[In a fascinating opinion piece originally printed in Game Developer magazine, EA Maxis designer and programmer Soren Johnson (Spore, Civilization IV) discusses the deceptively complex challenges in designing free-to-play games -- and how game designers have lots more to consider than "just" game design.]
In China, a new MMORPG with a very aggressive business model, entitled ZT Online, has gained significant popularity. With over 10 million users and an ARPU of $40/month, the game has made its publisher, Giant Interactive, one of the most profitable online entertainment companies in China.
Like many Asian games, ZT is free-to-play (F2P) and focuses primarily on player-vs-player gameplay. Not only can players steal from their defeated foes, but weaker characters can even be kidnapped and held for ransom, locking their owners out of the game.
Access to equipment in ZT is very limited. First of all, there are no loot drops from killing monsters or completing quests. Further, all items in the game are completely bound to the owner, so there is no way to trade for better weapons with other players. Instead, the primary way to gain equipment to empower one’s character is by paying real money directly to the publisher to open "treasure chests."
Essentially in-game slot machines, these chest have only a small chance of producing something useful, and finding the best equipment often requires opening thousands of chests. In fact, each day, the game confers a special bonus to the player who has opened the most chests -- meaning the player who has spent the most real-world money to obtain better items.
ZT Online’s complete embrace, at every level of the game, of real-money transactions (RMT) may be appalling to some in the West, but the game is in many ways at the vanguard of a trend to develop games that take advantage of the players’ appetites for spending money to gain in-game advantages.
Trends
Ironically, the F2P-with-RMT model traces its origins to the challenge of getting Asian gamers to buy boxed, retail games, most of whom preferred the free ride of easy and widespread piracy. In response, Korean companies like Nexon and NCsoft built server-based online games which could not be pirated and would require alternate business models.
Starting with subscriptions (including the world’s first million-subscriber MMO, NCsoft’s Lineage), the Korean industry eventually shifted to F2P games that made money from micro-transactions, such as Nexon’s KartRider and MapleStory.
With many of these online games serving tens of millions of players, the Korean model has begun attracting the attention of major Western publishers, who have chartered their own F2P games in Asia, such as EA’s FIFA Online, Valve’s Counter-Strike Online, and THQ’s Company of Heroes Online.
The promise of F2P games is that gamers will get hooked on a free game and then eventually spend their own money on their new passion. However, designing these games is not a simple endeavor; in fact, the challenges of F2P design can make developers appreciate how fortunate they were when they could design for a fixed-cost product, either a boxed, retail game or a standard, subscription-based MMO.
In a fixed-cost world, the designer can focus on just one thing: making the player’s experience as engaging and interesting and fun as possible.
For a F2P game, however, designers have to balance making free content fun enough to engage first-time players but not so much fun that they would not yearn for something more, something that could be turned into a transaction sometime in the future.
Every design decision must be made with a mind towards how it affects the balance between free and paid content. Thus, the true cost of piracy is that the line between game business and game design has become very blurry.
As games move from boxed products to ongoing services, business decisions will become increasingly indistinguishable from design decisions. Of course, the industry has seen game designers play businessmen before -- a fundamental part of arcade game design was understanding how to suck the most quarters out of players. Thus, understanding how successful F2P game have navigated these waters is instructive.
Business or Design?
The aforementioned 2D MMORPG MapleStory has an in-game RMT store in which players can purchase items for their characters. These purchases can range from purely cosmetic items, such as funny shades or blue-colored hair, to consumables which give actual in-game bonuses.
These consumables include tickets for earning double experience points over 24 hours, avatar warps for triggering instant travel, and ability resets for realigning character traits.
In a nod to in-game fairness, these bonuses only save the purchaser time instead of directly increasing the power of his character. This distinction is important as RMT can still have in-game meaning without needing to be tied to the game’s best weapons and equipment, as with ZT Online.
Maple Story Cash Store
Another popular F2P game with a different business model is the web-based MMORPG RuneScape, which uses optional subscriptions instead of optional microtransactions. Subscribers gain access to more quests, new areas, player housing, and extra skills.
