F2P Failure and Elite Dangerous

An interesting piece of news here:

http://www.lse.co.uk/AllNews.asp?co...ngs_To_Pretax_Loss_As_It_Continues_Transition

Nothing unexpected, given the changes going on at Frontier developments. However, this caught my eye:

Additionally, Frontier posted a GBP280,000 impairment charge for its 'Coaster Crazy' franchise after it found that the monetisation level of its free-to-play game was not as successful or as quick as the company had expected.

Will Frontier learn lessons from their dabble in F2P? How will this translate in their attempts to secure revenue for ongoing server and infrastructure costs?
 
Elite isn't F2P. Apart from the purchase price of the game, they plan on having multiple expansions for players to buy down the line.
 
Given the remarkable success of F2P games it’s not a surprise to me that everyone is jumping on the bandwagon. You have King earning £6.5m a day with Candy Crush, Clash of Clans earning £3.1m a day. Even some Vietnamese dude spent 3 days working on Flappy Birds and started earning £32k a day.

By what a lot of people don’t pick up on so readily is just how hard it is to make F2P work. 60% of players never return after their first session, and only 5% of players actually pay. Only a small handful of developers make games that have decent Day 30 retention rates and even then most struggle to effectively monetise. As a result you really need mass market appeal, World of Tanks has 75m users, so it can work on such slim uptake margins. As an aside, you never would have got that on the install base of a Xbox 360 or PS3, I remain highly sceptical about the next gen consoles efforts to break into F2P.

I really do wish FDEV the best of luck, and frankly an impairment of £280k is not really that meaningful against total assets of nearly £17m. But actually the bigger concern as I mention here: http://forums.frontier.co.uk/showthread.php?t=11864 is the big drop in margins as a result in these mystery “costs passed through”. Ultimately when I read their results I came away with the impression that their other revenue lines were showing weakness, meaning that they had more riding on the success of ED then they would have previously hoped, or at least indicated in their IPO document.

Not that is a bad thing for us, as they really need ED to be a success. Might make things a wee tad more stressful for them though.
 
Flappy bird's huge earnings were from advertising I am told, not purchases.
So I'm not sure how that relates to Elite. Unless Elite is a game based on making money from advertising in space?
 
I don't think F2P is a "recipe for failure" as the thread title hints, but it is difficult to pull off right in a manner that yields profits whilst still not scaring away potential p(l)ayers. I like to think that MWO, in spite of the negative press it got due to the delays in feature deployment, is a good example of "F2P done right" as the only stuff you can buy for real money are customisation (paintjobs and cockpit items) or progression boosts (xp bonus and things you'd otherwise need to grind in-game currency for).

Either way, it seems that Elite is actually aiming for a hybrid model - box purchase plus microtransactions. This should (hopefully) be somewhat easier on both the company as well as the players, as the box purchases would mean Frontier gets a big injection of money once the title goes live rather than money only "trickling in" over months (more attractive for studios with a big publisher covering for the dry period at the start), and they likely won't feel as tempted to sell the much-dreaded "pay to win" offers (STO, with certain ships) or focus development on microtransaction items rather than content available for everyone (TOR, with emotes and such).

Congratulations to Frontier for making this transition, by the way. With Elite spearheading the company's push, they are certain to finally acquire their own spot in the gaming industry news, outside the shadow of other brands selling stuff they developed under contract. :)
 
Will Frontier learn lessons from their dabble in F2P? How will this translate in their attempts to secure revenue for ongoing server and infrastructure costs?

I see little if any connection between this and MT planned for ED tbh, also I think they spend too little on advertising that game. However Coaster Crazy franchise maybe picks up a little slow, but so far it still has chance to redeem itself. At least reviews are good, and people seem to enjoy it.
 
Subscriptions. I've said it once and I'll say it again. I know not everyone likes them. I don't think for a minute that everyone will even be happy if they exist even if they are an option. But there are plenty people (like me) who would most happily drop £8 - £12 a month if it meant we didn't have to worry about being nickle-and-dimed by MT in Elite Dangerous.

Offer six month and annual options and better yet. If it's good enough for The Elder Scrolls Online and Star Citizen to offer a subscription model (two very different models there, true, but both offer chance for regular flat-fee payments).

Please when replying, take on board the fact that I'm only ever suggesting subscriptions as one of many options to pay. If you don't like or want to pay by a subscription, you shouldn't be forced in to it. Never would I be foolhardy to suggest that they be the only means for Elite: Dangerous. It's not that kind of game, and has never been billed as such. But from Fdev's perspective, flexibilty is key, and knowing your market is important.
 
I know Kroy you mean well, but my guess ED is just too different in that regard from MMOs to even toy with this idea.

Also I think we are jumping to conclusions here. Let's see how FD marketing plays around the game when beta comes to discuss more later.
 
