Is it time for pay-to-play?

July 31, 2006 on 3:34 pm | In The Casual Games Business |

At some point in the future, game developers will look back on moment when the “pay to play” model for online games burst into the mainstream. The tipping point might be tomorrow or it might be 10 years from now, but at some point a casual game developer is going to step up to the mark, bet on the “pay-to-play” model, and win. In my mind, there is no question this will happen. In fact, aside from “Who will do it?”, the only real questions are: “Why?”, “When?” and “Why did it take so long?”

Let’s answer each question in turn.

“Why?” is the easy question. Pay-to-play will eventually take off because other casual game business models have their limitations

For example, many of us are willing to download and install game — either paying upfront or after a trial period — but some of us find downloads to be too big a commitment. Casual games, after all, were meant to be casual. Likewise, the download models generally rely on credit cards, but some are still concerned about credit card security, and teenagers cannot get credit cards at all. So the download models are perfect for some, but not for all.
Likewise, many of us are willing to tolerate sponsorship or advertising that is wrapped around or placed within casual games, but ads can be distracting. Also, game publishers are vulnerable to market forces that affect the price of ads across all web sites, not just ads on casual game portals.

So all the current models are worthwhile, but none are perfect for every player and every publisher in every situation, and that leaves the door open for pay-to-play.

“When?” is a little harder to answer, but there are certainly pay-to-play models in the digital space that are pointing the way.

For example, while pay-to-play is not yet common for web games, it’s already an option for pay TV and mobile phones. In the UK, the pay TV operator Sky uses the pay-to-play model for its Gamestar service, which attracts almost 2 million users a month. Users play games on their TVs using their remote controls and the system charges them by dialling a premium phone number. Depending on the game, users pay 50p – £1 each time they play.

Micropayments models are also starting to point the way. While not strictly pay-to-play, micropayment allows users to buy pieces of content for small fees by grouping together a number of transactions into one larger purchase. istockphoto.com and the iTunes Music Store are good examples of this.

Also, we know micropayments are popular in virtual worlds like Second Life and some Korean and Japanese casual games like Kart Rider. However, in these cases you pay to add features to your avatar or kart, not to play the game. These examples show micropayments can work, but they are not “pay to play”.

Another model from the UK that’s interesting is UKash. With this system, customers buy tokens from regular retail outlets with cash, and then redeem the tokens when purchasing products or services online. Users don’t register, so there’s no risk of fraud or invasions of privacy. It’s almost as free and simple as a cash transaction.

The final question, “Why has it taken so long?”, serves as a reality check. There are still significant barriers we must overcome and most of them are to do with barriers posed by payment systems.

We need global micropayment systems, not just one-country systems like UKash.

We need micropayment systems that work for every internet user, not just the customers of one mobile phone network or pay TV channel.

We need micropayment systems that are so popular that the game developer can assume many customers are already using them — instead of having to explain the system to every new customer and requiring them to jump through hoops before they can get started.

We need micropayments systems that pass almost all of the revenue through to the game publisher, rather than keeping a hefty slice of the action for the mobile phone operator.

And we need to create a gaming culture that values and is willing to pay for the experience of playing a great casual game.

Ultimately, “pay to play” will take off when a game portal embraces a simple, affordable micropayments system that bills the customer once for a session and then lets them play as many times as they like. But none of this will happen of its own accord. Someone will have to bet their business to create this universe. When they do — if they get it right — the rewards will be incredible.

The Little Gamer