Again, the designers have to decide where to draw the line between free content to grow the game and paid content to drive revenue. As one in every six active players currently chooses to subscribe, they have struck a good balance.
Travian, a successful web-based MMO strategy game, does allow players to purchase temporary in-game bonuses, such as +10% attack strength or +25% wood production for a week. These bonuses have been controversial among the community as many players feel obligated to buy them in order to compete at the highest level. Gamers can also purchase Travian Plus, which unlocks an improved interface to make playing the game more efficient. The Plus mode includes a larger map display, a combat simulator, empire management tools, graphical info screens, and queued construction orders.
As a comparison, all of these features would be expected in a similar boxed, retail strategy game, such as Civilization 4. However, by withholding their best, the designers are walking a dangerous line here as players could be turned off by the purposely crippled interface.
For example, in Travian, each of your towns can construct only one upgrade at a time. Thus, players are encouraged to visit their towns every time an upgrade is finished, and as each upgrade might take half an hour, players may need to check the site many, many times each day just to keep pace with their competitors. A simple order queue would fix this problem, but the designers purposely decided to offer this feature only to players willing to pay for Plus.
Whether this decision was right or wrong remains an open question, but perhaps a more important question is who made this decision? Game designers or businessmen? Does it even make sense to think of them as being different in a world where every element of a game can be given a price?
Without a good balance of the needs of profit and of fun, F2P games will feel either like a con job designed to suck away all of the player’s money (as with ZT Online) or a charitable endeavor that never acquires the resources needed to develop and grow. However, when facing a difficult decision, one should always err on the side of providing the best free content possible. Greedy developers looking to maximize profits in the short-term risk losing their evangelizers willing to spread the word about a great game which is genuinely free-to-play.
A Free Market Solution
One interesting way to solve this problem - pioneered by Korean companies like Nexon - is the dual currency system, which lets the free market manage the balance. Three Rings' Java-based MMO Puzzle Pirates employs such a system to meet the needs of both players who are time-rich and players who are cash-rich.
One type of currency, Pieces of Eight (PoE), is earned by spending time playing puzzle games while the other type of currency, Doubloons, is bought directly with real money. A wide variety of items are available for purchase, with effects ranging from aesthetic changes to in-game upgrades.
However, as items often cost both types of currency, players who cannot afford to buy Doubloons can trade for some by giving their PoE to cash-rich players. These latter players may need the PoE because they don’t have the time to spend earning it by playing puzzles for hours. By allowing players to freely trade the two currencies, the designers have created multiple paths to earning any single purchasable item.
Puzzle Pirates Exchange
Thus, the designers avoid the balance issues faced in Travian by making sure that all content and features are available to all players, whether they are willing to spend money or not. In fact, when a time-rich player trades for Doubloons, the cash-rich player is essentially "sponsoring" her peer -- every Doubloon spent in Puzzle Pirates earns the developer money, whether the Doubloon is spent by the original purchaser or not.
A natural free market dynamic keeps the two sides balanced. If too many time-rich players flood the game, the value of PoE will plummet, tempting players on the bubble to spend a little cash to take advantage of the low prices. Thus, with the help of the auto-balancing market forces of the dual currency system, the designer’s goal simply becomes creating a compelling experience that keeps people playing the game.
Even Giant Interactive is beginning to understand the limitations of the soak-the-rich design of ZT Online. The publisher is developing a subscription-based version of ZT (without the casino-style treasure chests) that is being launched for the low-income market not happy about playing a game full of rich players who have bought their way to the top. Another game they are publishing, Giant Online, aims for the middle-income segment by allowing RMT but adding spending caps to prevent a monetary arms race.
These developments are welcome because the free-to-play format holds great promise. F2P games have a much larger potential audience than their fixed-cost counterparts because of the former’s ability to satisfy different levels of player commitment, both in terms of time and money.
Further, the potential for innovation is greater because consumers are no longer required to make a "leap of faith" when making a large, up-front retail purchase. However, the challenge of developing F2P games is that being "just" a game designer is no longer sufficient. Success, both in terms of profit and popularity, will be determined by how well the game design matches the business model.
There are loads of games in the App Store for the 
