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F2P & Coercive Monetization Models
Warley
Member UncommonPosts: 508
Ramin Shokrizade, a highly intelligent professional in the field of monetization models for games, provides a very good in-depth look at coercive free-to-play business models:
http://www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/The_Top_F2P_Monetization_Tricks.php
Although he primarily talks about Candy Crush Saga and Puzzle and Dragon, the article gives great insight into the free-to-play market. Of primary note, he discusses how free-to-play models target younger audiences that haven't been able to fully develop their pre-frontal cortex:
"As discussed in my Monetizing Children paper, the ability to weigh this short term “pain relief” vs. the long term opportunity costs of spending money is a brain activity shown by research to be handled in the pre-frontal cortex. This area of the brain typically completes its development at the age of 25. Thus consumers under the age of 25 will have increased vulnerability to fun pain and layering effects, with younger consumers increasingly vulnerable. While those older than 25 can fall for very well constructed coercive monetization models, especially if they are unfamiliar with them (first generation Facebook gamers), the target audience for these products is those under the age of 25. For this reason these products are almost always presented with cartoonish graphics and child-like characters."
I'm willing to bet that there is a correlation between free-to-play support primarily consisting of 25 and under players while pay-to-play support primarily consists of people 26 or older. Of course, this is a hypothesis, but it is really based upon the 'fact' that the pre-frontal cortex plays a large role in removing the layers purposely created by free-to-play developers so players have a harder time figuring out how much they're really spending and the value of what they're buying in terms of real world dollars.
Just so you guys know. Candy Crush Saga and Puzzle and Dragons are two of the biggest games in the free-to-play market with some staggering profit margins. Both have highly coercive business models, and a lot of the gaming industry will be shifting even further towards this.
One of the most truly unethical elements of the business models these developers create is the reward removal where they purposely create a highly challenging boss or completion task at the end of a particular play through (like a dungeon or quest) and then make it where the player knows they'll lose their stuff. However, for a 'gem', 'diamond', or whatever premium currency they offer, the player can choose to reset the outcome and try again. Each reset costs premium currency, which -in turn- costs real money.
This is something you free-to-play supporters really need to think about, and need to also understand if you really want the industry to move further down this path.
Comments
I'm willing to bet that his asseration that free-to-play support primarily consisting of 25 and under players while pay-to-play support primarily consists of people 26 or older is completely false and therefore any conclusions based on it are false as well.
The rest of his argument is just about bad f2p games and bad f2p design.
Couple this with real-money exchange items like PLEX or REX or whatnot .. already rumblings about taxing virtual->real money transactions, how long before the IRS wants you to enumerate your WoW/EVE/etc inventory to see how much they can charge you for it?
That was my hypothesis based upon the scientific study of the pre-frontal cortex, and the fact it doesn't develop fully until the age of 25. You'll also notice that it is around the age of 25 that people seem to act much more mature.
Now, you say it's completely false. Could you point to any studies or data that says this since you're stating that as a fact instead of an opinion? Again, above, I'm only presenting a hypothesis which is based upon a fact about the pre-frontal cortex.
Well, they can't tax or charge you in WoW since Blizzard owns all in-game currency, items, and even your characters. You don't own them. It's against Blizzard's policy to sell in-game currency for real life money. The question isn't whether you can be taxed on your in-game currency, but if you're committing fraud for selling in-game currency that isn't your property.
The design of F2P monetization schemes will always rely on intensive psychological manipulation and player profiling.
Whoever has the responsibility to squeeze more profit out of any given game simply HAS to rely on finding out which "buttons to press" to make players part with their cash. Therefore a "made for F2P" game will have it's game play designed around the Cash Shop. Everything that happens has to support the Cash Shop items, and it should all be subtly but unavoidably be "encouraging" spending.
Of course, entertaining players is still important, but players must be constantly reminded of just how much MORE they would enjoy themselves if they regularly spent money in the Cash Shop.
and that is the marvelous of most f2p games, you don't even know you are coerced to do so
Oh right, it's D3 that has the RMT stuff. Rift, EVE, Fallen Earth ... probably numerous others. But with since with RMEX items establish an equivalence for currency and thus item value, how long before you don't even need to sell them before they're considered taxable investment?
OTOH, how long before we can claim ownership of items "of value"? Game companies might want to watch out for this one ... can't just shut down servers (or even ban accounts!) or you're legally stealing from players (as opposed to just actually stealing, as it is now).
And yet I have not paid a single cent to any of the games I have played for free. Convenient how some people actually have self control huh.
Every whale I've ever met has been a younger "adult" so while that is purely anecdotal evidence it does make me want to agree with your opinion. I'm sure there are enough exceptions to give anyone a solid argument it still doesn't mean that isn't their target.
It would make sense to target them though. That is the age where people tend to be more irresponsible with money and training younger gamers to think this is how these games work makes that behavior more acceptable as they get older. Part of the problem with f2p and older gamers is they're used to another way and see how much more these games can cost.
It's the same reason why smoke companies target the youth market. Adults either smoke or they don't. Very ..very few begin as an adult.
