be done with it, I will not get into anygame that does this - Its BS and a dis-service. Just another way for big corps to separate us from our $$. Get Bent EA

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    • icon
      JS Beckerist (profile), 22 Jan 2008 @ 10:36am

      As a casual gamer

      As a casual gamer I disagree. I would much rather pay NOTHING to experience a game, then maybe pay a little more if I stick with it. All too often I buy a game for $60 to play it twice and move on... If I found something I'd stick with (ahem HALO) then I'd definitely be interested in paying a little more for a bigger experience.

      I have no problem with this model at all.

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  • identicon
    Shemnon Shadowalker, 22 Jan 2008 @ 3:24am

    EA's anouncement

    So wait, EA wants to sell virtual goods for their online games, but they don't want players selling virtual items?

    I have played many online games, and every single one has a EULA tat prohibits the end user from selling its virtual goods. There have been many cases of companies actively banning players, and accounts, getting auctions at sites like ebay and other auction sites canceled.

    And on top of it all, they plan to use ad revenue to difer the costs? How invasive will the marketing be? Many games have found ways to do this from having commercial buildings at key locations within a city, billboards along roadsd,etc. and while these are annoying at times, we by and large accept this.

    However how much longer will it be before playing online games turns into tv style, Hold on a moment while we take you to commercial?

    Game makers need to continue to push boundaries, and explore new options. But we as consumers should not be so eager to buy into this free software that is inferior to a game experience if we had bought the game.

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    • identicon
      fog, 22 Jan 2008 @ 3:38am

      Re: EA's anouncement

      Actually, EA already do in-game advertising with BF2142. Though from what I've heard/seen, not in AU/NZ. (bandwidth??)
      The ads only appear on billboards. I would assume, it will be the same for BFH.
      Who has time to look at an ad during a game anyway. Maybe it's a more subliminal thing....

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  • identicon
    Jack Sombra, 22 Jan 2008 @ 3:38am

    Play Nice? EA? ROFLMAO

    Ultima Online is proof that EA will NOT play nice with the players.

    You pay to buy the game ($20 - $40)
    You pay to play ($9.99 - $12.99 per month)
    You pay to get "expansions" (Quotes because those expansions or anniversary packs many times contain little to not extra content beyond some useless eye candy at best or at worst some game unbalancing item that you have to have to stay competitive) ($20 - $40)
    You pay to get items that were previously given for pre ordering these expansions and that people were "promised" you never become available again ($9.99)
    You pay for extra character slot ($19.99)
    You pay for extra storage ($19.99)
    You pay name changes ($19.99)
    You pay for sex changes (don't ask) ($19.99)
    You pay for server transfers ($19.99)
    You pay for items in game ($9.99)
    You pay....
    You pay........
    You pay..............


    Personally I will NEVER touch an EA game again, especially if they will have any way to charge more than the initial purchase price

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    • identicon
      Anonymous jerk, 22 Jan 2008 @ 3:59am

      Re: Play Nice? EA? ROFLMAO

      Quite similar to Second Life, albeit Second Life is much more of a virtual world and much less of a game. The premise is the same, though. Make a consumer pay for every little item. The difference in Second Life, however, is that you can re-sell your 'stuff' in-game, and on eBay (with limited success, you still occasionally get flack from Linden Labs, operators of the game, for those of you who weren't aware :)

      I played Second Life for a long time. I built some stuff, and then the novelty wore off. After only about 2 months. I keep my store active but rarely go in-game unless someone needs tech support. My main reason for abandoning the game was the cost. It was boring to do anything in-game that was free, and I didn't feel like turning my hard-earned $ into L$ just to play some virtual game that has nothing to do with my real, flesh and blood, life.

