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Game developers the world over continue to explore the free to play model, whether it’s a large-scale MMO or an ad-supported casual game. But one of the more interesting free to play experiments of late comes from Facebook application developer David Gentzel, a 24 year old originally from Roanoke, VA. Mr. Gentzel now calls San Francisco home where he is a developer at SocialMedia, marketing guru Seth Goldstein‘s rapidly growing “Social Advertising Network.”

David’s free to play experiment is the incredibly popular Food Fight application.food-fight1.gif

When the game first launched on Facebook, Food Fight players could sign up to receive a daily allowance of virtual cash that could be spent at the Food Fight cafeteria to purchase one of dozens of available food items. Players would then virtually “throw” said item at one of their Facebook friends. If the recipient had the food fight application, a small image of the item would appear on their page.

But recently, Food Fight’s the resourcing model changed, which is when it became interesting from the perspective of free to play revenue models.

As of mid-September of this year, a player’s lunch money account isn’t cleared at the end of every day – it’s persistent – like a real bank account. Additionally, the daily stipend given to each player was removed, replaced by a model where players earn virtual cash by answering short marketing surveys about a wide range of products. Each multiple choice question takes just a couple seconds to fill out with a reward of one dollar of lunch money per question answered. Interestingly, players earn a higher payout when they answer the same question the same way down the road, an attempt to value accurate answers more highly than one-offs.

food-fight1.jpg

Marketers pay for player responses to their surveys, creating a nifty free to play revenue stream and making Food Fight the definitive social networking application for SocialMedia. Seth Goldstein is understandably thrilled about the “craplet” (his words), saying in a recent Business 2.0 article:

People really like to throw piles of poop… So you price the poop high and people have to answer a bunch of questions to pay for it. That’s the future of Internet advertising: throwing shit at people. Literally.

That is it. No scoring, no winners, and no end. Nonetheless, a very successful idea.

How successful?

It takes a bit of conjecture to figure out, but here’s our back-of-the-napkin revenue estimate:

  • There are 36,257 active daily Food Fight users (among 2M registered FF players)
  • Assuming each daily user answered just two surveys (reality is likely higher, as the lowest priced item is $2 – requiring two surveys to be completed)
  • Assuming each survey response cost a marketer 25 cents (reality is likely lower, but Facebook polls already charge clients 25 cents/response)
  • This would result in $18,128 of revenue per day
  • Or ~$6.6M of annual revenue for SocialMedia, from one app

That is no small potatoes for an application that likely cost less than $100k to develop.

Since Food Fight introduced surveys, food prices have increased significantly as the game gets balanced. Prices for food items range from $2 to $11 virtual lunch money dollars. For instance, at $10 lobster is significantly more expensive than most items with only Bubble Tea having a higher price tag.

Consider the following price comparison from June 25th of this year till October 26th, a four month time period.

  • Haggis = $1.75 / $3.40 (194% increase)
  • Orange = $.50 / $2.30 (460%)
  • Banana = $.50 /$3.25 (650%)
  • Sucker = $.25 / $2.30 (920%)
  • Shrimp cocktail = $1.75 / $3.40 (194%)

So according to these numbers Food Fight items have increased in value by an average of 484%. However, in less than a minute a player can answer enough survey questions to buy even the most expensive item – keeping the game easy and fast to play, while deriving more and more potential revenue from the same virtual items.

Going Forward
Given the fad-ish, viral-flocking nature of social networking apps, it will be interesting to see if Food Fight can maintain and grow their numbers long enough to start capitalizing on this potential revenue stream. In the meantime, SocialMedia is using Food Fight as a beta test for their social advertising network as a whole (and a host of similar apps) – electing not to charge for most, if not all, of the marketing surveys they host. (F2P.biz’s request to SocialMedia for clarification on the “revenue stream, on or off?” point was not answered before this article was published).

Regardless of when SocialMedia turns on the money tap, it’s clear they’re onto a high-ROI free to play revenue model that traditional game developers could do well to emulate.

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NCSoft the MMO giant has credits that include the massively popular Lineage, Lineage II, Guild Wars, City of Villains/Heroes and the upcoming Tabula Rasa. But Dungeon Runners, one of only two free-to-play games from NCsoft, is unlike most of their other products. DR is based on a tiered subscription model, where users can play for free, or opt to pay a monthly subscription ($4.95) to access upper level content.

Free To Play spent an hour with Dallas Snell, NCsoft’s Director of Business Development, discussing Dungeon Runners, the free to play model and the future of NCsoft. Dallas has been a prominent figure in the games industry since 1983 having to contributed to over 20 titles during his time at Origin and EA. After a short sabbatical from gaming, Dallas returned to the industry in his current role based in Austin, Texas.

