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In Defense of Freemium

February 6, 2014

ALL RIGHT, PEOPLE. I think it's time we had a serious chat about all this fussing over free games with in-app purchases (freemium). Because this is getting seriously out of hand.

There have been front-page posts on Reddit pointing to articles like "How In-App Purchases have Destroyed the Industry" popping up on the regular now, making claims like "We don't have a mobile gaming industry anymore. We have a mobile scamming industry."

The latest big freemium critique came from Eurogamer in their review of the new Dungeon Keeper game launched by EA. Eurogamer gave it 1/10 because of its excessive microtransactions. In essence, Eurogamer's reasoning is that this is a free game, but you don't get to play it in any kind of reasonable way unless you are throwing handfuls of cash at it. But instead of having an aneurysm about the fact that EA wants you, the player, to pay them for the game they made, maybe we should take a step back and look at the bigger picture.

Our Path

I'd like to take you on a trip down memory lane. It was January of 2013 (just over a year ago), and we were a fledgling studio without any major titles. We had just struck out on our own, and we had what we thought was a pretty unusual game that a lot of people would find compelling. We called it Towelfight 2: The Monocle of Destiny. And, like many gamers, bloggers, and games industry folks, we had a strong aversion to freemium. We had the idea driven into us that microtransactions were unethical, and we were sold the idea that if you made a damned good game, people would just buy it if you asked them to.

Well, our game was indeed pretty damned good -- it was the highest rated Android game to come out in March, and the second highest rated Android game in the first quarter of 2013. And it was a complete financial failure. Why? Because we used a pay-up-front business model. To date, it has only brought in 30% of its cost of production in revenue. As it turned out, people liked our game, but they were damned sure not going to pay for it up front.

So we changed course and made Quadropus Rampage, our first freemium title. Quadropus has done substantially better than Towelfight. It has somewhere around 2 million players, and is profitable to the point where we're almost sustainable as a two-man studio.

When we made Quadropus, we still weren't comfortable with the idea that freemium was a good thing to do, but we didn't have much choice in the matter. It was go freemium, or go bankrupt. Within our first 6 months as a studio, we learned that as much as people may say they'd prefer to just pay for games up front, it simply isn't true in the aggregate. And you know what? Now that we're another 7 months down the road and have had some serious time to think about all this stuff, we've come to a startling realization. All those people out there who won't pay for a game up front? They're probably right. Because...

Freemium is potentially the most ethical way to conduct business in the games industry.
Before you burst a blood vessel in your forehead, let's consider two fairly common scenarios.

Note: I'm going to keep the discussion between pay-up-front and freemium here, because they tend to be the most at-odds with each other in players' eyes.

The Pay-Up-Front Model

Some new game hits the market, and you're super pumped to try it out. You hop online, drop your $40 on the thing, download it, and get crackin'! So far so good, right? This is the old-school way of selling games, and many gamers and industry professionals think this should be the de-facto business model in gaming. The player gets a full, complete game, the developer gets paid, and BOOM. Everybody wins.


What about the times you spend cash on a game, only to discover that it wasn't worth the money? Turns out the screenshots and the cinematic trailer didn't really convey what the game was really about, and you walked into it blind. Or maybe the game takes a lot more grinding and time than you had originally been led to believe, or the combat is really choppy, or it has some major bugs that make it unplayable for you. Or perhaps the game description you read was overblown by the developer's marketing team, and it promised much more grandiose things than it could deliver.

When you pay for a game up front, what exactly are you buying? An unknown. You have no earthly idea whether it's going to be fun, or engaging, or even functional. Sure, you can read reviews and watch Youtube videos, but at the end of the day, you don't get to discover whether it's all it's cracked up to be unless you crack open your wallet. And if it turns out that's not the case, what do you do? You just got coaxed into spending money on something that you actually don't like. How often do you ask for a refund when you find yourself in this situation? My guess would be... rarely. It tends to be more trouble than it's worth.

How many games do you have in your Steam library that you've played for less than 20 minutes?

The Freemium Model

All right, now let's take a look at another example. You cruise through the "top new free games" list on your phone and download a few that seem promising. You fire them up, and one of them seems like it might be fun.