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    • identicon
      Anonymous Coward, 22 Jan 2008 @ 4:13am

      Re: Play Nice? EA? ROFLMAO

      That seems mostly legitimate. Stop complaining about being a stinge.

      reply to this | link to this | view in chronology ]

      • identicon
        Grizzly Ironbear, 22 Jan 2008 @ 4:48am

        Re: Re: Play Nice? EA? ROFLMAO

        as for me personally, i tried the pay to play games such as Everquest for example. There you buy the game, and the expansions, and still pay a monthly fee of (now) 15 dollars. now this fee is pulled from your credit card even if you only logged in for an hour for that entire month. even if you didnt log in for that month, you got charged. i failed to see what the 15 dollar fee was for since they dropped servers and merged the rest, and gave little to no tech support either in game, or out. So, i now only buy games that are free to play online, and NO hidden charges for items, armor, guns, etc. we all should do the same to make a stand, to say i will NOT accept this as a game standard.

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  • identicon
    Alfred E. Neuman, 22 Jan 2008 @ 5:08am

    No Thanks

    Pay for ammo ? How many present day armies do this ? Doesn't sound very realistic, but maybe that is what the future holds. For example, I suppose that blackwater has to pay for its own ammo. The volunteer army doesn't seem to be working out, send in the mercs.

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  • identicon
    Just Me, 22 Jan 2008 @ 5:19am

    WoW

    I've found that Blizzard has things fairly well worked out with World of Warcraft.
    I recently stopped playing because (in part) of the $15/mnth fee. After a year of paying that it adds up on you.

    Once you're in though the game itself is "free". There's no in-game costs that translate to real money (like Second Life) and if you want to buy items through third parties then you have more money then sense anyway.
    You can also copy the game for free - I'm not sure how legal this is but there's no copy-protection so they clearly aren't overly concerned about that end.

    They are also making MILLIONS of dollars ($15/mth X over 9 million players).

    They do have great tech support and well-balanced servers, but yes they will charge you for things like server moves (sometimes) but none of those charges are required for game play. My wife and I played together for over a year and payed ONLY the $15/mnth.

    As much as I hate the principle of paying for a game indefinitely I really can't see this model going anywhere soon.

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  • identicon
    tweak, 22 Jan 2008 @ 5:38am

    EQ is a terrible example

    I'm not trying to defend EA or the "freemium" model or anything, but comment #7 is so off-base that I have to respond.
    First off, there is a world of difference between "normal" games, and subscription-based games like Everquest. Yes, you have to buy the game and then pay for expansions. That's not news, and that's not even limited to MMOs- tons of games have optional expansion packs. Granted, EQ puts out an expansion every other month it seems, but they're the extreme.
    Second, they charge you because it is a SUBSCRIPTION- that's how subscriptions work. If you get HBO, you get charged for it every month regardless of whether or not you go. You get charged your monthly gym membership every month even if you don't go. You still have to pay your cell phone bill even if you don't make any calls. You pay the subscription fee in order to have the option of playing the game. As long as you pay, you can play if you want to. When you no longer want to play, you stop paying.
    As for lacking tech suppport and dropping servers, that is simply because Everquest is a dying game. Ever since World of Warcraft, Star Wars Galaxies and Everquest 2 came out (along with a plethora of other similar games), Everquest has been hemmoraging players, and most of the ones left are end-game raiders, with very few new people signing up and leveling characters from the beginning. With fewer players in the game, there is less need for the multitude of servers they had in the game's prime, so they're consolidating. Instead of pulling the plug entirely on the few players that are remaining, they're letting the game die off naturally as the players drift to more modern games instead.
    Warcraft, on the other hand, has a single initial client ($20), one expansion ($20), and the usual monthly fee ($14). But since the game is still growing, there is a lot of support, new servers being brought on line frequently, and new game content introduced regularly. That is what the $15 pays for now, but eventually it will get to the same downhill slide that EQ is in now- it's all a matter of time.

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  • identicon
    Chronno S. Trigger, 22 Jan 2008 @ 5:58am

    this sounds familiar

    Didn't someone already try this with a racing game? I seem to remember a game that they sold for somewhere around $10 but you had to pay for every new car and upgrade in the game. If I remember correctly it flopped the day it came out. Very few people will buy a game like that.

