Why Do So Many Games Use the Free-to-Play Model?
When Destiny 2 was launched in 2017, Activision released it under the traditional “pay-to-play” model requiring players to hand over at least $60, depending on which version they chose to buy.
This is the business model that most video games have used since the creation of the first consoles and home computers in the 1970s. It’s also the same monetization model that had been used for the original Destiny title in 2014.
However, in 2019, it was announced that the game’s developer Bungie would be ending its partnership with the publishing giant Activision and going it alone. This gave the company full control over the entire Destiny franchise.
With this full control, the company switched to a free-to-play model in October 2019 after releasing New Light. Since then, the game has continued to enjoy huge amounts of success as new and old players continue to enjoy regular updates.
This free-to-play model has become increasingly popular in recent years, so you may be wondering why this is, where it has come from, and what is in it for the developers.
Giving away games (or parts of games) for free may seem like a new concept, but it is actually a practice that goes back decades. Since the invention of the online casino, companies in this sphere have been offering free spins and other bonuses to customers as part of their marketing activities. It is so commonplace within the iGaming industry that most players have come to expect that they will get something for free when they join a new casino, regardless of which one it is.
But free games actually go back much earlier than this. A model known as “shareware” was common in the 1980s and 1990s as a way to distribute software. You have almost certainly used some of this software yourself and may even still use it today, including UltraISO, WinZip and WinRAR.
Shareware works by offering part of the application for free and encouraging users to share the installation medium with their friends and colleagues as a way of distributing it. However, if a user wants to unlock all of the program’s features, they’ll need to pay for a license.
Many of the most famous retro PC games were distributed this way, including Duke Nukem, Wolfenstein, Quake, and the earliest versions of Doom. This helped them to spread during a time when the internet was painfully slow, making downloads impractical for most.
How Did It Start?
By the late-2000s, gaming companies had been looking for new ways to monetise their content for some time and had experimented with a few different options. This was because the growing demand for online gaming was creating ongoing costs that they hadn’t had to bear before, and inflation was increasing the financial demands of developing games.
They felt that it wasn’t sufficient to just keep increasing the price of new titles as it would eventually mean a new game would cost almost as much as the console. They also wanted to try and get a share of the second-hand market, which up until then left them out of the loop.
One way to do this was to charge a fee to anyone that tried to play a pre-owned game in an online multiplayer mode. This was widely condemned and criticised by players though and was scrapped pretty quickly.
Instead, publishers began charging extra for DLC, initially with “map packs” and other minor expansions. Fans were pretty happy with this model as they felt like they were buying “something extra” rather than being forced to pay for something they already owned. However, players still needed to buy the base game upfront before being given access to the extra content.
Then, games like Farmville helped to create the free-to-play model we have today, doing away with upfront payments, adding social sharing features, wait times, and microtransactions. In a recent video on their YouTube channel, Slidebean described the game as “patient zero of the microtransactions plague”.
After seeing that players were happy to spend significant sums this way, other developers and publishers began incorporating the monetisation method into their content as well, with most AAA titles now including in-game purchases in some form.
Why Do Gaming Companies Give Away Content for Free?
The modern free-to-play model is certainly different to free spins in a casino or the shareware model that was common in the 1990s but, at its core, the basic premise remains the same. Publishers let you enjoy their content for free because they’re confident you’ll be willing to pay to access the rest.
In the case of an online casino, once you’ve used up your free spins or bonus funds, it hopes that you’ll make a cash deposit and continue playing. In the case of a free-to-play game, the developer wants you to buy in-game items or a “season pass” to get continued updates to the content.
It essentially means you end up paying for the game over a longer period of time, instead of having to fork out the full amount upfront. However, publishers and developers also know that a small group of gamers will be willing to hand over even more money this way to get access to every extra feature.
A 2019 survey found that League of Legends players will each spend an average of $92 per year on microtransactions, 50% more than Destiny 2 and most other pay-to-play video games cost when they’re first released. A similar figure is true with Fortnite, with research suggesting players of the free-to-play battle royale game pay Epic Games $82 per year, on average.
In 2018, Fortnite generated $5.4 billion of revenue through this model, while publishers Electronic Arts and Activision both generate a sound half of their turnover from these “recurrent transactions”.
For Bungie, Destiny 2’s revenues are a little more modest at around $400 million per annum, which is incredibly impressive when you consider the company hasn’t developed an entirely new title since 2017.
Overall, the free-to-play model is a compromise between giving gamers an affordable way to access the content they love to play and creating a business model for publishers that allows them to continue to develop new titles and maintain their existing ones.
No longer are developers required to churn out entirely new games every few years; instead, games like Destiny 2 can be enjoyed by fans for many years, with regular updates, like New Light, that keep them engaging and interesting.
Therefore, it seems unlikely that the free-to-play model is going away anytime soon.