Nintendo figured out years ago that there lies tremendous commercial potential in the world of casual gaming. The Wii has gone on to become the most successful console this generation, largely thanks to titles such as Wii Fit which attracted users that previously had no interest in gaming.
Casual web-based game developers have taken it a step further, and if you thought World of Warcraft was big with its reported 11-million subscribers, then the 69,275,506 users who play Farmville every month may come as a shock.
At a recent UK press event a Facebook executive poked fun at rival social networking site Twitter, pointing out that Farmville alone enjoys more active users per month than it.
Farmville is not an isolated phenomenon, and games like Happy Aquarium and Mafia Wars are played by close to 7-million users per day, a figure capable of grabbing any publishing CEO’s attention. Incidentally, this is exactly what happened when one of the world’s biggest game publishers – Electronic Arts – spotted the potential in this market and acquired casual game developer PlayFish for a whopping US$275-million in early November.
Many will scoff at these figures, pointing out how difficult it is to make money when the games are free to play.
Media mogul Rupert Murdoch himself recently pointed out that there is not enough advertising in the world to fund all the websites out there, putting forward his much criticized subscription model whereby readers pay to access content as an alternative.
If the websites that host these games cannot even make money, then how can they be profitable? The answer is simple: micropayments. These games have so much commercial potential that some analysts predict that they may be the solution to the problem of mass scale social networking sites which struggle to be profitable.
PlayFish has shown strong commercial potential, with estimated revenues of around US$75-million to date. Farmville allows players to purchase in game items using real world money. While items are typically very cheap, the 70-million monthly users ensure mass profitability. The free-to-play model allows for tremendous growth, and developers need only a small percentage of users to make in game purchases to be profitable.
One can look at the philosophy employed by the likes of PlayFish and debate whether a similar model could work with more serious gaming.
It seems to be working for EA with Battlefield Heroes, a free to own and play multiplayer shooter which relies heavily on in-game micro transactions.
Following its first month of launch EA announced that they had around 1.5-million active players around the world, and that each player had spent an average of US$20 on in-game items, equating to around US$30-million in revenue in the first month. Not bad for a game that enjoyed relatively little hype.
Could other games follow using the same model, or would players grow irate with having to continually purchase content? Have your say in the forums.
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