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  • icon
    Killer_Tofu (profile), 22 Jan 2008 @ 6:04am

    EQ / WoW /

    I personally will not play any game that requires a monthly fee. I know I am not the only one like this out there, but in my area I appear to be one of very few (out of quite a few gamers).
    For MMORPGs, you Usually get what you pay for. I have a few friends who play WoW, and whoa do they play. Everquest's nonstop expansions just killed off the whole experience for me. It was the only game I ever paid for monthly, and I was quite young then (early high school). Quit shortly after the 2nd expansion came out. The game only showed me after that, that I made the right decision, as they have brought out at least one expansion per year every year after that.

    Now my friends who own WoW tell me that Blizzard said they will be having an expansion per year. I am happy I never got into that either.

    I play Guild Wars. There are 3 campaigns. You don't have to own any one of them to own one of the others. There is 1 expansion. You can own Any single, two, or all three, of the campaigns to buy the expansion. There are Zero monthly fees. The max level cap hasn't raised every single time a campaign / expansion was brought out. Instead they introduce new skills. It really is a game of skill. And to make life interesting on those who have played for awhile, they made a Hard Mode. I enjoy it, and I can quit for however long I want, come back, and everything is there. I can go to any server now for the most part since it really is all one big server (Start off in American, can travel to European, International, or Asian now as of last patch). It is not quite your average MMORPG. I love it.

    Regarding any game that sells items to people for more real life money, I do not like them. I played Gunbound for a little while. Like two weeks. Was obsessed, it was awesome. A friend and I were completely rocking out at it. But all of a sudden everyone was getting super powerful items because they were just buying them. Sorry to say I have more sense than money and refuse to start buying a bunch of additional items.

    I prefer my games be about skill, not about who can give the game makers more money.
    Now I pretty much stear clear of not only games with monthly fees, but games where people get items in exchange for money.

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  • identicon
    Tauren Warrior, 22 Jan 2008 @ 6:30am

    The New Way of On Line Gaming

    It will all depend on the quality of the game. If it is a great game and attracts a lot of players, many will pay for anything. If the game play is weak and the game buggy ... people will try it, then leave, and won't buy anything.

    World of Warcraft set a new standard, and aside from what some players are saying that the cost is only the client and the monthly fee, many external businesses grew up selling WoW gold and levelling for high fees. These weren't small sums and maximum levelling could cost $750 while 100 in game gold could cost $30. Payment via Paypal.

    EA probaly sees that and is trying to cash in on the these huge amounts themselves rather than let outside groups get the money.

    People are willing to pay ... and considering how deep some people get into games like WoW, spending $100 is peanuts; it's the same as a night out at a sports event. Some people play the game on and off for years and saving days of grinding in the game to get something for what they consider a minimal cost is just a time saver trade off for them. Yet that is cheap for some who would have to spend $2,000 a year on something like hockey equipment. It is a way they spend their leisure time and they will pay a lot for the extras for it. If you can't afford it, grind the hard way.

    There are now racing simulator games with teams that only accept experienced players that are so involved they have formed racing clubs. In some of these games, you can pay hundreds extra for better tires on your car, and the like.

    This is the way it will be with on line games in the future. All other games will be tame for this market.

    PS: Nine million people waiting for Warhammer.

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  • identicon
    Time Management, 22 Jan 2008 @ 7:00am

    To Killer_Tofu ... it's not skill.

    To Kiler _Tofu ...

    "I prefer my games be about skill" ... don't equate skill with grinding in a game.

    If you spent weeks playing the game trying to get a super virtual item, and then someone else buys it and is the same as you instantly ... who is the better. You who spent endless hours at a worthless pursuit or the guy who saved his time and spent a pittance. It has nothing to do with skill ... just time saving.

    I get someone to cut the grass at my place ... not worth my time to do it. If I play a game, buying items just saves time.

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  • identicon
    Greg, 22 Jan 2008 @ 7:05am

    It's EA - you just know this is going to be a horrible cashgrab.

    Not to mention they're basically ripping off the visual style Team Fortress 2.

