Free Games: Will be the Future Trend or Will They Fade Soon?

The numbers and trends of recent years make one thing clear: the gaming industry is strongly committed to recurring expenses and the free-to-play model is the largest source of income. There is no indication that this will change anytime soon. On the contrary: the percentage of revenue that publishers derive from such games continues to grow and that is in all cases a conscious strategic choice, which will also be continued in the future. In short: there will only be more free-to-play games. The developers of all games release free versions of their games, including iGaming platforms like arabcasinohex.com. Although free games are a great way to test the waters with one foot, they face a lot of financial, ethical, and professional challenges.

The question is whether 'full games', which have to be paid separately, will suffer from this trend. There are certainly indications for this. For example, GTA V never got a single player expansion because all the attention is focused on GTA Online. Epic Games stopped developing Unreal Tournament a year after Fortnite's breakthrough, and recently Ubisoft decided that the next title in the Division series will be a free-to-play game. The extent to which that game changes compared to the predecessors that had to be paid separately is still the question, but it indicates that the switch to free-to-play can also affect existing franchises.

In many cases, however, publishers bet on two horses. For example, the free Call of Duty games are separate from the other shooters in the series that require payment. Activision also says that those full games sell better thanks to the free games, so that gives the publisher an extra reason not to let the attention for those individual games slacken.

In addition, the revenue from free-to-play games comes mainly from the mobile market and in many cases the mobile games are separate from the paid games for consoles and PCs. Fortnite with crossplay on mobile platforms, consoles and PCs is the big exception. EA opts for the Call of Duty strategy with its upcoming mobile versions of Battlefield and Apex Legends; the smartphone games are separate from the PC and console versions.

Market for Paid Games Grew Faster Than Free-to-play

Free-to-play games have been the biggest source of income for the game industry for years, but the market for paid PC and console games has grown significantly in the past year. According to analyst firm SuperData, revenue from such games grew by as much as 28 percent in 2020, while free-to-play grew by 9 percent in the same period. This solid growth is partly prompted by the corona pandemic and it is questionable whether this trend will continue, but it indicates that in addition to free-to-play, there is also a large growth market for paid games.

Moreover, the gamer market is in better shape than ever. The number of gamers is growing enormously and with it the range of games. The major publishers are seeing a significant shift in the revenue model, which is affecting some of the largest game franchises in the world. However, if you look further, there is a huge choice of games that traditionally have to be paid for.

The game industry is also largely determined by console manufacturers Sony, Microsoft and Nintendo. They are currently not or hardly focused on free-to-play games. They do benefit from it; of every euro spent on free-to-play games in their download stores, they earn about 30 percent in commission. So even without releasing such games themselves, they earn huge amounts of money from them.

Focusing on Single Player Games

The three console manufacturers are currently investing heavily in individual games, making them the main supplier of large, narrative single-player games. This does lead to fragmentation of the market, because Nintendo and Sony games cannot or can hardly be played on other platforms. At Microsoft it is slightly different, because all new Xbox games from their own studios will also be released for Windows and are part of the Game Pass subscription, so that they can also be played via the cloud. Currently, Xbox cloud gaming only works on mobile devices, but streaming hardware for TVs and Xbox integration in TVs is on the way.

Sony does have great ambitions to reach more people by bringing PlayStation games to smartphones, but PlayStation Studios CEO Hermen Hulst recently emphasized in an interview with the PlayStation blog that narrative single-player games are the DNA of PlayStation. "We love making them and we'll keep making them as long as gamers enjoy them."

Nintendo has the most classic revenue model. The Japanese console maker mainly earns money from the sales of its Switch and its own games. Nintendo had ambitions to grow with smartphone games, but those plans have been put on the back burner.

Risks of Free Games

Another reason that paid games will continue to exist is the fact that free games are not without risk. To stand a chance of success, publishers have to invest heavily in the development of a free-to-play game and if the game flops, that money is wasted. A game that is paid separately, even if it is not a huge success, still yields something.

Successful free games have tens to hundreds of millions of players, but not all of them spend money on it. Numerous studies show that a small percentage of players account for the majority of spending. Publishers are therefore dependent on a relatively small group for the actual income.

Publishers also need to find a balance in free games: players have to stay interested in the game, and be persuaded to come back often and spend money regularly. However, mechanisms that rely too much on spending can deter players. Another risk is that releasing a free game can hinder the sale of paid games. All in all, free-to-play games are no guarantee of success.

Legislation & Ethics

The revenue model surrounding recurring expenditure in the form of micro transactions is also under scrutiny from regulators. Loot boxes are particularly criticized in Europe, for example from the UK Gaming Authority and the Belgian Gaming Commission. This has not yet had major global consequences, but locally it does have some problems. On a global scale, regulators' attempts to do something about loot boxes are little more than pinpricks for now.

The financial results do not yet show any opposition from that quarter. In addition, the gambling authorities only check whether games comply with gambling legislation. Separately, there is the discussion about the ethics of games like Fortnite, which are largely aimed at children and rely on psychology to make money.

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