Free 2 Play, not just for games anymore

In today's LA Times I read an article about how tiny amusement parks are drawing visitors while the big well known theme parks operated by major players like Six Flags and Disney are seeing declining attendance and revenues. In particular, the article says:

...tiny beach-side amusement parks along the California coast are reporting robust business and big crowds while most of the state's big theme parks have seen shrinking revenue.

Small, privately owned seaside parks, such as Pacific Park at the pier in Santa Monica, Belmont Park in San Diego and the Santa Cruz Beach Boardwalk, don't have multimillion-dollar advertising campaigns or 3-D attractions as do Disneyland and Universal Studios Hollywood. But they boast something even more appealing to penny-pinching tourists: Free admission.

As a result, vacationers are turning to old-fashioned Ferris wheels and carousels over expensive, high-tech thrill rides.

So basically these smaller parks are free admission and you pay a ride at a time, a complete contrast to big parks like Disneyland or Universal Studios where you pay $60 or more for admission, another $10 to $20 to park and because you typically are not allowed to bring outside food (right?) you pay $4 per churro, $3.50 for a 16 oz bottle of Dansani, $9.95 for a personal pan pizza and $24.95 for a set a photo of you and your loved ones screaming while coming down the massive "waterfall" in the Jurassic Park ride. With any luck you can avoid paying bail for your older, balder and fatter son.

Ok, so all the extra and expensive things you pay for at a Disneyland or Universal Studios would be extra in a small park, too, so that isn't much of a difference except perhaps the grandeur and pricing scale. For the admission component, however, there is a huge difference between the small guys and the big guys.

The small guys are like Free 2 Play (F2P) games where the game is, yes, free to actually play it. You only pay for the extras like maybe access to higher levels or certain areas of the game or items and pets and weapons or chances to win a prize. So you can play all you want within the limits of the game and pick and choose what you pay for. Or you simply pay to speed up progression though different aspects of the game.

The big guys are like premium MMOs [cough]worldofwarcraft[/cough] where you pay to buy the game on DVD or download it, then pay an additional all-access monthly fee which typically ranges from $10 to $15. It can be a great experience but over time it gets very expensive.

F2P games can get expensive, too, but in a way the pricing is fairer. Lite users pay less while heavy users pay more. Though to be fair some heavy users never pay in some MMO games and some lite users pay to speed up their progression and ironically play for less time than the heavy users. Whatever the terminology, you pay as much as your are willing to based on your own needs. In essence it is a more accurate pricing model in that users pay for what they consume with more granularity. With traditional subscription MMOs the only consistent metric of play user is number of hours per period. A user who plays 100 hours in a month pays the same as someone who plays only 50 or as much as 200. (Note, if you or anyone you know plays any MMO for 200 a month you or they can no longer be killed because you cannot kill that which has no life...)

This is not an endorsement for F2P games. It's just that while the packaged goods video games business struggles with profitability, the F2P games in Asia are making a killing. Even Facebook games which make money using similar F2P models are starting to make money and the biggest Facebook game developers (Playfish, Zynga, etc.) are making a lot of money.

F2P models and traditional MMO models will probably peacefully coexist for a while, and it is unlikely World of Warcraft will go F2P anytime soon. If we go back to the F2P style amusement parks vs. Universal Studios and focus only on access to rides (and not parking or food or crappy memorabilia and highly flammable winnable stuffed animals for little Susie) we are left with paying per ride vs. paying a large entrance fee and ride as much as you want...or at least as much as you can stand reading "45 minute wait from this spot" signs for hours at a time. In other words, we're talking about F2P vs. the $60 one time fee for a typical high-end console game. And what I am saying is that eventually, the F2P games will start threatening the $60 disc based game market. It's not a question of if but when.

This isn't to say that tomorrow the retail publishing businesses of Activison, Ubisoft, EA and all their friends are doomed, or that the retail market is destined for total annihilation. It's just that these publishers are going to have to adapt in response as the F2P model gains further traction in Western markets.