F2p reached its limits?

The ceo of SuperData research claimed that f2p reached its limits:


I tend to disagree. Some reasons here.

First there is a lot of talk about families and kids. If you ask big f2p games about their audience then you will notice that families and kids are not their audience. In fact most f2p games have a pretty mature audience. PvP games tend to address 90% males 16-25 years old while MMO RPG's and strategy games have an average age beyond 30, some of them even 35+.

F2p is not for kids. Do not try to target kids with f2p games as it won't work revenue wise. Kids are to a large extend non payers and that has obvious reasons (no access to payment systems). And believe me or not: this is good.

The talk also claims LoL has a 11% worldwide market share. Having $681 million yearly revenue thus us hard to believe. I can name 10 games who have more revenue, some even double than LoL. Add all the medium and smaller ones then LoL can't even reach 3% worldwide market share.

Most companies analyzing the f2p market fail to notice that older good f2p games are still around with a healthy audience and revenue. If you check just the genre MMO RPG's: there is an endless number of games available and every week more are coming to the list. Most of these games you never heard of.

Furthermore the analysts underestimate the mobile f2p market. As most of you should know most revenue of App Appstores on mobile are coming from f2p games (not apps, not paid apps, just games). Considering that the number of mobile users will double in the next 2 years to 3 billion (and that is a conservative number as the growth is exponential) we soon reach a point where the worlds population own smartphones and control their lives with them. This means the good old and new f2p games on App stores will also double in revenue.

And last but not least: the audience of f2p games is not a fixed amount of people. It is not static. In fact it is a very dynamic group which loses people all the time (no interest anymore, death, job, etc.) and gain many people all the time as new humans are born every minute and come to the age to play on mobile. So no, there will NEVER be a saturation in target audience.

Often analysts make the mistake of taking a sample of a few months as a forecast basis for the future. This is of course a basic approach but fails to take trends into consideration. It also fails as it usually only takes a sample of the market and forgets how large the f2p market really is: it includes mobile, client, browser games and territories like Asia and Japan. And some territories are just not explored yet in f2p and will grow really fast really soon (like India). there you go, 1b people added to the audience.

All in all I tend to disagree for the above reasons. I say that the f2p market will continue to grow and dominate all other business models on most formats so that sadly we might see some type of genres, game types or formats diminish over time simply because it doesn't make sense for companies who invest in games for revenue to go the risky route.


This Blog isn't dead

I am just very busy at the moment, sorry for the lack of updates. I am also flying to Casual Connect soon to hold my talk about League of Legends. I hope that between there and GDC Europe / Gamescom I get time to update here.

Cheers Teut


Why do you forget

People forget online games are 35 years old. People also forget that commercial MMO's are 18 years old. They also forget that plenty of professional research has been done decades ago.

So I am always surprised that f2p publishers and their ceo's, designers or producers present surprising new discoveries about their players although it has been written decades before.

Let me give you some sources everyone should read completely before even claiming the "news" is yours:

The Daedalus Project

By Dr. Nick Yee the one and only long term research about player behaviour in online games - and plenty of other topics. Must read for everyone working in online games.His research is so important that he now works at Ubisoft doing exactly this: researching player behaviour in online worlds.

Edit: Link to his player behaviour paper: http://www.nickyee.com/daedalus/archives/pdf/3-2.pdf

Dr. Nick Yee is one of my mentors of everything I know about online games.

Designing Virtual Worlds by Dr. Richard Bartle

He invented the thing you know? Reading the book has to be done with a grain of salt though as he is hooked in the old world. Still his research he has done at the University of Essex is so fundamental that it should be fundamental knowledge for everyone in online games.

Raph Koster

My 2nd mentor is Raph Koster, designer of Ultima Online, Star Wars Galaxies and many more. He talked about online game design at conferences 2 decades ago but not many people remember that. Most of his talks are still available on his website. Worth a read. Or two.
True treasure and could be seen as laws of online game design:


Any of this new to you? Then you should bow to the wisdom of the above three people and humbly thank them for their openness!

MMO's where invented here


Lack of Updates - but!

Sorry for the lack of updates but I am pretty busy either visiting conferences or assisting my customers. So Ubisoft Blue Byte released two further titles into open beta you might want to try:

Panzer General Online


Might & Magic Heroes Online (German only, English follows soon!)

Cheers Teut


F2p is not a genre

I discuss a lot about the design & business side of f2p. Often enough in these discussions people mix and match games and argue with them only because they are f2p - right?

If both are f2p they should be comparable yes?

