msgr hopeful: The true cost of free-to-play

Sunday, March 3, 2013

The true cost of free-to-play

The App Store has become dominated by free-to-play, aka fremium, games. I started discussing this with some smart people on Twitter earlier today, but wanted to expand on it here, because I think it's important. What we don't acknowledge we can't change, and it feels like the current direction of iOS gaming needs to change. While some of the free-to-play games are brilliantly balanced and realized, providing value for both the makers and the players, most are not. Most suck. And a lot of that is our fault.

Some of it is Apple's fault too. iOS has an interesting history when it comes to apps when it comes to apps. When the iOS App Store launched in 2008, there were no trails or demos and no easy way to get refunds. There were, however, games like Super Monkey Ball, which cost $10 to buy. For a while that price-point held but, over time, we -- the collective we -- said we weren't willing to pay that much (at least not enough of us were willing to pay that much).

Some developers reacted by racing to the bottom in an effort to rise to the top of the best seller lists, held launch-day sales or cut their prices at some point after launch. It's a common retail strategy because, in many cases, it works. It also trains a segment of the customer base -- us -- not to buy apps at full price but to wait for sales.

To help developers make more money, Apple proffered in-app purchases (IAPs). At first, free apps had to stay free, so if games wanted to use IAPs, they had to charge at least $1 up front. That restriction was later lifted, and free-as-in-IAP was born. The hope seems to have been that ads could be removed or additional levels could be purchased, helping game makers make money.

Yet once again, "we" told game makers we wouldn't pay to remove ads or to buy extra levels. We were fine with ads, and okay with limited levels.

Independent developers need to make money to feed their children. Large gaming houses need to make money to keep making big budget games.

So given the rules of the App Store imposed by Apple, and the loud-and-clear message we've given them as customers, game makers have turned to free-to-play, or freemium models.

Most of us won't pay $1 for a great game, but will pay $99 in IAPs to have a better looking hut or farm or business or whatever than our friends and fellow gamers.

Most of us won't pay $1 for a great game, but will pay $99 in IAPs to get back to racing or fighting or crushing candy or whatever faster than our patience would otherwise allow.

Ego and impatience, not ads or levels, are what most often monetize games on the App Store.

Developers certainly aren't blameless either. Again, some do a great, customer-friendly job. Others, however, are as manipulative and exploitive as the worst of casinos. They employ behavioral analytics and conduct the equivalent of psychological warfare to try and extract every penny they can, for as long as they can, from gamers. We reward them with Top Grossing status and so much business that more and more of them sprout up every week.

They build and tune games to be addictive in the most financially draining sense of the word, like the coin-ops of old. The only difference is, you couldn't stuff more quarters into an arcade cabinet to get further, faster, and better impress the people looking over your shoulder.

You can on the App Store.

And because free-to-play, or freemium, is proving so much more lucrative than the simple, one-time, up-front payment system of the early days of the App Store, even established gaming franchises, unable to make money any other way, are switching to it, and sometimes to the less savory versions of it.

In this regard, Apple is failing in their stewardship of the App Store, and allowing the value of their platform to falter. Not the overall value -- they're still making more money than ever. But the value to well-intentioned developers and customers. And there, as I've said before, lies the path to ET cartridges being buried in the desert. Introducing real trial or demo modes, paid upgrades, and/or easy refunds -- things that exist on other platforms -- could go a long way towards influencing the App Store gaming economy away from the worst elements of free-to-play. Banning "games" with worthless IAPs, "games" akin to casinos if the player could never, ever win, would also help.

Most of all, we need to stop feeding the IAP machine, and stop rewarding that business model with our money. We need to pay for good games, for premium games. Instead of bitching that "it should be free" or "$1 is too much", we should reward great games and stand up developers with good money, because that's the only way to get more of both.

Sadly, that's unlikely to happen.

Apple created the system. Developers have learned to game it.

And we -- the collective we -- have told them we're just fine with that. We prefer it.