Skip to main content

Rethink: How Much Should You Expect to Spend in a F2P Cash Shop?

Heartless gamer   made a very good point in a comment to my earlier post about how much the average paying user spends in a free to play game. I had linked to a famous Gamasutra article which shows that the average spend per paying user in Puzzle Pirates is $50 per month and from that I concluded that that was what a serious end game player in any free to play should expect to spend. Heartless points out that we cannot be sure it is the same 5,000 paying users every month. Perhaps a much larger group of players are making sporadic payments of $50 or so every few months. This of course changes the economics for users. If a larger percentage of players are prepared to pay something the the average cost per paying player can be less.

Perhaps the most interesting figure coming out of that article is the $3 per every user (paying and non paying)  that he feels would be a very good revenue target for a flash based free to play. Every single user whether they are hard core or softcore beginner or end gamer adds some cost in terms of server bandwidth, in terms of marketing costs and in terms of support costs. Now my gut feeling is that a full blown mmorpg like Allods is a lot more expensive to create and maintain that Puzzle Pirates or any of the Flash based games. I am going to stick my neck out and guess that $6 per every user is a more realistic revenue target for a game like Allods online. Remember that subscription games are taking more than $10 or more per user even after all discount subscriptions and free trials are taken into account.

Ok going with the $6 figure the next question is: "What percentage of users will pay something"? Then it becomes simple arithmetic to determine what you need to get from paying users. If half of your players are going to pay something then an average monthly spend of $12 from them is likely to be enough. On the other hand Daniel James from Gamasutra suggests that only 10% of his players every paid anything. If only 10% of Allods players put their hands in their pockets then Gpotato is somehow going to have to squeeze $60 per month out of each of these dedicated players.

To be honest a 10% figure for paying versus non paying wouldn't surprise me. Going from the buzz in the game and on the internet there is a surprising number of people who seem to feel they have a "right" to play the game for nothing. 

Based on the above analysis I don't think that a target $60 per paying user (ARPPU) is unrealistic for Allods  but many of the games erstwhile most vociferous supporters clearly do think it is unreasonable. The problem here may be that the game is so good and so polished that it has attracted a large number of former players from subscription mmorpgs who are accustomed to paying only $15 per month for a game of this quality. Unfortunately if most people are going to pay for free then there is no way the small number of serious payers are going to get away with $15 per month or anything like it.

What to do?
1. Try to broaden the revenue base as much as possible - stack the cash shop with cheap novelty and convenience items that will get $1 or $2 from a much wider spread of customers.
2. Consider gating content in some way and charge for access. Free to play up to level 10 or whatever.
3. Think about going to a subscription only model - you would lose a lot of customers but those you keep would pay their way.
4. Cash shop and optional subscription combined. This is tricky - If most of your players still opt to play for free and hard core players use the subscription to limit their cash shop expenditure then you won't get enough average revenue per user. Since subscription players would rightly expect to have unhampered access to all game content you would need to stack your cash shop with glamour items (pets and such) in order to entice a few extra dollars off subscription players.
5. Introduce a pay for time model with some free allowance of time to justify the continued "free to play label"
5. Accept that former World of Warcraft Players are a dead market for this game. Sit out the mass exodus that occurs once the cash shop becomes live and advertise heavily to players of Puzzle Pirates and similar games who are used to $50 per month expenditures.

Comments

Anton said…
I have no problem playing F2P and never spending a penny.

Your review spurred me to download the game and I tried it out. This game is gorgeous, and the way I played last night for the first time, it was incredibly entertaining. I skipped all the side quests and just did the main quest chain to get out of the starting area. I also grouped up with a friend.
Let me know if you care to play together--although my schedule isn't that flexible, it'd be fun to hang out sometime.
Tesh said…
Funny thing about PP is that the market self-regulates. Those players spending $50 aren't actually buying *stuff*, they are buying doubloons, which can then buy *stuff* or *services* in-game. That intermediary step is crucial, since players can exchange doubloons between each other or sell them for in-game gold via the currency exchange. That makes the money-time conversion much more fluid (gold for doubs and vice versa), and since doubloons don't expire and can be used in many different increments, they retain their value well. There are no wasted doubloons, in other words, while other systems may well wind up with wasted secondary currencies *coughAtlanticaOnlinecough*.

