In this extract from his new book Free-to-Play: Making Money From Games You Give Away, consultant Will Luton speaks to former Zynga CEO Mark Pincus – who stepped down last month – about the finer points of games monetisation.
Will Luton: Free-to-play has ostensibly allowed Zynga to exist. Why is it such a successful business model?
Mark Pincus: In 2007, when we launched Zynga, I thought that games were like search before Google. It was a business, an industry that was considered mature and over. And games hadn’t even gotten started.
Google had the same experience: It was like the fifteenth or the twenty-fifth search engine to appear and believed search was already over, or so everybody thought.
But Google showed us that search could be so much more useful in our lives that the company ignited, obviously, the search revolution.
Similarly, I believed that what had kept games from being a mass-market activity was they asked too much of the users, of the players. And I didn’t believe it was a lack of demand from people to play. I thought the bar was too high to play. And so, like so many other people I had to kind of give up game playing for a while, because the cost was too high, not so much the economic cost, but the commitment was too high, whether it was consoles or even online, downloading, or even going to a website. It turns out that games, in a lot of ways, are like comic books, in the sense that some people will seek out a comic book store and buy comics. But most people, even if they enjoy comics, can’t rationalise spending time during the day sitting with a comic book.
However, if there’s a comic strip in the newspaper that they trip over, they can enjoy it, find it through serendipity, and add it to their day. So, I thought, what if we could lower the barriers to play: Take out the price, take out the download, take out searching and navigating to it, and even take out the on-ramp of having to learn it and having to go through tutorials and everything to play a game.
In the beginning I said, if you need more than three clicks to know what it is and why you want it, it’s not going to make it in the real consumer market.
What we saw was that if we put games where the people were, made them free, and made them easily understandable, people would play. Beyond that we saw that if we made them short session, made them not live and not require live engagement, and made them social so players wouldn’t just try them, they would stay and play.
Fairly early on I realised that when you take the barriers down to zero, you make them free. We can’t make it any cheaper than free. But then after that we could start to actually offer people value back. We then started attacking the concept that games are a waste of time and we could deliver what I think of as ROI (return on investment), as a social ROI or an ROI on your time.
Now, if you give us 15 minutes, we can give you skills. We can give you progression. We can give you enhanced relationships, not just entertainment.
So I thought that there was this fundamental value paradigm and equation that we could keep innovating on and improving for decades to come, because you can get the barriers and the cost down to zero. Then maybe once that’s done, you can go past zero and start going into the plus category, the credit category. You can get rid of the debits on one side and start adding credits on the other. So what I realised was that at some point you’re getting people to try games and to play games.
Eventually, if you’re really successful as an industry, you’re competing with whole other life activities. There’s a level of entertainment, OK? But people have less and less time for entertainment in their lives, so can we get people to multitask and play games while they’re watching TV or movies, or doing other things? Can we make play so bite-sized that you can put it in these found moments? Can we make play so bite-sized that there’s, with mobile now, so many moments in your day that you’re currently filling with pure productivity, not pleasure and entertainment.
Right now – and I say this to our new hires at Zynga – smartphones allow us to be productive every waking moment of the day. Most of that productivity comes in the form of e-mail, text messaging, one-on-one communication, social media or browsing, and web browsing.
It means that also our opportunity cost of doing anything other than being on a smartphone has gone up. So in the 1950s, 60s, 70s, or 80s you would come home from work with a briefcase containing printouts to read, and other than picking up the phone and bothering somebody, you couldn’t be that productive. Now you can be productive every waking moment, which both helps and hurts us as a medium.
On one hand, it helps us because there’s so many more moments that we can also fit into, because we’re not tethered to the TV or the PC. On the other hand, we’re also competing with other forums’ productivity. As an industry, we will kill it against one-way video entertainment, because it asks too much of you, until it also gets bite-sized and multi-taskable.
Where we go from here is that we could start to give you something that’s beyond entertainment; for instance, we could make you a world-class poker player that could compete in a world series of poker; let you make a new friend, get married, or get out of calling your long lost relative.
Luton: Is free-to-play a better deal for players than paid content?
Pincus: Well, free-to-play is for sure a better deal, especially when you think about the fact that anywhere between 90 and 98 per cent of players never pay. So it is a better deal, but you have to remember that for most of those people it may not be a better deal, because they weren’t buying the paid content.
So I don’t believe that free-to-play and free and social games have actually cannibalised the video game industry. Just like I don’t believe that Craigslist killed newspapers. I think it was doing just fine on its own. Newspapers were killing themselves, and Craigslist and eBay actually were good for them. They expanded peoples’ participation in classified ads and people saw value.
Free-to-play gaming has been a net positive for the whole gaming industry, because it’s introduced gaming or reintroduced it to millions of people. So it’s hard to say it’s apples-to-apples, that it’s a better deal on that. But yes, I think that free-to-play gaming is a great deal for people.
Luton: What do you think is the key to making a free-to-play game a good free-to-play game?
Pincus: I don’t know. To me it’s not what makes it a good free-to-play game; it’s what makes it a good mass-market game. The reason that’s the real point for me is that a free-to-play game for the most part, but not always, needs to be a mass-market game.
Now, we can have different gradations of mass market. You could have these Card Battler and CCG games. I mean you can have games that only have an audience of a million people, and they can make very good money for a developer.
But a million people constitute a big game. To say it could be as small as a million people is saying how big an audience you have to focus on with free. I’d be surprised to see a free-to-play model work for games that only reached an audience of 100,000 people. So the game has to be pretty mass market, even if it’s a hardcore game or a niche.
What makes it great? It has to have an easy, compelling on-ramp. Part of what makes it great is that it has to fit within a mass-market marketing model, which means that it has to be able to spread virally or spread through advertisements or some other kind of promotion. And that means that it needs to prove itself and its engagement for people extremely quickly. It’s probably not going to be a planned purchase, like a console game.
To read this interview in full, check out Free-to-Play: Making Money From Games You Give Away by Will Luton, available now