Born Free

Published as part of our sister-site GamesIndustry.biz's widely-read weekly newsletter, the GamesIndustry.biz Editorial, is a weekly dissection of an issue weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.

This week, Funcom's Age of Conan became the latest MMORPG to embrace the free-to-play, or freemium, business model. From this summer, the game's basic content - a fairly expansive experience in itself - will be available for free, with expanded content and various items purchasable for a price. The existing subscription model will also remain available, satisfying current users - but it's fairly clear where Funcom sees the game's future growth prospects.

In the massively multiplayer sphere, freemium - a horrible crime against the English language, but arguably a more accurate term than free-to-play - has emerged as the rival business model to subscription gaming. Originally adopted by Asian MMO operators, most notably those in South Korea, the model has more recently been embraced by several major western firms - to the extent that it's now being retrofitted to existing subscription-based titles, like Age of Conan.

There's an inevitable temptation, when a company makes a move like this, to interpret it as a sign of failure. Age of Conan is a game which has unquestionably underperformed expectations, its commercial prospects damaged immensely by an underwhelming and very buggy experience at launch which the company took far too long to repair. Dogged by the resulting negative perceptions and criticism, recovery has been slow and halting despite vast quality improvements in subsequent years. As such, the game's detractors will no doubt be quick to characterise the shift to freemium as a final, desperate throw of the dice.

If the decision to shift an MMO from subscription to freemium is inarguably enabled by underperformance, that doesn't mean it's an act of desperation

Their argument is strengthened by a simple reality - if Age of Conan were doing very well from subscription revenue, this move wouldn't even be considered. The game's not in good company in this regard - the other high-profile freemium move that's ongoing right now is APB, the game whose disastrous commercial and critical failure sank developer RealTime Worlds.

Successful games don't make this kind of transition.There's no evidence of Blizzard moving World of Warcraft to a freemium model any time soon. When a goose is laying golden eggs, you certainly don't kill it, but you're also pretty unlikely to start feeding it something different or put it into a new shed - it might lay more eggs, but what if it stops entirely?

Yet even if the decision to shift an MMO from subscription to freemium is inarguably enabled by underperformance, that doesn't mean it's an act of desperation - and it certainly doesn't mean it's a mistake.

The experience of Lord of the Rings Online is a particularly interesting tale in this regard. LOTRO, unlike Age of Conan, enjoyed broad critical adulation from the outset and maintained a healthy subscriber base, even if it was never likely to give Blizzard any sleepless nights. Yet Turbine decided to turn the game over to a freemium model - and later reported that they'd trebled their revenues in the process.

LOTRO is hardly an isolated example, either. In fact, Funcom themselves have experience with this kind of transition - having done it before with Anarchy Online, way back in 2004. The move to freemium is credited with guaranteeing AO's long-term future, essentially taking a game which was widely perceived as commercially doomed and reinvigorating it to the point where it has now managed to become one of the longest-lived games in the genre.

Why does freemium work so effectively? Some of the benefits are very obvious. It breaks down barriers to entry, by allowing players to experience the game without making a financial commitment. Even offering a month's free play time doesn't have quite the same impact on players - those playing a free month are aware that a financial commitment is expected of them shortly, which makes them less likely to engage fully with the game and more likely to be hyper-critical of any failings. A free month is a test drive, a demo; a freemium game is something players can engage with in the knowledge that they can keep playing and won't be forced to pay at any point.

Freeing the player from financial commitment offers a number of other side benefits which make the game much more attractive. It means that cash-strapped players don't necessarily have to pay for the game each month - they can buy stuff in months when they're a little more flush, but can keep playing for free at other times. That's not just appealing to younger players, students and so on; it's also appealing to those who already have financial commitments to other game subscriptions, and don't want to increase that burden.