I'd think purchasable cosmetic items would be good. Plenty of players would spend money knowing they help fund their favorite game. I'd have more fun spending money on stupid meaningless stuff for giggles than for "server maintenance costs" (read with bored emphasis) that will drive many players away.

PS: I somewhat dread that FD gone public. This investor related PR reads like nails on a chalkboard to me :p
 
Subscriptions. I've said it once and I'll say it again. I know not everyone likes them. I don't think for a minute that everyone will even be happy if they exist even if they are an option. But there are plenty people (like me) who would most happily drop £8 - £12 a month if it meant we didn't have to worry about being nickle-and-dimed by MT in Elite Dangerous.

Offer six month and annual options and better yet. If it's good enough for The Elder Scrolls Online and Star Citizen to offer a subscription model (two very different models there, true, but both offer chance for regular flat-fee payments).

Please when replying, take on board the fact that I'm only ever suggesting subscriptions as one of many options to pay. If you don't like or want to pay by a subscription, you shouldn't be forced in to it. Never would I be foolhardy to suggest that they be the only means for Elite: Dangerous. It's not that kind of game, and has never been billed as such. But from Fdev's perspective, flexibilty is key, and knowing your market is important.

I feel like a Kroy fanboy today, this is the 2nd reply I am about to agree with!

I completely agree, why not offer it to those who wish to do it, SC have it and use it to fund other SC activites (though I would hope FDEV used it to develop ED). I for one would also be willing to pay a monthly subscription.

Kro
 
The news seems like a tiny blip. Personally, I'd be inclined to give away something like Coaster Crazy so as to introduce people to the company's other products.

If there is one thing that baffles me is the way some of these throw away f2p games seem to make a ton of money. I suppose I am looking at it from what is desirable to me but still, who is putting their money into virtual nothings? Its like that Dungeon Keeper game in which people buy gems.. You'd have to be an imbecile to do it, and yet people are doing it. It makes no sense to me.

When it comes to Frontiers games I can't say much of the line up appeals to me but it looks like most of their stuff has been focused on a younger audience. I've only ever played Elite and sequels but seen the others on youtube.

Lost-winds looks good from what I have seen of it and although not for me I think Kinectimals and Zoo Tycoon look quite interesting and fun, especially family wise. I don't tend to play games on smartphone or tablet because it offers hugely reduced experience to that on PC

Whilst I clearly don't understand the market for young gamers I do think there is a huge market for those who are in their 20's - 40's and as far as I can tell Frontier hasn't focused on that area until now. I'm going to be pushing north of 40 in the next few years but I find myself playing games like Hitman Blood Money, DayZ (which has sold ~1 million copies) and of course Elite Dangerous.

Elite is shaping up to be an incredible game and so from a gamers perspective I'd say that has to be a good sign. Thats not a case of bias either because if it wasn't looking wonderful I'd be saying that too.
 
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I don't see how a subscription is superior to a regular box purchase. Maybe if the alternative was a F2P model with microtransactions, but it isn't.
 
Elite isn't F2P. Apart from the purchase price of the game, they plan on having multiple expansions for players to buy down the line.
I know it's not F2P, but they will need to secure an ongoing revenue stream (to pay for servers and infrastructure) so they'll need to monetise it in similar ways.

Flappy bird's huge earnings were from advertising I am told, not purchases.
So I'm not sure how that relates to Elite. Unless Elite is a game based on making money from advertising in space?
I didn't mention Flappy Bird, you did.
 
Subscriptions. I've said it once and I'll say it again. I know not everyone likes them. I don't think for a minute that everyone will even be happy if they exist even if they are an option. But there are plenty people (like me) who would most happily drop £8 - £12 a month if it meant we didn't have to worry about being nickle-and-dimed by MT in Elite Dangerous.

Offer six month and annual options and better yet. If it's good enough for The Elder Scrolls Online and Star Citizen to offer a subscription model (two very different models there, true, but both offer chance for regular flat-fee payments).

Please when replying, take on board the fact that I'm only ever suggesting subscriptions as one of many options to pay. If you don't like or want to pay by a subscription, you shouldn't be forced in to it. Never would I be foolhardy to suggest that they be the only means for Elite: Dangerous. It's not that kind of game, and has never been billed as such. But from Fdev's perspective, flexibilty is key, and knowing your market is important.


Why would anyone subscribe? What would subscribers get that the rest of us wouldn't? I have put in £100 to get this game, is that not enough to get the complete game?
 

Stachel

Banned
They should have developed the game for 6 months before the kickstarter and actually brought the neccessary proof of concept and eye candy to the table. Once concluded they should have then genuinely monetized the Alpha instead of continuing to offer the kickstarter rewards for a year at ludicrous prices. This would have ensured a far more consistent exposure, a more balanced community, generated better momentum in the media and among the various essential external communities (Steam et al) and ensured a consistent injection of cash.