    @11: Sony was rumored to be doing that for the upcoming PS3 Gran Turismo game, but I'm pretty sure they ditched the idea a while ago. You could be thinking of something else entirely, though, and I wouldn't be shocked if someone had tried it, and it did tank.

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  • identicon
    Overcast, 22 Jan 2008 @ 7:23am

    It might work to a degree... But I'm not sure. A MMO is worth a monthly fee, if it's good.

    Something like Battlefield - well, it would work - say, if they charged you for extra maps, etc - but if they go too far, wanting to charge people for 'basics' to just play the game - well, there's no sense in changing the way they sell them now.

    But - it could work..

    Charge a bit for a 'online play' pack, and then a bit for a 'maps pack', and perhaps a bit more for some other add-ons, etc.

    In the end; however, if it ends up getting to be much more cost of out my pocket, I'll just skip the game. I won't spend more just because it's a 'little here and a little there'.

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  • identicon
    Fraust, 22 Jan 2008 @ 7:28am

    Pay to play?

    After experiencing the decline in quality of the Need for Speed Underground Series from version 1 (Awesome) to version 2 (the game play sucked) and Need for Speed Most Wanted (Aweful), I'm not anxious to play any EA games. I certainly won't be buying a game then paying to play it online. Not into WoW or any other game that requires payment to play online.

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  • identicon
    Me, 22 Jan 2008 @ 8:00am

    oh my lol

    well hes anyone downloaded (bought) a game from EA lately thought the EA link or whtever it is called. Now they are charging fees for holding the game for you or wtever. i think you get 6 months or something. once i saw that all respect just kinda disapeared for EA. Just because of that i will never ever do any Online play to play or any other kinda of nonsense again. so i payed 50$ for BF 2142 and now i dont have it anymore cuz they decided that they only gonna hold it for 6 month. I really dont get that kinda thing i payed freakin 50 $ for your game and now i have to spend something similar just to get it back. only gonna buy games at bestbuy a hard dvd copy! or Steam they dont seem to do things like that yet...

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  • identicon
    seeblank is annoyed with mass marketing, 22 Jan 2008 @ 8:17am

    err, are f#$%*ing kidding me?

    I don't buy games to buy more stuff. i don't watch tv to watch advertisers tell me i'm fat and need thier miracle juice-rub-lotion-pill-juice-drink-shake to make me a millionaire in their pyramid scheme.
    I used to be a game developer, and it was a much more fun job before too many suits tried to squeeze everyone and everything for their money. As soon as I saw advertisements inside my game environment, I stopped playing them. I stopped playing WoW because after I spent my $50+, I had to pay a monthly. And now, I may be required to pay more for neat-o items in a game, that while may be given to me "freely" just chaps my hide. It's a virtual environment, keep it that way.
    as global markets are dropping like rocks because our economy is already in the crapper, and being a single dad, who is pretty much un-employed, and becoming more un-employable as each publicly traded share gets sold because of a piss-poor economy, I wonder why the greedy are so needy.
    give it up EA. You used to have some quality, but now, it's just ridiculous how you exploit the world around you, and I am not going into what it was like to work for you as a company, life-suckin vampires. I will keep your mitts out of my wallet by not purchasing your products.
    At least that is one decision you cannot make for me.

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  • identicon
    Dan, 22 Jan 2008 @ 8:23am

    Depends on how they do it

    This idea can work wonderfully. It just depends on how its done. Yes if you start charging people for things that they need to enjoy the game, then its just another excuse to rip people off. But it if all gameplay functions and areas are accessible without purchasing any addition content. Then its very possible the game will be a success.
    Take MapleStory for example. Anyone can download the game, create a character, get any skill, go anywhere, and do anything that people who pay for extra content can do. Only differences are the free character hairstyles and clothing are more generic and common. Want a new awesome look? Pay a little money. Want to shout out to everyone on the server. Pay a little money. Want a cool looking weapon (only changes look of in-game weapon, doesn't help damage or anything)... you get the idea. Don't want to pay a dime to play the game and do everything else can do, well.. you don't have to.
    You might think no one could make money of this, but they do. They make alot. People will pay a few bucks to look awesome. And kudos to Nexon for not taking away from the gameplay or forcing purchasing extra items on anyone.

