Free-to-play (F2P or FtP) video games are games that give players access to a significant portion of their content for free. The term "free-to-play business model" or simply, "free-to-play model", refers collectively to business models that ultimately result in the creation of free-to-play games. Games that adhere to free-to-play business models are distinct from traditional premium games, which require payment before use. Free-to-play games are not to be confused with freeware games, which are entirely costless. Accordingly, free-to-play games are sometimes called "free-to-start" due to not being entirely free. Certain free-to-play games have also been labeled as "pay-to-win"—that is, that players can pay to obtain competitive advantages over other players.
There are several kinds of ways that free-to-play games generate money, despite being mostly free. A common method is based on the freemium software model, in which users are incentivised to make small purchases, called microtransactions, to either access additional cosmetic or gameplay content, progress through the content faster, or gain competitive advantages over other players. Another method of generating revenue is to integrate advertisements into the game.
The free-to-play business model was commonly seen in early massively multiplayer online games targeted towards casual gamers, before finding wider adoption among games released by major video game publishers to combat video game piracy. The model has been used by games such as Star Wars: The Old Republic, Apex Legends, Fortnite, VALORANT, and League of Legends.
Revenue sources
In-game items In-game items may be purely cosmetic, or they may influence gameplay in a variety of ways, such as enhancing a character's power level or accelerating progression speed. A common technique used by developers of these games is for the items purchased to have a time limit; after this expires, the item must be repurchased before the user can continue. Another commonly seen mechanic is the use of two in-game currencies: one earned through normal gameplay, and another which can be purchased with real-world money. The second, "premium" currency is sometimes given out in small amounts to non-paying players at certain times, such as when they first start the game, complete a quest, or refer a friend to the game. Many browser games have an "energy bar" that depletes when the player takes actions. These games then sell items such as coffee or snacks to refill the bar. Free-to-play games commonly use microtransactions, which allow players to purchase in-game items or advantages using real money. These purchases may include cosmetic items such as character skins and customization options, gameplay enhancements, timsaving e-features, or access to additional content. This system allows access to the core gameplay without payment while offering optional purchases that enhance convenience or accelerate progression. Other free-to-play games also include loot boxes, in which players can purchase random virtual items using real money or in-game currency. These mechanics have attracted significant research attention due to their similarities to gambling, as players spend money without knowing the outcome of the rewards. Research has examined the association between loot box spending and problem gambling behavior.Zendle, D.; Cairns, P. (2018). "Video game loot boxes are linked to problem gambling". PLOS ONE. Battle passes are also used in some free-to-play games. They are a seasonal monetization system in which players earn rewards by completing in-game challenges. Players may access a free reward track, while a premium track is available for purchase to obtain additional rewards, such as cosmetic items, in-game currency, and other content. Some free-to-play games use virtual currencies that can be purchased with real money and used to buy items within the game. The use of virtual currency can create psychological distance from real-world spending, which may encourage additional purchases. Research on freemium games suggests that factors such as convenience, progression speed, social interaction, and personalization can influence players’ decisions to make purchases.
Advertisements
Some free-to-play games, such as id Software's Quake Live, use in-game advertising to generate revenue. In addition to making in-game items available for purchase, EA integrates in-game advertising into its games. In August 2007, EA completed a deal with Massive Incorporated, which lets Massive update and change in-game advertising in real-time within EA games.
History
Matt Mihaly created the first known business model of exchanging virtual items for money in an online game, in 1997 for the flagship title Achaea, Dreams of Divine Lands for his corporation originally Achaea LLC that later became Iron Realms Entertainment. The free-to-play business model in online games was later realized by Nexon in South Korea to a degree first catching more major media attention at the time. The first Nexon game to use it, QuizQuiz, was released in October 1999. Its head developer, Lee Seungchan, would eventually be involved in the creation of MapleStory.
The free-to-play model originated in the late 1990s and early 2000s, coming from a series of highly successful MMOs targeted towards children and casual gamers, including Furcadia, Neopets, RuneScape, MapleStory, and text-based dungeons such as Achaea, Dreams of Divine Lands. Known for producing innovative titles, small independent developers also continue to release free-to-play games.
Free-to-play games are particularly prevalent in countries such as South Korea and the People's Republic of China. Microtransaction-based free-to-play mobile games and browser games such as Puzzle & Dragons, Kantai Collection and The Idolmaster Cinderella Girls also have large player populations in Japan.2013-09-27, ツイート数は「パズドラ」より「艦これ」 【ゲームの課金についてのツイート分析】, MarkeZine In particular, the Nikkei Shimbun reported in September 2012 that Cinderella Girls was earning over 1 billion yen in revenue monthly from microtransactions. Electronic Arts first adopted the free-to-play concept in one of its games when it released FIFA Online in Korea.
