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Monetize your free-to-play online game by adding holiday spirit

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Over the past few years, we’ve seen a big jump in the number of free-to-play games we support. Hi-Rez Studio’s Global Agenda was one of the first MMOs to move to free-to-play in 2010. Their next gen shooter, Tribes Ascend and battle arena, SMITE are two more examples that are shaping up to be enormously popular non-subscription based games.

In this increasingly free-to-play world, the ability to add seasonal content to games represents a golden opportunity for gaming companies to drive incremental revenue this holiday season. Adding out of the ordinary but functional items can be a good way to drive one-off purchase transactions, while allowing players to be unique and stand out in their virtual environments. For example, rather than using my default two-handed axe in Infinity Blade 2, I can buy a gigantic golf driver (Big Bertha?) to smash the surprisingly fragile bodies of orcs, giants, and witches.

Before we get into some specific in-game ideas, let’s review some economics companies like Hi-Rez consider as they build and maintain their free-to-play games.

The Economics of Free-to-play Online Games
In the free-to-play world, there are essentially three direct drivers of revenue:

• Daily Active Users (DAUs) – DAUs are the average number of unique users actively playing the game in a day. There are many variations of this metric – MAUs (monthly active users), MUUs (monthly unique users), MUPs (monthly unique payers), “Stickiness” or DAUs/MAUs, which measures what proportion of users come back every day to play, and the list goes on.
• Conversion Rate – this is the number of active payers as a percentage of active users.
• Average Revenue Per Paying User (ARPPU) – revenue brought in per paying user.

Above all else, consider that players won’t buy items in a game that they don’t care about – i.e., not only does the game need to be interesting and fun, but players also need time to get into the game. At GDC Online this October, Emily Greer, the COO of Kongregate, stressed the point by saying that they only saw single-player conversion rates move up meaningfully after seven or so gameplays in their browser-based universe. Multiplayer upticks took even longer.

We’ve taken a shot at building a basic forecast model with these metrics (and a few more) for you to play around with if you’re thinking about starting your own F2P game or building out a forecasting model. Let us know if you think we can tweak this to make it work better.

In-game Purchase Ideas
Now with the economics out of the way, here are some interesting ideas we’ve found some online gaming companies using to drive free-to-play cheer this holiday season:
• Adorn your 30-ton BattleMech with Christmas lights
• Zynga’s virtual goods = real-world charitable gifts campaign
• Rift’s Fae Yule quest offers up some nice holiday gifts
• Protect your Stronghold Kingdom villages when you go on vacation this holiday
• Star Trek Online lets you fight snowmen in Q’s winter wonderland
• Bingo Blitz has a Winter Wonderland Slots Room that’s very nice

I also polled Internap’s marketing team (and Bindu’s League of Legends fanatic – thanks Spencer!) for some additional holiday ideas to pass along. We promise we won’t claim intellectual property rights if you decide to use any of these gems:
• Beat back a Black Friday zombie hoard
• Join a Workshop-Elf hero unit
• Drink an Egg Nog Health Potion
• Mull your own Creeper
• Santa Nautilus
• Gift-wrap Mob Drops
• Wield Furby-adorned Heavy Clubs

What are your ideas for driving revenue during the holiday season? For more insights on the online gaming industry, check out our ebook, and may your micro-transactions be merry and bright!

About the Author

Andrew McBath

Drew leads Internap's Product and Strategic marketing group - and until the big bosses find a worthy replacement (impossible?) - he also moonlights as our head of Investor Relations. Prior to Internap, Drew held finance and consulting positions with AT&T and PricewaterhouseCoopers.
view all posts by Andrew McBath
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