If you believe the boss of developer Crytek, then games consoles are facing a crisis.
The firm's CEO Cevat Yerli says that its three upcoming console titles – Homefront 2, Crysis 3 and Ryse – will be its last 50 products. After then it'll focus all its efforts on creating free-to-play games.
And he is adamant that if Sony and Microsoft don't adapt to this new business model, then the console market will die.
This will be the last console generation,” he tells MCV.
If consoles don't join free-to-play gaming aggressively from now on, then it will be outpaced by PC and mobile. If they don't adapt they are not going to survive.”
Companies have tried to engage the platform holders in the past with its free titles. Cambridge-based Jagex has attempted to bring its free MMO RuneScape to consoles, but has met resistance.
Free-to-play would have been huge on consoles if the console owners had embraced it,” says Jagex chief marketing officer David Solari.
It's still likely free-to-play will be a big part of the console offering in the future but they will need to adapt and be willing to allow their users to play with players on other platforms which seems to be a step too far currently – this was certainly the case for us when we were talking to them about RuneScape.”
Sony and Microsoft are not oblivious to free-to-play. Microsoft has developed several freemium PC games, including Age of Empires Online and Microsoft Flight. And Sony's PlayStation Home virtual world is built on that model. Only Nintendo has resisted the micro-transactions entirely – although the platform holder has developed free software in the past.
Yet this is beginning to change this Christmas. Both Xbox and PlayStation are making more tentative steps into the free-to-play market. Xbox has launched F2P game Happy Wars (although it requires an Xbox Live subscription so partially misses the point).
But the big one comes from Eve Online developer CCP, who are creating a free micro-transaction-based FPS called Dust 514 for PS3.
Sony working with CCP and making that game is a great step forward, and they should be applauded,” adds Yerli. If Sony embraces free-to-play as a major way for PlayStation, that could be the key console. I would love to see a generation that supports free-to-play, because we will support it.”
David Reid is the chief marketing officer at CCP, and in many ways he is the ideal candidate to discuss freemium on consoles. Not only does he have extensive free-to-play experience from his stints at Trion Worlds and NCsoft, he is also a former marketing executive from Xbox.
A lot of the big disruptions in our industry start on the PC,” observes Reid.
It's where online gaming began. It's where genres like FPS were born. Clearly, it's where the MMO was born. But over time some of these things get much bigger on the console and our belief has always been that free-to-play is going to be big on the console. We're very pleased to be in a position to be first with a big triple-A game out there. We look at 2013 and expect there will be a lot more. It won't be such a new idea next year.”
Early signs suggest that Reid is correct. Shortly after we spoke to CCP, Sony announced that its SingStar series will be adopting a freemium-style business model.
Reid believes Sony's aggression in this area will pay dividends for the platform holder.
It is always natural that the challenger in the console business is going to be more ambitious and take a few more risks than the leader. Last generation I was at Xbox and we were having our arses handed to us three to one. And Xbox was the one that was trying to do these crazy new things, what with Xbox Live and working with developers and their different ways. Five years later, things have changed and now Sony is being more aggressive and thinking more about how things are going forward. It is a very cyclical business and it feels like we are coming around to another big turn again.”
There are still some challenges around free-to-play on console, such as the need to migrate customers from one generation to the next, plus the ability to play with gamers on other platforms.
But these issues are being addressed. Sony and Microsoft may be late to the party, but they're catching up.
Reid concludes: I think in the console space it was hard for some of the big publishers to get their brains around it until they saw some of the PC success stories, like League of Legends and World of Tanks.
So now the console guys are saying that this is a big opportunity. You can argue that if they had a way to monetise Call of Duty differently, then you'd have a lot more people playing and a lot of people willing to pay more than $60.
It is a bit of a foreign concept, having a game with five or 10 million players, with 80-plus per cent never spending any money. In the console space that has never happened. But we are seeing the change happen. We are living it right now. It happens faster on the PC than on the console, but the console guys are watching it very closely and will be involved a lot more with the next generation.”