In the end, a player might wind up spending half of their doubs on *stuff*, but selling the other half to other players. That means both parties are happy; the players with cash sell their doubs to players with gold (time), and both wind up with something they didn't have before.

Of course, I don't know how many players actually do wind up doing that, but the bottom line is that those players spending wads of cash aren't necessarily just buying stuff from Item Shops for single character use (and even when they buy *stuff*, almost everything in-game is produced by the player economy); they are fueling the in-game dual currency economy. That difference is crucial, I think.

When purchases like those in RoM or AO are transactions between the players and the publishers, it's a simpler system, but also a more painful one. Players who don't want to pony up cash are priced out. In PP, since gold (time) and doubs are more fungible, it's easier to get more people on board. There's always a market for both those with more time than money and vice versa. Since both ends of that demand cycle work, Three Rings benefits from being the middlemen.
mbp said…
The rmt market in EVE works a bit like that too Tesh. Some EVE professions generate more ISK than they consume while some consume more ISK than they generate. The RMT market provides an out of game method for players who like the differing play styles to trade.

Popular posts from this blog

Portal 2 two screen coop on one PC.

I mentioned before that I intended to try Portal 2 in "unofficial split screen co-op mode. Well split screen on a small computer monitor is a recipe for a headache especially when the game defies gravity as much as portal. However a minor bit of extra fiddling allowed us to drive two seperate screens from one PC. The Steam forums describes a complicated method of doing this that I couldn't get working so this simpler method which worked for me might be of use to someone. 1. First I followed the instructions in this post to get split screen multi-player working: http://forums.steampowered.com/forums/showthread.php?t=1847904 A minor issue not mentioned is that you need to enable the console from the keyboard/mouse options menu I am using keyboard and one wired Xbox360 controller as suggested. Getting the controller to switch to channel 2 was tricky at first but as Chameleon8 mentions plugging it out and in again during loading works. The trick for me was to do the plug / p

Android Tip 3: Sharing a Folder between multiple users of an Android device

Android has allowed multiple user logins for quite a while now. This is can be very useful for tablets which are shared by family members. Normally Android erects strict Chinese walls between users preventing them from using each others apps and viewing each others files. This is a useful security feature and ensures your kids don't mess up your work spreadsheets when screwing around on the tablet and should also prevent them from buying €1,000 worth of Clash of Candy coins on your account. Sometimes however you really do want to share stuff with other users and this can prove surprisingly difficult. For example on a recent holiday I realised that I wanted to share a folder full of travel documents with my wife. Here are some ways to achieve this. 1. If you have guaranteed internet access  then you can create a shared folder on either Dropbox or Google drive. Either of these has the great advantage of being able to access the files on any device and the great disadvantage of bein

Lotro: The Forgotten Treasury

Throg joined a Kinship group for the Forgotten Treasury instance last night. It was an enjoyable change from the solo questing that the now level 55 dwarf champion has been mostly doing so far in Moria. Some members of the group had tried and failed to clear the Treasury before so we knew it would be challenging but we were lucky enough to have a well balanced group with Guardian, Minstrel, Lore Master, Hunter, Burglar and Champion (Throg). Throg (level 55) and the minstrel (53) were both below the 56ish level of the instance but the others were all higher so it more or less balanced out. [SPOILERs ahead] It is a well designed enjoyable instance set in a circular chamber with balcony around. As you enter, a boss absconds to a locked side chamber with his treasure leaving the fellowship to clear trash ringed around the balcony. Once the trash are cleared you have access to a puzzle which must be solved in order to open the locked door. Clearing the (including six mini bosses) also