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Evolve or Die

Greg Tito | 14 Jul 2011 14:30
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Back in the ancient times of the late 1990s, 3D graphical MMOs were these fantastic worlds you could inhabit only if you paid a monthly fee. Games like Ultima Online and EverQuest were expensive undertakings, but their makers became extremely rich from the fees they charged. Then, in 2004, one world was created whose success quickly eclipsed the rest. Blizzard's World of Warcraft stole time and money away from the creators of the other worlds; games like Age of Conan and Warhammer Online tried to gain enough subscribers to stay afloat but ultimately they were unable to compete. Developers looked to Asia and Europe, where games fueled by microtransactions had flourished, for inspiration, and the evolution to free-to-play saved many MMOs from destruction. The games that evolved survived in the new ecosystem, while those that did not still struggle.

The perception was that all you needed was a polished MMO for gamers to line up and throw $15 at you every month.

In such a landscape, it seems like evolving doesn't require much brain power. "It's actually not a 'no brainer,' not to most of the US game makers and publishers. They are kind of trapped in this mentality that every single player has to pay something to access the game," said a man who made quite a lot of money charging people to enter his game world.

Mark Kern was the team lead on World of Warcraft at Blizzard (and had his hands deep in the Diablo and Starcraft franchises as well) before he left to form his own company. Founded in 2005, Red 5 Studios began work on an MMO vastly different from WoW - a sci-fi shooter eventually titled Firefall. At a time when World of Warcraft was rapidly growing in population and revenue, the perception was that all you needed was a polished MMO for gamers to line up and throw $15 at you every month. Firefall was to be no exception to the subscription model.

"We felt that with a AAA quality game, a subscription was still the way to go," Mark Kern told me. "I was pretty skeptical of free-to-play five years ago. We had observed the phenomenon in China and it seemed like the 'failing' games were quickly converting to free-to-play out of necessity rather than any new or novel business model."

The free-to-play model of charging for games is nothing new. PC games were frequently distributed as shareware in the late 80s and early 90s with a version of the game on a floppy disc that was limited in some way. Pay the creator a price, usually around $10, and the full game was unlocked. Selling MMOs as free-to-play is a relatively new concept though, as the traditional model set by the genre's pioneers gained notoriety by charging monthly fees. But in the post-WoW market, subscription MMOs have to fight for a regular commitment from their customers, some of whom found it very hard to afford games of any kind, especially during a recession.

"Around 2009, when the economy tanked, I started to really worry about people's ability to pay for games, and a subscription, and new hardware," Kern said. "Free-to-play was looking like a better way to get the game into people's hands. I started to look into it in depth, talking to companies in China and Korea, and mining the data I could find from public companies and anecdotal evidence. What I found surprised me; free-to-play wasn't just a successful model, it was an incredibly profitable one."

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