Well - no. Let me give an example. I use Assassins Creed Black Flag to show open world game play while you come up with the retail version of Angry Birds to counter my argument. Both are retail games right? You would find that silly wouldn't you. Both are targeting different audiences and are different genres.

So why oh why do you argue with f2p games only because both are f2p? Because both are free and such comparable?

The business model f2p is NOT the games genre. So stop mixing up games in the discussion.

So please stop using Clash of Clans in a f2p MMO RPG discussion. Why do you refer Farmville 2 in a discussion about World of Tanks. Why do you use Candy Crush Saga as a reference when we talk about f2p FPS.

Only because all are f2p? Think again.

Stuff one game does in f2p does not mean it works for your game. Stop copy/pasting things.

Stop saying "But I see game xyz is doing ... so we need to do ...". You don't know if what they do is successful - you don't have their data.

You assume ... and how one of my bosses always says "Assumption is the mother of all fuck ups"

Watch this making of "Triple Town" for some really excellent advice.


Quo Vadis 2014

The title doesn't mean I am asking where we go in 2014 but it is the name of the largest developer conference in Germany happening next week April 8th to 10th.

My talk on Thursday morning will dissect the monetization of Puzzle & Dragons. After my talk about doing the same with World of Tanks was so successful I decided to expand those topics. Btw this is the first talk I will hold on an iPhone!

At Casual Connect 2014 in San Francisco in July I will repeat that exercise with League of Legends.

I am doing this simply to educate teams how these games work. I usually pick top f2p games for this as they aren't at all "evil" - which seems to be a major criticism of f2p. I assign 3 pillars on those dissections:

Public Metrics
Numbers and data I find online, either from services like Appannie, Comcast or simply from the game providers PR or shareholder messages.

Own Monetization & Online Game Experience
I use my professional skills to take the game apart into its foundations and mechanics and examine them for their functions.

Self Experimentation
I play the game as a player for a while (usually until mid game) and then as a payer (note the missing L) and research what this changes in the game experience compared to the former experiment.

Those three usually give me enough information to understand fully how the game works in terms of game mechanics & monetization.

I hope to see you at one of the above conferences.


GDC 2014

I am off to GDC 2014 in San Francisco tomorrow. Besides being the largest developer conference of the world with over 20.000 attendees the 2014 will be important simply because we are in transition years (see previous post).

A lot of talks will focus on the new generation of consoles, others on the other cool stuff happening like indie, f2p, digital etc.

I also expect a major announcement from Amazon, you read it here first.

(Edit::told you so: http://gizmodo.com/amazon-fire-tv-hands-on-the-fastest-smart-tv-youve-ev-1556986083/@jschreier)

I might blog the major findings during my stay - that depends on my internet, jet lag and hang overs.


Transition Years

In 2004 I made a talk on Quo Vaids, the largest German developer conference, about our game industry cycle. (btw. the next Quo Vadis is in April, highly recommended!). This talk was adapted into a major article on MCV, the leading industry magazine by its time.

From there on people knew what it meant to be in a transition year. Although the term "transition year" was coined by EA I can take credit assembling the facts and regular events what a transition cycle causes.

Basically the games industry goes through a cycle which is kicked off whenever a new console enters the market. The old one doesn't do the revenue anymore it used to and the new one hasn't grown enough yet to do good revenue.

This forces the big players into a conservative mode which means:
- Studios are getting shut down
- Media spending is reduced
- Releases are safe bets, i.e. sequels

The side effects are usually that independent studios are no longer able to place their next developments and shut down if they don't have already one under contract. Also some media are shutting down like games magazines or game web sites as the reduced media spending also hits them.

However as developers and teams are looking for alternative revenue streams they put their creativity into other platforms like the new wave of good games on PC digital or the immense growth on mobile games this transition cycle. Some also find ways into f2p on consoles or PC.

Why is this important? Because 2013/2014 is the current transition year where bad things already happened and worse is still to come. From the last count of studio closures at least over 15000 developers were laid off over the course of the last 18 months in USA and Europe. Some cities were laid to waste in terms of game development like Austin or Boston.

Why I am saying this? Simply because I want to calm you guys down that this is perfectly normal and part of our cycle. It is like hitting Ctrl-Alt Delete and re-install. Everything will be smoother and better afterwards, you just need to be prepared.

Not complete overview, just samples:




Bioshock Devs





Steam kills PC Games

Steam announced that publishers on Steam can now run their own sales. Why this is bad I won't say here simply because he said it all:


Just this much: this will be bad, a massaker, a bloodbath. With only one survivor.


