By Robert Nunn
The global gaming industry has never been hotter.??Research firm DFC Intelligence forecasts that the global market for video games is expected to grow from $67 billion in 2012 to $82 billion in 2017. Just last week the video game Grand Theft Auto V earned over $1 billion in sales in its first 3 days of release, and is on pace to become the highest revenue generating video game ever. Overall, there are many different ways to earn revenue by games, with the most popular being the free to play monetization method. Free-to-play (F2P) games use a business model in which a product is offered free of charge while a micropayment is charged for users to access premium features and virtual goods.?
The free to play market in the U.S. has grown each year for the past six years and has currently generated around 1.5 billion in revenue this year so far. These revenue numbers are higher than what is earned from the pay to play business model. Many experts feel this trend has occurred due to a lack of exciting pay to play games and because it is easier for gamers to try a game without the commitment of buying it first. Free to play games typically have between 5 to 10 percent of the gamers make a purchase. Developers are happy with these numbers because they would rather have 1 million players using their game for free with 50 to 100 thousand paying users than to just have paying users. Having a large user base of free players is still valuable to raise awareness of the game and to be able to have in game advertisements. This is why overall there are around 6 free to play gamers for every 1 paid gamer.
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Understanding the mindset of a F2P gamer is very important when using the free-to-play business model. Games must feel there is a clear benefit to making an in-game purchase. For example, purchasing virtual goods largely relies on impulse buying, as there is little planning involved. Players usually purchase virtual goods after playing the game a certain amount of time and the time differs depending on the game. Convenience is also a large factor, in game purchase items need to be clearly defined as ways that will make the game easier. The most basic necessity is having multiple ways to pay to remove any friction and help increase the conversion rate of non-paying to paying players. According to a PayPal sponsored survey, just adding one alternative payment method can increase conversion by 14 percent. Gamer retention is also very important. The longer a gamer plays, the more likely they are to pay. One of the easiest ways to retain gamers is to get them to pay, which is why it?s important to know the right time to upsell.
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Game flow is also important for developers using the free to play monetization strategy. A game with good flow gives gamers a feeling of being fully immersed in a game and not knowing how much time has passed. The flow of a game is what leads gamers to make a purchase and should not be overlooked when deciding how and when to ask gamers to pay. A good game flow has free vanity or consumable (one time or limited use) items at the beginning of the game, and then transitions into needing to make a purchase to obtain the same level of gameplay and enjoyment.??Vanity items serve no functional value, yet they have a value to gamers to make them feel more connected to the game.
About the Author: Payelp
Source: http://www.payelp.com/free-to-play-gaming-2013/
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