Fast forward five hours. You've now sunk your afternoon into this new game, and it's a hell of a lot of fun. You can see yourself putting another 20 hours into this thing, maybe more, and you know that because you've played it. So you pop open the in-game store to see what you can buy, and drop a few bucks on the thing to boost your gameplay along.

Here's another scenario. Maybe you've sunk a few hours into the game, and you run into a wall where you can't progress without spending money. You open the in-app store, and discover that the developer is asking for way more than you're willing to pay for whatever items he's selling. So what? It turns out that the price of the full game experience was higher than what you're willing to pay. So don't pay, and move on. You've made an informed decision not to spend your money, and you came out on top, because you were literally just given several hours of free entertainment at the developer's expense.

Knowns, Unknowns, and Pricing

In the freemium example, the developers have allowed you to play their game, legally and for free, for as long as you like. That allowed you to make a much more objective judgment on whether you really wanted to spend money on the game. And if you spent money, you purchased a known outcome. You already know you like the game, and you've gotten a good feel for the game's mechanics and how everything works. So when you spend your cash within the game on a level pack, or coins, or whatever, you have a pretty dang good idea of what that money is going to bring you. You're entering that in-game store with both eyes wide open.

The same can't be said for buying an entire game up-front. If you knew exactly what you were buying before dropping the cash on a pay-up-front game, how often would you still go through with the purchase? As it turns out, only about half the time. According to analytics firm EEDAR, having a playable demo of your pay-up-front game can cut your sales to less than half. That means around half of people who spend money on pay-up-front games (without free demos) have been tricked into buying something they actually don't like. And we're ragging on freemium as being unethical?

Like all things, freemium has the potential to be utilized poorly. And sure, there are games out there that cross the line and ask for way too much money for what they're offering. But the same thing applies to pay-up-front games. This is not a unique symptom of freemium; it's simply a fact of any free market where sellers get to choose their own prices. Sometimes things are priced poorly. If something is too expensive, don't buy it, and move on.


NOW HOLD ON! What about manipulative tactics like those seen in games where you get a few moves to complete a level, and you can buy additional moves for 99 cents? Or games where you buy packs of random cards? I have to ask, how is that manipulative? If you're buying a pack of moves in Candy Crush (TM?), you know exactly what you're buying. There is no way around it.

Enough with this big-brother nonsense about predatory companies manipulating people. If someone wants to spend $200 on packs of moves in Candy Crush for $0.99 a pop, it is no less valid than your decision to purchase the latest AAA shooter for $60 to play it on your $400 console with your $70 controllers on your $400 big-screen TV.

The general attitude I see is that as a real gamer, you make conscious decisions to spend thousands of dollars on your hobby, but if a casual gamer does the same thing via microtransactions in their mobile games, they're being manipulated. Isn't that a bit condescending?

People can make their own damned decisions when it comes to their money and gaming. Gaming is gaming, and your enjoyment of (and spending on) the games you like is just as valid as mine. It's time we put this debate to bed.

Final Thoughts

I can't disagree with Eurogamer's review score of Dungeon Keeper, because the crux of Eurogamer's complaint, if you strip away all the crap about freemium destroying everything, is that the game is way too expensive. If that's the case, it deserves a low rating. But that can apply to literally any kind of game, not just freemium games. To make the whole review about the freemium business model is absurd. Dungeon Keeper is just overpriced... if you play it a certain way.

Game reviewers tend to play games in a "hardcore" fashion -- in long stretches at at a time. It doesn't matter whether it's a PC game, Xbox game, or mobile game. Game reviewers are hardcore gamers. And this is where the disconnect lies. EA designed Dungeon Keeper to be played for only a few minutes at a time. A few times a day, you boot up the game, dig some holes, check on your stuff, and shut the game down. So of course, if you try to play it for two hours in one sitting, it's going to cost you.

Let's turn the tables here and imagine what it would look like if reviewers played games like Skyrim for 4 minutes at a time, a few times a day. Of course the reviews would be terrible, because that's not how the game is designed to be played. This is no different.

As of right now, Dungeon Keeper one of the top 100 grossing games on Google Play. It's definitely not my kind of game, and I wouldn't spend money on it. In fact, it doesn't look like much fun, because I don't think it's fun to play a game in small bursts. But there are millions of people out there who disagree with me on that. They play it, they like it, and they've voted on it with their wallets.

And that is perfectly fine. Who am I to judge how people spend their money?