Buy Banished

I rarely do this but I would love you to take a look at this indie game and give it a try. It was released just today (and will be on Steam tonight) and is a resource management game just like Settlers or SimCity. Beware that the learning curve is steeper so I recommend the tutorials first.

Information about the game: http://www.shiningrocksoftware.com/game/
Buy Humble Link: http://www.shiningrocksoftware.com/buy/


Evil Game Design Challenge

On Casual Connect 2014 in Amsterdam I had the chance to take part in an evil game design challenge. The goal was to take Minecraft and convert it into an evil but working f2p title. My contenders Ben Cousins and Laralyn McWilliams were tough challenges but I overcome them with rhetoric I guess. While Ben delivered the most professional design Laralyn viewed the experience from the players view and motivations - considering she has a strong MMO background that is logical.

We had similar designs simply because Minecraft is obvious to monetize but I think I won the "evil" part of it - which was the key of the challenge, right? Remember this isn't serious - its over the edge.

Somehow I can't insert the video here so I leave the link:



Oculus Rant

The Oculus Rift sells a dream, a dream we can enter virtual worlds completely. The founder even says:

"one of the most important technologies in the history of mankind”

What? I think we might mix up the technology described in books like "Ready Player One" with simple head tracking & displays in front of your eyes.

Many people forget that this whole Rift thing was a hype years ago back in 1995 - and failed utterly. Those people praising the latest tries of Oculus Rift do not read up the documents of Fraunhofer or Professors or Universities why the Virtual Reality Goggles failed back in 1995 (that is how they were called in the past). And yes all those scientists and experts were involved in this VR thing back int he 90's.

UThe problems of the VR glasses aren't solved yet close to 20 years after the first hype. If they don't start to tackle them Oculus Rift and the new generation of 'VR' will vanish as did the hype around 1995. And the problem isn't in the technology, the problem is inside the human head.

Don't get me wrong. I wish those glasses were possible, but it is harder than they think to make a marketable product out of this without customers puking all over their computer due to motion sickness.

VFX1 Headgear from back in 1994


Good F2p games clones and what it means for you

Well guess what: most successful f2p games are all clones of existing games. Or at least close adaptions.
Lets check some out.

Clash of Clans (iOS)
The best monetizing f2p game from the west does 2 million US$ a day, but the team did a close to identical game called Galaxy Life in their former company Digital Chocolate, which again is an adaption of a Facebook Game called Edgeworld by Kabam.

By the same developer Supercell this is basically a Farmville variant. A good one yes, but still a lot of mechanics were taken from that old Facebook game by Zynga (which in turn cloned it from an Asian game)

League of Legends
Yes, even they adapted the grandfather of Moba, a Mod for Warcraft III called Dota. And yes, Dota2 is the sequel. Of course the setting and graphics changed, but the fundamental principle of the game remained the same (and yes, I know the guy is one of the original Dota mod creators)

Puzzle Dragons
A match three game with RPG elements and monster fusion meets Pokemon. The most successful mobile game from Asia even dwarfing Clash of Clans in revenue. Variations were available before (like Puzzle Quest) but not the mix like they did. Clones are appearing daily.

Candy Crush Saga
Well take Bejeweled, attach a meta game and progress, voila you have a game which does 30m a month. Many tried but King.com Saga recipe seems to work for casual games. Only after Candy Crush moved to iOS it bat their former revenue king Bubble Witch Saga which doesn't work on mobile as well due to interface issues. Clones have been tried, the more successful ones are even from the same publisher King.com. None can reach the success (and if you wonder there is a reason for it).

World of Tanks
Counterstrike with tanks. Nothing special right? Attach a progression system and monetization and voilá you have a hit. I might be too simplistic but under the hood WoT is nothing else.

So what did those games above do to actually be that successful? The numbers are extreme. Millions of users, millions of revenue even daily. The above games dominate the f2p online space. No wonder companies try to clone those games - some even 1:1- all those images are from a different Clash of Clans clone.

It seems there is enough potential in old successful game loops that you simply take these, attach a meta game with progression and monetization strategy and you might have a million seller. It seemed to work for the companies above right?

What really happens is that f2p is still young and exploring new areas, so expect more mature games (or more core as you would say) to expand into f2p space soon, so that the two leaders LoL and WoT can be challenged.

Also expect any game loop you know to be misused as a f2p game at some point. Some already have been tested like Black Jack, Golf, Poker, Asteroids, Mahjong etc. It is a formula and simple (core gamne loop + Meta game & progression) and will be exploited as such. It is so simple that I wonder why the huge wave of these games hasn't arrived yet.


