“Free” is proving to be the most profitable price point for a game. It’s working for giants like Zynga (Cityville) and Bigpoint (Dark Orbit). It’s working for small companies like Nimblebits (Tiny Tower) and Snappy Touch (Flower Garden). If you make games (or want to), you need to understand the power of free. I originally presented this at the public sessions at Edinburgh Interactive on 11th August 2011. http://edinburghinteractive.co.uk/public-programme

1. Nicholas Lovell GAMESbrief Edinburgh Interactive Entertainment Festival August 11th 2011 NEW BUSINESS MODELSHow to make money giving your game away for free

2. Nicholas Lovell, GAMESbrief Author, How to Publish a Game Director, GAMESbrief Clients include Atari, Channel 4, Channelflip, Firefly, IPC, nDreams, Rebellion and Square Enix @nicholaslovell / @gamesbrief

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5. Free – It WORKS

6. Free has been hugely successful Zynga: filed its S-1 $600m + in revenues Valuation expected >$10bn Tiny Tower: 2 men, four months Currently #12 in the top grossing chart Conservative estimate: $3m revenue in first 12 months (PS: # 1, 3, 4, 5, 6 are free too) Bigpoint €200 million in revenue €650 million valuation

7. Free is a marketing technique Free means you have a lower barrier to entry Free means more people try your game Free gives you players; players are potential customers It’s all about the conversion from free users to revenue generating users If you are not free, you are competing with free Advertising-funded Pirated Free from someone else

8. Why does free work?

9. The price/demand curve In an era of physical distribution, you need to set a single price For games, around $40 PRICE “It’s great value, I’d have paid much more” “That’s too expensive for me” Demand

11. LOTRO and Everquest II showed a similar story$3 $5 $5 $1 $5 $3 $10 MMO subscription $3 $3 $3 $1 $5 Demand

12. WRONG!

14. Find the whales

15. An iOS example: Pocket Frogs

16. An iOS example: Pocket Frogs

17. Content is the hardest thing to sell

18. It’s deeper than that

19. People pay for status, for emotions, for feelings, for progress People will pay to: Fit in: “everyone else has got a Santa Hat, I want one too” Stand out: “Look at me with my twin flaming swords of Poinsettia” Fit in AND stand out: “Hey, we’re the guild where everyone wears purple” Build friendships: “Here, let me give you some flowers as a sign of our friendship” Flirt: It’s the Internet. Of course it’s about sex.

20. Some basic rules of free

21. ARM yourself Hoping for the best is not good enough, you need to ARM yourself ACQUISITION: How do I get people through the door cost-effectively? RETENTION:How do I keep people coming back for more? MONETISATION: How do I build money-making strategies into gameplay Most developers focus on one of these All three are really important

22. The rule of 0-1-100 Make it enjoyable for people to play for free for ever Make it easy for people to spend $1 Make it possible for people to spend $100 per month

23. Be generous “Give, and it shall be given unto you” Luke 6:38

24. You’re not making films anymore

25. Free is flexible

26. Are free / freemium / F2P games evil?

27. NO

28. F2P = evil (or not) The business model is designed to take money from you So is the coin-op, or the MMO, or the DLC Some people spend lots of money on it You get lots of content for free Instead of paying for access, you pay for the experience that you VALUE They’re not real games Grow up. Oh, and the games will grow up too They don’t have enough skill / fairness / challenge Well don’t play them then Just because you don’t like them, doesn’t mean they are evil

29. Some valid concerns How much money is it ethical to take from a single player, in a single month? Are microtransactions appropriate for children? Are there certain games that aren’t suited to free-to-play I say no There may be some players who aren’t suited to microtransactions Free games require certain infrastructure and expertise that may challenge the indie developer Will it stop working?

31. Incorporate ads for a limited edition, 1,000-only print of the original Morph, framed for your wall for $999

33. Free is changing the games industry – for the better Free allows small studios to make big money from serving niche audiences Free reduces risk, and hence increases diversity Free gives more choice to consumers I get lots of games for free!

34. Thank younicholas@gamesbrief.comFollow my blogwww.gamesbrief.comBuy my booksEIEF80 (until Friday 5pm)