Instead they went Old School: which is a deprecated method of doing business in this industry. They closed ranks, limited information despite rapacious demand for updates and eye candy, encouraged a cliquey community based on a minority of middle aged fan boys with deep pockets and actively encouraged social division via a fragmented user base. The poorer majority of whom are simply excluded from various aspects because they haven't dropped a ton on vapourware in blind faith.

Media exposure has been amateur hour bizarre: broadsheets? Some magazine nobody reads, because nobody reads magazines anymore? We're over a year in and we've just got a community manager for the forum. Who's first act was to run a competition that only a few hundred people can compete in? Again with the social apartheid. This forum has around 200 people actively engaged with it. From a KS pool of 40, 000. From a required potential customer base of over a million. Why a million? Because thats the minimum number of copies you have to sell in the first 12 months to keep the doors open. Where are these people? What do they engage with? How do we reach them and draw them in? Pro-tip: Offering £100+ Alpha access is not it.

They rather worryingly don't seem to be listening to key feedback. You can almost imagine how the reviews will go: inevitible collapse of self maintained distribution servers on release day, dated graphics, don't like the flight model, controls with kb and mouse are tedious, combat is shallow, groups promote isolationism, sandbox is only for pve no true multiplayer ie this is not a social experience, gameplay is repetitive and much hyped procedural content offers only infinite boredom etc. Bottom line: if you like that sort of thing you'll want to buy this game I guess. 70%. Meta critic flop.

If they do fail they will have only themselves to blame. If you are in business to make money you don't do things like Frontier have. And ultimately the 'we are making our game' mantra is only an excuse for not maximizing revenue and buzz and a smoke screen for poor vision and leadership.
 
Why would anyone subscribe? What would subscribers get that the rest of us wouldn't? I have put in £100 to get this game, is that not enough to get the complete game?

Sure it is. Backers should get subscriptions for free for a period of time once the game goes live.

Once that time runs out and they need to keep the lights on I'd rather see a regular monthly subscription rather than micro-payment garbage.
 
They should have developed the game for 6 months before the kickstarter and actually brought the neccessary proof of concept and eye candy to the table. Once concluded they should have then genuinely monetized the Alpha instead of continuing to offer the kickstarter rewards for a year at ludicrous prices. This would have ensured a far more consistent exposure, a more balanced community, generated better momentum in the media and among the various essential external communities (Steam et al) and ensured a consistent injection of cash.

Instead they went Old School: which is a deprecated method of doing business in this industry. They closed ranks, limited information despite rapacious demand for updates and eye candy, encouraged a cliquey community based on a minority of middle aged fan boys with deep pockets and actively encouraged social division via a fragmented user base. The poorer majority of whom are simply excluded from various aspects because they haven't dropped a ton on vapourware in blind faith.

Media exposure has been amateur hour bizarre: broadsheets? Some magazine nobody reads, because nobody reads magazines anymore? We're over a year in and we've just got a community manager for the forum. Who's first act was to run a competition that only a few hundred people can compete in? Again with the social apartheid. This forum has around 200 people actively engaged with it. From a KS pool of 40, 000. From a required potential customer base of over a million. Why a million? Because thats the minimum number of copies you have to sell in the first 12 months to keep the doors open. Where are these people? What do they engage with? How do we reach them and draw them in? Pro-tip: Offering £100+ Alpha access is not it.

They rather worryingly don't seem to be listening to key feedback. You can almost imagine how the reviews will go: inevitible collapse of self maintained distribution servers on release day, dated graphics, don't like the flight model, controls with kb and mouse are tedious, combat is shallow, groups promote isolationism, sandbox is only for pve no true multiplayer ie this is not a social experience, gameplay is repetitive and much hyped procedural content offers only infinite boredom etc. Bottom line: if you like that sort of thing you'll want to buy this game I guess. 70%. Meta critic flop.

If they do fail they will have only themselves to blame. If you are in business to make money you don't do things like Frontier have. And ultimately the 'we are making our game' mantra is only an excuse for not maximizing revenue and buzz and a smoke screen for poor vision and leadership.

you are obviously an expert in the field. impressed how you are able to deduce all these facts & figures without having any!

oh wait, you are not dealing in facts, nor figures you are conjuring your own image of how you would like to run FDEV/ED. well you aren't - for a reason :D
 
Some F2p games go viral, such as Flappy Bird, others not quite so.

I did not see mention of Zoo Tycoon, unless I miss it.
 
Why a million? Because thats the minimum number of copies you have to sell in the first 12 months to keep the doors open.

Could you explain how you arrived at that number?

I only have the publically available financial information to hand but my understanding is that selling a million copies in the first year would be a pretty solid result, not just the minimum necessary to survive.

Just some back of the envelope type calculations. But let’s say they sell the game for £35 a pop on a 70% gross margin. That would mean a £22m operating profit after a cost base of just £2m. I appreciate that’s a real slap dash bit of financial projection, but I can’t quite bridge the gap with your projection??
 
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