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  • icon
    Killer_Tofu (profile), 22 Jan 2008 @ 8:26am

    Re Time Management

    Not necessarily.
    A lot of times playing your character more will make you a better player with that character.
    Now I know that there are exceptions in both directions, that some people just can't learn, and that some people are just plain awesome. But in most cases people tend to get better as they work towards something because of the trials and tribulations they go through to get there.

    Mowing your grass, I am sure you have mowed your grass before and know how. So paying somebody else could be considered a time saver.

    Playing a game is a little different, as there are many levels of skill.
    That would be like somebody buying an EQ character at max level. Would have 0 skill playing the game. Somebody buying a maxed out Call of Duty 4 account that has all weapons unlocked already. Doesn't mean they have awesome skills with the game. They probably won't.

    I find the mowing the grass analogy to be flawed for that reason.
    In the case of Guild Wars and other MMORPGs you NEED to play a lot to be good. You could buy every item in the game, it won't make you a good player by ANY means.
    So its not just time management. Or in the words of Kevin Spacey when he played Lex Luther in the Superman Returns move, "WRONGGGGGGG!!!!!!!!!"
    And if you played the MMOs to a high level or end game areas, you could easily tell. Even many people who have played tons still aren't good.
    So playtime does not directly equal skill, and buying items definitely shows that you didn't really earn it. You just had money and the owners will reward you for handing it over to them.

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  • identicon
    Anonymous Coward, 22 Jan 2008 @ 8:53am

    EA should worry about putting games out that are actually stable and have great game play, before they worry about how to charge more for them. They seem to get lost when they aren't repackaging NHL96 for the 2k years.

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  • identicon
    Make Money to take money, 22 Jan 2008 @ 9:00am

    E-employed

    Alright lets say that EA does make a game where yu have to pay for things they also need to make a way for you to make virtual money at a virtual work place.... that sounds reasonable, or become a virtual theif... So in VR sense you should have to work in order to get cash, what about virtual drugs... I bet VR pot is Bomb!!!!

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  • identicon
    Anonymous Coward, 22 Jan 2008 @ 9:18am

    To all the whinners...

    Stop complaining that you don't want to pay to play a game. Who cares if you don't like subscriptions, this isn't a referendum, it's a new business model that competes very well with people that wish to pirate a game. Shouldn't we be happy that at least they aren't crippling our systems with some sort of crappy DRM? At a minimum they're being somewhat innovative as opposed to creating a $50 box and then letting people send all the 1's and 0's to their friends (or not friends) for free.

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  • identicon
    Time Management, 22 Jan 2008 @ 10:24am

    IT IS NOT A SKILL!!!!!!!

    To Killer_Tofu ...

    You just don't get it. IT'S NOT SKILL!!!!

    It's just a game. I've played WoW and Guild Wars ... (Guild Wars is just a weaker version of WoW and you can still buy items in Guild Wars from sellers too.)

    A Logitech G15 keyboard helps your "skill", a G5 mouse helps your "skill" in Battlefield, a better sword helps your "skill" in WoW and Guild Wars, software addons help your "skill".

    In WoW a level 70 player can destroy a lower level character, or an equal level can destroy another of the same level if they have better items. Forums tell how to play a character and anyone can read it. In PvP, it's who has the best items who wins ... it is NOT A SKILL. Buying items just saves grinding time to be better at PvP.

    (By the way, in WoW PvP, I had over 20K kills while still at lvl 60, and had a win loss ratio of 10 to 1 in AV and around same in AB. I PvP'd as Horde at all levels and all I bought was an elite mace/sword for each level. In GW I had a lvl 20 archer, but the game is not near as good.)

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  • identicon
    Raptor85, 22 Jan 2008 @ 10:49am

    sounds like what ea did to ultima...