Steam Machines will fail

I won't write a lengthy blog post about them. I simply predict they will fail. Read on.

The Gordon Kelly sums it up in the comments with these questions:
1. Can you can tell me why a mainstream user would buy a Steam Machine over a console?
2. Can you tell me why hardcore gamers would buy a Steam Machine over a standard PC?

Read yourself here: http://goo.gl/5hIWgE

Never underestimate Nintendo

Well, it happens every console cycle that industry experts want to tell Nintendo what to do. Just check the headlines here:


Thats really funny. If Nintendo would have listened to those experts the last cycle they would have been gone by now. And guess what: which console sold most last gen?

I wrote about this a lot of time, simply use the label Nintendo.

Some rules about Nintendo:

#1: it is a Japanese company, i.e. they think differently
#2: Nintendo has patience. Decades of patience. It is 125 years old ffs
#3: Nintendo is rich. They don't even need to sell consoles to be richer
#4: Nintendo always did their thing. They were wrong before and it didn't hurt (Virtua Boy, Powerglove)
#5: Nintendo isn't and never was for the core gamer. But our industry writes for the core gamer

And this time the internet remembers your articles and I will pull it out and call YOUR NAME with all the crap you experts have written :)


iOS App Store congestion

Many developers and publishers alike are worried about visibility on the App store. To counter this they try to spend more and more money on user acquisition. Or they find creative ways to game the App Store.

However there is another obvious way getting your App visible. Have a bloody good & distinct game.

If you do whatever everyone else is doing then the only way to separate you from them is either price or marketing spend (aka visibility). Price is tough as you can't go cheaper than free (well you can, but that is not here yet).

Lets see some examples: strategy games. There are really bloody good strategy games on the App Store. Check them out yourself: http://toucharcade.com/top-reviews/strategy/?time=all

Just look at the 5 star rated ones. Awesome isn't it. The key trick is that I put on "life time", i.e. all 5 star rated games since the App Store exists from that site.

Why this? Because the iPhone to an extend doesn't change a lot in terms of games. Practically you compete against all games having been released since ... lets say the iPhone 4, that was in 2010.

This is what I am worried about more than visibility. In the next few years you need to compete against all hits since 2010. That is kind of unique. On consoles hits from 2 years ago aren't really competing anymore with you. On iOS they are.

Look at the top grossing charts. do you realize that most of these have been released prior 2013?

Check yourself: http://blog.tapjoy.com/app-development/what-do-apples-top-grossing-iphone-apps-of-2013-all-ha/

So if you plan to make a runner game for example don#t do this unless you are 100% sure you are going to revolutionize that genre. Or a tower defense game.

Do what no one does. Or do it entirely different. Be bold. Be different. But be realistic.

Also check this list out (Metacritic): http://www.metacritic.com/browse/games/genre/metascore/strategy/ios?view=condensed

And do  me a favour and buy one of my all time favorite real time strategy games on iOS: Red Conquest.


The WiiU CPU sucks - NOT

A recent anonymous post is making its rounds on social networks from a disgruntled developer:


While its worth reading make note that you can replace the word "WiiU" with any console in the past. Working on new consoles sucks. Launches are always messy. Some remember that Xbox development kits where Apple Macintoshes. Imagine that.

The point about the CPU clock speeds in the article is a bit extreme and wrong. Recent trends basically move more and more work into the GPU of your computer.

Wolfgang Engel, the "Shader God" of this industry (among others responsible for Lara Crofts Hair in Tomb Raider), explained it to me like this:

"GPUs move into the direction of CPUs since 2007. They become more general purpose. Fortunately they have a multi-core / multi-threading model that is very efficient and much easier to use.
On a fundamental level the difference between a CPU and GPU is the type of data they work on. GPUs work well on lots of similar "small" data sets while CPUs can work on more generic data. It turns out that games have a lot of those small data sets and that in general they became more common over the last 20 years with large amounts of data generated by computers.
So what we are seeing is that the importance of CPUs decreases in game consoles and the importance of GPUs increase. GPUs take over more and more CPU tasks. 

This is why the XBOX One and PS4 have -compared to the PC market- rather slow CPUs but quite fast GPUs."

No reason to complain about low clock speeds of your CPU, simply learn proper shader language and do your work there. And that is where the major difference lies from the last generation of consoles: when the PS3 and Xbox 360 was designed the GPU's weren't developed with that general purpose architecture. Now they are.

Sidenote: as all three consoles use AMD chips as GPU's they basically define the GPU and Shader standard to come. I wouldn't buy nVidia shares now...