The earliest version of Dungeon Runners began as a different project entirely back in 2001, before being put on the back burner, where it remained until 2002 when it was dusted off to be a game titled Exarch. That too was eventually put to rest until Dungeon Runners was resurrected in its current incarnation about 18 months ago. Today the team consists of over a dozen internal employees with a heavy contingent of art outsourcing.

The decision to resurrect Dungeon Runners and make it a free to play game (versus a full retail MMO) came from NCsoft CEO Robert Garriott and Chris Chung, the former ArenaNet General Manager, who operated out of Korea at the time and therefore had early exposure to the free to play model. Chris is back in Austin now and looking to push NCSoft further into casual MMO development, replicating the success of Korean companies like Nexon.

There’s been speculation that NCsoft chose subscriptions as the primary revenue model in Dungeon Runners due to a belief that North American players preferred that model to microtransactions. However, that was not the rationale for the subscription decision. Instead, Dungeon Runners’ optional subscription fee was chosen simply because a microtransactional model wasn’t yet set up in the Dungeon Runners code base. To remedy that, the team is currently working on getting microtransactions running within Dungeon Runners before the game is launched in Korea.

Dallas made frequent mention of NCSoft’s embrace of “Web 2.0” development philosophies. In particular, NCsoft’s use of the free to play model, Dungeon Runners as a testing ground for future products and the company’s strong commitment to reducing barriers to entry for all NCsoft products were all offered as proof of the company’s Web 2.0-ness.

Dallas often referred to Dungeon Runners as an experiment, saying that although Dungeon Runners currently utilizes subscriptions, within a couple of months in-game advertising will become a part of DR. In fact, the ads are already in the world, but visible only to testers, NCsoft and Double Fusion (the in-game ad provider). F2P.biz was asked not to reveal how the ads will be implemented, but expect an announcement from NCsoft soon. If all goes well with the ad experiment, Dallas says NCSoft will consider the possibility of scrapping Dungeon Runners’ subscription fee all together.

On the other hand, by their own account NCSoft is seeing higher than normal conversion rates with their current subscription set up, so perhaps Dallas won’t be so quick to abandon it.

What are those great numbers?

Among active users (online within the last month), Dungeon Runners has a high free:paid ratio – i.e. there’s a larger proportion of paid to free users than among most f2p games. Dallas cites Runescape with a 5:1 ratio (free to paid, online at any given time), and says that DR is hitting 3:1, or after content updates, as high as 2:1.

Additionally, NCsoft expected a monetization rate of 1-3%, but their numbers are reportedly “significantly higher” [Dallas declined to give a specific number]. Dallas claimed not to know the cause of the higher monetization rate, but one contributing factor may be that the large majority of in-game activities or items are available only to paid users. Dallas acknowledged this and went on to say that the dev team is strongly considering raising the ceiling for free users as currently only 1-2 hours of free play will result in players hitting the ceiling with respect to what they can get for free.

Further to NCSoft’s recently announced plans to release free to play content on the Sony network, Dallas talked about his company’s goal of becoming “device agnostic” in order to break down the segregation of gamers between platforms. NCsoft plans to build their own cross-platform community service, with friends lists, inter-game messaging, and other features similar to Xbox Live. NCsoft also intends to release desktop, facebook and mobile widgets to extend gamers’ experience.

According to Dallas, NCSoft thinks of Dungeon Runners as a “MMO light” or a game that straddles the gap between casual and core gamers. In Dallas’ opinion, the success of products like Runescape makes it likely NCSoft will develop even more accessible games – perhaps even browser-based – to further minimize the barriers to entry.

With 40+ data probes plugged into Dungeon Runners, NCsoft approaches the product as a testing ground for ideas to be built into other games. The probes measure everything from time played, rewards frequency, item usage, leveling curves and dozens of other useful metrics. Outside of the game, account-level metrics are tracked in a publisher module that will allow NCsoft to track and analyze a single player’s activities across all their products.

In Dallas’ eyes, retail may soon become “extinct” with digitally delivered gaming ruling the day. He spoke candidly about the struggles facing music and film and how games are uniquely structured to develop their own delivery solutions. To that end, products like Guild Wars and Dungeon Runners are blazing trails for NCsoft.

Finally, as already mentioned, a recurring theme from Dallas was his commitment to lowering the barrier to entry in all NCsoft products. As evidenced by their free to play experiment, NCSoft strategy is to grow their customer base as widely as possible, then monetize the largest possible proportion. Most flatteringly, Dallas said his officemates all had printouts of F2P’s article, Top 10 Ways to Reduce Barriers to Entry, and were treating it as a white paper of sorts.

