Champions Online’s recent decision to go free-to-play is a sign that massive multiplayer online role-playing games (MMORPGs) are just now recognizing what multi-user dungeons (MUDs) have known for a long time: free-to-play is a viable model for MMOs.
What’s interesting is that the MMORPG industry has entered this space unwillingly. Guaranteed revenue is much more appealing, but the MMORPGs like Dungeons & Dragons Online have changed from pay-to-play to free-to-play. Using Dungeons & Dragons’ switch to Unlimited as an example, it seems this is a decision of last resort — a sign that MMORPGs aren’t competing effectively in their space. But as a differentiator it certainly helped Dungeons & Dragons Unlimited, which received three different awards as a free-to-play MMO.
Despite MMO-developers’ claims to the contrary, this has been a successful model for MUDs — BatMUD and RetroMUD being two examples that support their systems through precisely these sorts of micro-payments. EA claims to have invented this technique back in 2008, but it was also used successfully as a business MMORPG model in Korea with FIFA Online.
The games are free to pay, but the advantages have a cost. The challenge is in offering the appropriate content without giving rich players an unbalancing advantage that discourages free players from playing — and at the same time makes the free players envious enough to want to pay for advantages.
Free-to-play works. The average revenue per user for free-to-play MMORPGs is from $10 to $50/month, with up 10% of the player base paying/month. Behind free-to-play is the psychology of “shaping,” a level-based system that encourages players to compete with each other to acquire a virtual good — experience points, weapons, armor, power, spells, etc. Free-to-play takes advantage of this natural tendency. It’s why badging works on Foursquare, why reviewer rankings matter on Amazon, and why levels matter in MUDs — not because there’s any intrinsic tangible value to being the first, or the highest, or having the most. It’s because there is a perceived social advantage shared by an intensely focused group of like-minded people. People pay not to just benefit themselves, but to beat the other guy. Taking advantage of that tendency provides a natural way for MMOs to make money, and over time, may well be the ONLY way MMOs make money.
Is this just a MUD phenomenon or is pay-to-play a viable method for MMORPGs? What do you think?