Free Games Profitable?

This post is based on a older GigaOM video Free-to-play MMOs Profitable- on January 31. For those that do not know, MMOS are massively multiplayer online games that have hundreds, thousands, or even millions of players. The traditional business model for MMOs were simple. Buy the game. Pay a monthly subscription to play. While there is nothing wrong with this mindset, MMO players typically are more “hardcore”, or into gaming, than your typical Wii player. These gamers are not going to pick up a new MMO just because a company releases one. New PC games generally cost around fifty dollars; add that to a fifteen to twenty dollar monthly subscription fee and it is understandable why so few MMOs are popular.

This brings us to the new business model for MMO gaming. Now, many retail-quality MMOs are being offered as a free download without any monthly subscription service. Revenue now comes from items such as clothing, weapons, enhancements, land etc...that players buy for their characters. This concept was developed in South Korea and has now been brought to the USA by K2.network.net. This company has made millions by simply selling these customization items. The biggest drawback to the Free-to-play model is that launching an MMO can be very expensive. Also, the free game model is somewhat slower profit wise than the traditional pay to play mode. It takes some time for gamers to get caught up in the game so to speak Obviously, there is great potential for long term benefits, as the creators can always add new customizations The best way to look at the new model is a service model. If the producers provide a good game and good service to back it up, then players will naturally buy the little customizations and add-ons. The traditional model comes with more-less everything the player will ever have in one package, so the initial investment may be higher, but the long term benefits quickly diminish as players get bored.