Kongregate: the science behind the massive profits of F2P games

On Kongregate, 2.1% of users buy virtual goods. Of these, about 4% (the whales) have spent over $500 and bring in about half of Kongregate's revenue. Top spenders often spend $50K-$80K.

Emily's premise is this: that people who spend lots of money on games (whales) are people who healthily enjoy the games as hobbyists.

Her most interesting points, in my opinion are as follows:

We think whales are bad (but shouldn't) because they spend their money on virtual goods: "Spending $5-­$10k on specialized PC Gaming rigs that improve your skills and enhance your competitiveness is not really that different from spending money for in-game items that do the same. But I bet you all find it a lot easier to contemplate."

We think whales are bad (but shouldn't) because we don't think games are a legitimate hobby: "The bias against games is so insidious that even within the industry we’ve internalized it enough that we question someone with means spending tens of thousands of $s on a game, especially when you combine it with the low value we place on mobile and PC games and especially virtual goods. And so people jump to explanations like “mental illness” or “evil games manipulating players” when the real explanation is that they are rational, wealthy people who are dedicated fans investing in a particular game."

I personally don't agree with her though. We would have no problem with a person spending $10K on software. The issue isn't virtual vs. physical goods. The issue comes down to if games are a legitimate, healthy hobby or not. I would argue that they are not, at least for most of those who are whales. I don't have time to flesh this argument out tonight though.

"..surprise, my game is Competitive Figure Skating. Games are hobbies. People spend large sums of money to compete in physical games, why the stigamtism against digital games?"

--paraphrasing Emily Greer.

Personally I find that a great argument of why freemium isn't inherently evil. Pay-to-win already exists in physical sports.

Japan, however, banned certain freemium games where you pay for increased chance of good rewards in a random check: http://www.gamasutra.com/blogs/BetableBlog/20120525/171124/W...

I.e., 100k paid sales and 10M "unauthorized copies" is still enough for an indie dev to make a living.

If people like a game, they will pay for it as long as you don't have some kind of annoying obstacle preventing them from doing so.

edit: DRM isn't even really a good counter to piracy for the most part. It will be cracked sooner or later (sometimes before the game is even officially released) and the people who wish to pirate it will do so.

The problem I have with many freemium games is for me they have absolutely no lasting appeal. I would estimate that 75% of freemium games I've installed, I may have played a sum total of half an hour and then got annoyed/fed up/bored and removed it. Adverts, replay timers etc. are certainly to blame but what mostly is a turn off for games of these types is there is no soul in a lot of these games.

Take Triple Jump, Don't Step On The White Tile, Avoid The Blocks etc. for example(s). They're like Christmas cracker toys. You play them once or twice, discover how lame they are and throw them away.

While I realise those games aren't meant to be much more than that (and an SEO exercise), there are so many like these on the various app stores and few games that have any kind of depth to them. I would more than happily, and have happily, paid $1, $2 or more for a game that held my interest for longer than half an hour. The biggest problem I have is these throw-away games have been so cleverly marketed or SE-optimised that they make up the bulk of "featured", "highlighted" or "best selling" games and any game with a modicum of depth disappear into the ether, undiscovered. It's frustrating for someone who wants to play a fun, entertaining game, not an annoying, repetitive and uninspiring christmas cracker game.

That's an optimistic statement almost bordering on naive. What the market seems to be moving towards is adding F2P mechanics to $60 games. GTA V lets you buy in-game money for the multiplayer mode. Mortal Combat X has easy fatality mode where you get the famous "fatality" animations after every game (costing $0.20 every time it triggers). Almost every AAA game on the market lets you change the look of your character for a few dollars.

This model isn't as harsh as actually locking out from the game if you don't pay, but it sure does move along the same axis of paying to alleviate a time-based restriction.