Edit: and more developers speak out:



Microsoft is losing one advantage on Xbox One

Microsoft is stupid sometimes. Well maybe more often than we like. Microsoft introduced the internet to consoles. The Xbox was a good start and they made it really good on the Xbox 360. Yes, they screwed up their interface and shop over time, but still it was much better compared to their counterparts Sony or Nintendo.

Why is this? My explanation is that both Nintendo and Sony are Japanese and in Japan the Internet never took off as big as in the western world. Online games never played a major role. The reason I guess is that PC's aren't used at home much due to space restrictions. Japanese people access the internet through their mobile phone. So they had all sorts of online services much sooner than we had. They already had full internet functions when UMTS was still in development in the western world.

If you look at how Nintendo handles the internet it can't get any worse. You add friends by using cryptic numbers like 435132. They claim to protect their kids customers. Sure. That can't excuse the bad online experiences you have with their club Nintendo or their eShop. If you ever tried to buy software there, recover your password or even link new devices you know what I am talking about. Abysmal user experiences.

Sony had the same problem for a long time but patched up their systems over time. Still it is odd that when you login the PlayStation Network on your PC and click on an advertised title to buy it you are redirected to their shop and need to LOGIN AGAIN. Besides only accepting credit cards (no point cards available) they have a decent collection of movies and TV series on top of their game offers.

The PS4 is slightly better in this regard but you see the Japanese style Internet of the 2000's working on all ends. I was surprised that Sony has the lead in live streaming over TwichTV on the PS4 while the Xbone feels like a closed system currently.

And that is my point: Microsoft is losing their big advantage they once had: The internet, online games, connectivity. And Sony is catching up fast. While Nintendo still doesn't understand how the internet works Sony is implementing features fast. Besides Twitch they offer now streaming services for PS3 games through their GaiKai aquisition. If that works well or not doesn't matter, what matters is that Microsoft must speed up their operating software development and store offers, otherwise they will continue to lose against Sony.


Happy New Year!

Welcome to 2014. It will be an important year as the last generation of consoles will start to fade out while the new one takes over.

This Christmas will be the time of the new generation. The last hurrah of the last gen consoles will be in its software. Some good games are still to come.

The problem however is numbers. The last gen won't sell the millions of games it used to be simply because some users migrated to the new one, some users stored their consoles away or they simply break (remember the last gen is particularly prone to this).

The next gen won't have the numbers yet. GTA V sold zillions on a market with 140+ million consoles. The recent sales numbers of Xbone + PS4 are close to 8 million in total. If you extrapolate this to Christmas we might end up with maybe 24 million end of this year (both Xbone + PS4). Thats ca. 15% of the last gen market so publishers won't expect more than 20% of the revenues counting the effect in that there aren't many games yet and people buy everything they can get their hands on.

So the revenues of all publishers will be DOWN this and the next fiscal year (ending March 2015). Still it is an important step as afterwards we will end up with a better and healthier console market simply for some of these factors:

The PS4 and Xbone embraces online much better than the last gen. This will help smaller titles to be distributed online and make smaller console teams viable.

This will also allow MMO's to migrate to the consoles helping with long term revenue and retention for these titles. This include f2p titles (and first ones are very successful like Warframe)

More importantly the architecture of both consoles are very PC like as they use PC components. This will make cross platform development much cheaper and easier helping return of investment, lessening the risk of large scale AAA game development like Assassins Creed IV or GTA V was. You can basically develop for 2 consoles and PC at once without losing too much quality. The last gen had problems due to their custom architecture. Hint: this will push PC gaming a lot as a side effect.

So I expect further consolidation in 2014 until more money is being made on the markets (including mobile, online) which will have an investment effect in 2015+ soonest, maybe even as late as 2016. In 2016 we will be back in a market of 100m+ consoles making even more money than this gen. Remember this kind of investment has a lag of one fiscal year.

What about the other markets? Mobile will still grow (and is still growing in case you doubt it) but it is getting rather populated. The market is swamped with clones of games already existing making it even worse for new innovative games to be noticed. I think this is only a temporary phase until the markets mature and both developers and providers find ways to offer better visibility and customer acquisition. Signs of this are already there.

What about me? I will have public appearances in Helsinki at one of their Universities teaching f2p:


I will also attend Casual Connect in Amsterdam participating in the Evil Game Design Challenge and talking about WoT:


Next I will attend Game Developers conference in SF analyzing the monetisation of World of Tanks:


Finally I will be in Berlin for Quo Vadis of course, ranting about our industry and giving German developers a glimpse what awaits them;


See you on one of these events or on this blog. Thank you for your loyalty and listening to my rants!