Thanks to Dallas Snell for his time and to Opal Lertutai, NCsoft PR, for setting us up.

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First myspace conquered the world. In its wake came Facebook. Now, even your best friend’s mom has a Facebook account.koinup.jpg

But what’s next? For some it will be Koinup.

Koinup is the first social networking site for your virtual life. Not exclusive to Sims gamers, Second Life devotees or WoW weekend warriors, KoinUp is a place where you can give your multiple virtual world identities their own social network.

Koinup was founded in March 2007 and has thus far chosen to focus on Second life, Imvu, WoW and Sims 2 – but are not exclusive to these worlds. The most powerful feature – some sort of integration with these games – hasn’t happened yet, so Koinup instead pledges to be a place to document all your virtual world activities.

I signed up for an account and was very impressed with the ease of registration. I think it tool a minute and a half total with no frustrating or invasive queries for personal information. It was also fun to get the user name I always try and grab on new sites – without resorting to a 36 letter mutation of an English word or a numeric sequence after the handle of choice.

Koinup’s design is fairly straight forward, although not as intuitive as it could be. Where Koinup stumbles is the English language. It doesn’t have the easy colloquialism of most Web 2.0 sites. A couple snippets:

It’s very easy to use and it allow to anyone who have some ideas to tell stories.

Koinup takes your privacy very seriously. For more info, give a look to our Privacy Policy.

But the founders, Italians Pierluigi Casolari (CEO) and Edoardo Turelli (CTO), likely speak their native language better than I. Casolari pulls double duty as the site’s content creator, but there’s room for a translator or English editor on their team.

Koinup allows users to upload videos such as Machinima and tutorials, associated still images and still image series referred to as storyboards. One of the great features Koinup has incorporated is CrossPosting, or the ability to load pictures onto Flickr and other photo sharing sites from within the Koinup uploading system. At this point, CrossPosting doesn’t work with video or storyboards but perhaps that will come next.

One aspect of Koinup that stood out was the site’s emphasis on “Coolness” (their word). Obviously the idea of karma or kudos or cred has been present in social networking sites almost from day 1, but never has it been tacked on quite so blatantly. Site members themselves in addition to the media they uploaded are ranked on coolness. The coolness of media is determined using the usual vectors like views and comments, but member coolness is determined with a “unique” metric.

Members are ranked on coolness based on the popularity of their work (naturally) but also by the number of times that member has flagged offensive material in other people’s profiles.

This is a bit of a head scratcher. It’s akin to incentivizing programmers for finding bugs. Obviously peer moderation is crucial in a user created content environment, but such a direct rewarding for overzealous policing seems destined to backfire.

Ideas like Koinup are inevitable, but Koinup is in need of much refinement before it serves its audience well. I’m looking forward to the next iteration of an avatar social network – whether it’s Koinup or not – as we’re certain to hear a lot more about social networking for the metaverse.

Three questions, a couple that Koinup might answer:

  1. Do people use similar avatar personalities in different worlds?
  2. How many people use multiple virtual worlds concurrently?
  3. Couldn’t Facebook or myspace easily incorporate avatar profiles – either on their own or as a section of your primary profile – thereby eroding the market for standalone avatar social networks?

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Actiontrip has just posted a 2 pager on what it believes are the five most popular game communities, presumably in the world. Although the list isn’t ranked and doesn’t include any of the bigger Asian success stories, it has some interesting numbers.

Here are some highlights.

On CounterStrike:

Last we checked, the CS community had just over 174,665 active servers, with approximately 276,552 gamers playing online at the time we did our research (so just over 2 players per server, eh? – Ed). If the statistics on Steam are to be believed, this should translate into roughly 9.423 billion (yes, that’s the correct amount) minutes of play time per month.

On Runescape:

Recent research indicated that 13.1% of all PC gamers have played Runescape at some point throughout June 2007, with the average RuneScape player spending 673 minutes per week within the game. After this RuneScape became the 5th most played PC game just behind Blizzard’s World of Warcraft and games like Halo: Combat Evolved, Halo 2 and, of course, The Sims.

On Halo:

The most recent update showed that almost 12,706 players were online in Halo 2 at the time when we checked. Also, around 261,820 unique players were registered, with 688,136 matches logged (data from the last 24 Hours).

The lack of Asian representation likely stems from the all-North American sources used for the article: NPD, Steam, Bungie.net, Google Trends and Nielsen Media Research.

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