In the late 2000s, many MMOs transitioned to the free-to-play model from subscriptions, including subscription-based games such as The Lord of the Rings Online: Shadows of Angmar, Age of Conan: Hyborian Adventures, Dungeons & Dragons Online, and Champions Online. Turbine as of September 10, 2010, has given an F2P with Cash shop option to The Lord of the Rings Online which resulted in a tripling of profit. Sony Online Entertainment's move to transition EverQuest from a subscription model into a hybrid F2P/subscription game was followed by a 125% spike in item sales, a 150% up-tick in unique log-ins, and over three times as many account registrations.
The movement of free-to-play MMOs into the mainstream also coincided with experimentation with other genres as well. The model was picked up by larger developers and more diverse genres, with games such as Battlefield Heroes, Free Realms, Quake Live and Team Fortress 2 appearing in the late 2000s. The experimentation was not successful in every genre, however. Traditional real time strategy franchises such as Age of Empires and Command & Conquer both attempted free-to-play titles. Age of Empires Online was shut down in the midst of a tiny player base and stagnant revenue, and Command & Conquer: Generals 2 was shut down in alpha due to negative reactions from players.
In 2011, revenue from free-to-play games overtook revenue from premium games in the top 100 games in Apple's App Store. The percentage of people that spend money on in-game items in these games ranges from 0.5% to 6%, depending on a game's quality and mechanics. Even though this means that a large number of people will never spend money in a game, it also means that the people that do spend money could amount to a sizeable number due to the fact that the game was given away for free. Indeed a report from mobile advertising company firm SWRV stated that only 1.5 percent of players opted to pay for in-game items, and that 50 percent of the revenue for such games often came from just ten percent of players. Nevertheless The Washington Post noted that the developers of two such games, Supercell (Clash of Clans) and Machine Zone (Game of War: Fire Age), were able to afford Super Bowl commercials in 2015 featuring big-name celebrities (respectively Liam Neeson and Kate Upton). The latter, Game of War, was in fact, part of a roughly $40 million campaign starring Upton.
Many video game publishers use the free-to-play model for the MOBA genre.
During 2015, Slice Intelligence tracked people that bought products in mobile video games, and these players spent an average of $87 in free-to-play games. The highest spending per player in 2015 was in Game of War: Fire Age, where the players that bought products on average spent $550.
In the 2020s, free-to-play models were dominated by gacha mechanics. Games such as Genshin Impact and Cookie Run: Kingdom saw leaps in popularity in part due to the rise in cozy games as well as the COVID-19 pandemic. As these games are often both free-to-play and cross-platform, they do not require specialist hardware and are accessible to players even on low-end devices.
Other free-to-play games, such as Fortnite, saw a huge increase in active players during the early 2020s. Some critics suggest that its bright colors help its appeal, while others point out that, like competitors such as Roblox, it holds a variety of game styles and one-off events that retain players. The game is continually updated with new content and has collaborations with Hatsune Miku and South Park. Despite this, daily player counts on Fortnite have been dropping since 2023. Comparison with traditional model The free-to-play model has been described as a shift from the traditional model of buy-to-play game, where the game's success is measured through statistics such as player count or units sold. Within free-to-play, the most important factor is the number of players that a game can keep continuously engaged, followed by how many compelling spending opportunities the game offers its players. With free games that include in-game purchases, two particularly important things occur: first, more people will try out the game since there is zero cost to doing so and second, revenue will likely be more than a traditional game since different players can now spend different amounts of money that depend on their engagement with the game and their preferences towards it. Player populations that spend money on free-to-play games can be broken up into terms that borrow from gambling: "whales" which typically are the smallest segment, up to around 10% of players, but are willing to spend the most on a game; "dolphins" which represent a larger portion of around 40% of players who spend some money but not as much as whales; and "minnows", representing about half the population, who spend the barest amount to maintain activity. As a result of this distribution, whales typically provide most of the revenue in free to play games, and in some cases, 50% of the revenue comes from 0.15% of players ("white whales") in one report. It is not unlikely for a very few players to spend tens of thousands of dollars in a game that they enjoy.
For PC gaming specifically, two challenges exist: video game piracy and demanding system requirements. The free-to-play model attempts to solve both these problems by providing a game that requires relatively low system requirements and at no cost, and consequently provides a highly accessible experience funded by advertising and micropayments for extra content or an advantage over other players.