Some of the iOS f2p games (Hero of Destiny .. has that mechanism. If you failed the last boss, you will lose all the stuff you gain so far in teh dungeon, and you can retry by paying.
Guess what i did?
I move on to some other games.
The beauty of a free market is that i have choices, and don't have to play any game with coercive monetization models.
For example, i am more than happy to play Marvel Heroes, where there is no such bs, and you pay only for access to heroes, and costumes.
The thing is, young adults, typically have more disposable income because on average so they would be apt to spend more, they dont have as many responsibilities our outstanding debt beyond college. Heck when I was living at home I had tons of disposable income, now that im married and paying rent, I have none, If I had a a kid, then even less than none.
I'm not sure I'd call it disposable income at that age but I agree with your point regardless. When you hit the point in life where it is actually disposable income you tend to have learned the value of a dollar as well and don't waste it on large quantities of nothing.
You and I are arguing different things.
I am not arguing that the pre-frontal cortex undergoes development into the mid 20's.
I'm arguing the assumption that free-to-play supporters consist primarily under 25 and pay-to-play supporters consist of over 25. I also stated I'm willing to bet, this does not mean that it is actually a fact, just that I'm willing to bet it is.
You have legitimate data (pre-frontal cortex) and then make a statment posted as fact about game statistics (under 25 for ftp and over 25 for p2p) then go on to link the 2 stating that maybe that is why f2p are primarily under 25. But you did not give any evidence for your 2nd statement, you havne't shown that showing that f2p is primarily under 25 and pay to play is over. since you haven't shown that, there is no link between the two.
I don't think f2p is primarily under 25 and pay to play is over 25 - that is the point that I say is false.
In other words, you've stated that f2p games are primarily under 25 and pre-frontal cortex may be the reason why, but you did not show that f2p games are primarily under 25.
If you want to argue that there is a link between the two then you first have to show that your 2nd assumption is correct. You can't talk about possible (not definitive) causation or correlation until you establish that your premise is correct.
This is an interesting set of comments.
Items in games like D3, Eve, and so forth should 'absolutely' be taxed based upon current laws. Simply because the company's service is a platform to buy and trade items, and those items have a real life value allowed by the companies; and the allowance of sales.
Even though people attach a value to WoW currency Blizzard explicitly states they own it and forbid the sale of the items. Therefore, it's not legal to sell those items and they should -in effect- have zero worth. What's worth something is the service that you pay for, and that service is owned by Blizzard and licensed to you. Blizzard pays a tax on the money collected from the service.
I leave the game behind when I feel like I have to pay to keep moving, but that is me, and if most people did the right thing the world would be a better place, but that is not the case, so saying that is not a problem to you don't mean it not a problem
Couple this with real-money exchange items like PLEX or REX or whatnot .. already rumblings about taxing virtual->real money transactions, how long before the IRS wants you to enumerate your WoW/EVE/etc inventory to see how much they can charge you for it?
Well, they can't tax or charge you in WoW since Blizzard owns all in-game currency, items, and even your characters. You don't own them. It's against Blizzard's policy to sell in-game currency for real life money. The question isn't whether you can be taxed on your in-game currency, but if you're committing fraud for selling in-game currency that isn't your property.
Well, in S.Korea they already tax virtual item sales, and there is spot on your annual tax form for it. Taiwan is going the same way. So, whether you believe the companies own the items or not, when the countries start taxing income from selling those items, it doesn't matter.See your argument is fine, your not stating that it is fact your recognize it anecdotal and based on your experience. I can't argue your experience
If f2p actually do consist largely of under 25 than the OP's hypothesis is reasonably worthy of a closer look, but we haven't establishd that f2p primarily do consist of that demographic.
I apologize. I should have worded my response better. I didn't mean to make it sound like I thought you were arguing about the pre-frontal cortex. I knew you were arguing against my hypothesis (which, I believe, you thought Ramin made in his argument). That was my idea. Now, here's why I came up with that idea:
If you compare the value of a $15 subscription in a P2P game to spending $15 in a f2p you get far more value for your $15 in a subscription. It's just basic common sense. You have a relatively (think WoW and the $20 pony) completely unlocked game compared to a partially unlocked game. Having played P2P games since 1999 this is completely clear to me as soon as I jump to a F2P game. I'm 34 now.
But, the ironic part in all this is that people -that I've talked about this- that started playing MMO's at a younger age before F2P and are still under 25 seem to always prefer subscription games. They only switch to F2P games when they have no money or means to pay for the subscription games. They recognize the monetization immediately because they have a previous P2P game to compare to the F2P game and it's content and 'value'.
Now, let's look at some freemium games like DDO, LoTRO, and possibly even SWTOR (which I haven't really played to any extent). The best value in each is... the subscriptions offered in them.
There is one fact about F2P developers which also hints at my idea having legs: they target 25 or under.
If you don't mind me asking, how old are you? Or, if you could, are you over 25?
If you don't mind me asking: are you over 25?
I am 25 this year.
Virtual item sales isn't the same as in-game assets. It's the sale action itself not the items themselves that is getting taxed.
I didn't state mine as fact either. I clearly put in the word 'hypothesis'.