In part 1 I reflected on how successful free to play is as a business model. In part 2 I looked at a flaw in that business model that could leave it open to competition. Now I want to ask what business model might be better for online games in the long run? The common flaw that I see in both the traditional subscription model and the free to play model is that customers are not paying for the costs they incur. In a subscription game casuals pay too much and committed players pay too little. In a free to play game casuals pay too little and committed players pay too much. To date "lock in" has tended to distort the market and prevent real price competition which would expose this inefficiency but if some smart competitor starts offering "equal status transfers " where you can carry all of your accumulated standing from one game to a new one then that lock in could quickly become irrelevant. The best protection against this form of competition is to charge custo...
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