    As an ex-UO player (thank you EA for trying to make UO exactly like WoW, if I liked WoW i would have just switched to that when it came out thank you! Nice job alienating all your existing player base with new expansions in an attempt to appeal to the new market)I have to say this is NOTHING new for EA to do, I cant read the article from here but to me it doesn't sound like they're talking about buying "ammo" or something like that, it sounds like the "game code" store for ultima where you can buy special items, slot upgrades, etc... it was somewhat mentioned up earlier also, the site EA sells these from is http://www.uogamecodes.com/ . what they sell changes from time to time, they even (cant see site from here, they may not have it anymore) sell "advanced character" tokens, where you buy a premade character template with ~80 skill in different areas depending on character. (for those not familiar with ultima, it doesn't use levels, you level different skills individually, your class name is dynamicly generated based on what your highest skill is, and you can change skills at any time) For $20 you could buy one of those and for some of the templates (for example, animal tamer) it would easily replace a few month's worth of skill leveling. They also sell items like anniversary gifts, evil house decor set, etc.. All in all completely unbalanced the game.

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  • icon
    Killer_Tofu (profile), 22 Jan 2008 @ 10:49am

    Heh, Silly Time Management

    You must not have played Guild Wars much then.
    In PvP it is definitely about skill.
    It is pretty easy in Guild Wars to get to the max level (always been 20), and aside from getting a "pretty" looking item, you can get good items easily too. It is about skill.

    Also, reading a walkthrough and pulling it off smoothly is still not the same. These aren't console games you can pause. I am sorry WoW is so item dependant. That is part of the reason I saw EQ breaking early on and bailed. All items added tons to many stats. I see that as kind of lame. Just my opinion. You are entitled to yours. But opinion or not, GW is a skill game. Based on getting better items or not, as previously stated, WoW will never be worth some of my money every month. No game will.

    And if other people who play GW own all that special keyboard or mod shit, I laugh at them as I still beat people and haven't used my money on special trinkets for my PC.

    Ever so minor note, there is no Archer in Guild Wars. It is called a Ranger. Kind of gives away the you didn't play much thing =

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  • identicon
    Time Management, 22 Jan 2008 @ 11:35am

    Not a Skill !!!!!!!!!!!!!!!!!!!!!

    Guild Wars is no more a skill game than Tic Tac Toe is.
    You are suffering from s delusion if you think it is a skill. With better weapons, and a whole team with better weapons in GW PvP ... you win. Simple as that and you know it.

    (You are right, it was named a ranger, haven't played GW in over a year and half ... the game is just a weak version of WoW.)

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  • icon
    Killer_Tofu (profile), 22 Jan 2008 @ 12:30pm

    Lol, poor TM

    A weaker version?
    They aren't even the same type of game. Sorry to break the news.
    And there is skill involved in Tic Tac Toe, otherwise there wouldn't be a whole walkthrough on how to never lose on Wiki How.
    Ok mister nobody has any skill at anything ever, what happens when everybody has maxed out items, as is usually the case with Guild Wars since its not hard to get. Random chance? Hardly. I am sorry that you are so poor at your WoW that the whole game matters for gear.
    My friends who play WoW talk all the time about their skills with a certain build, but not being as great with another. Or the other friend who plays was commenting how she was a Healer Priest yet was somehow healing more on one raid than another Healer Priest who was 2 levels higher and had better gear. Sure, its all based on loot. Lol, what a joke.
    I consider you officially rebuked and the argument over. The lack of structure to your argument and complete void where evidence (or anecdotal experience) usually goes is sad.

    Every awesome player at every game has skill. That kid who was the world champion at Halo. How did he beat everyone all the time? Everyone in that game has the same access to the same weapons. It was by skill.
    Somebody dumping powerful gear on you doesn't make you awesome (at least not in any game worth playing). Sorry to break the news.

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  • identicon
    Time Management, 22 Jan 2008 @ 1:10pm

    How old are you? 15? Live in your delusions.

    reply to this | link to this | view in chronology ]


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