Free To Play Video Game Makes Over $2 Million Selling Just One Item [Update: Or Not]

from the damn dept

Wed, Nov 30th 2011 3:00pm — Mike Masnick

For whatever reason, some people falsely seem to think that part of what I argue is that no one should ever try charging money for digital goods. Nothing is further from the truth. I have said over and over and over again, the important thing is figuring out what it makes sense to charge for, and what it doesn't make sense to charge for. The problem we have is when people just assume that because they put a price on it, that's the right price. On top of that, those who charge without recognizing the potential pitfalls of charging for things in certain situations shouldn't complain when that effort fails. But if you do it right, you can absolutely charge for certain digital things -- and, in fact, many of the examples we point to of success stories involve charging for digital things.

Aaron DeOliveira points us to another fascinating example, involving the free-to-play online video game, DarkOrbit. Within the game, there's a special item, known as the 10th drone -- or the Zeus Drone -- that is highly desirable. As you might imagine, to get the 10th drone, you first have to get all 9 previous drones... and some blueprints to make the 10th drone. Apparently, this is quite involved. BigPoint, the company behind DarkOrbit, also tried another tactic: the company has run an occasional promotion, where you can buy the 10th drone for 1,000 euros (~$1,330). Here's the amazing part: apparently two thousand people paid, bringing in about 2 million euros, or $2.7 million. For a single digital item. Update: Or.... not quite. A clarification makes it clear that it did not bring in that much. People did buy, but they had to buy with in-game currency. You can sometimes buy such currency... and sometimes it's discounted. If it wasn't discounted and you had none in the game... then the cost of the drone would have been 1000 euros. As that's not likely to be the case, while the game did still sell 2000 such drones, it was clearly for less money. However, it is still an example of where people can be willing to pay if done right... just not as amazing.

But the real key here is in what they did to make this possible. First, used "free" to get lots of people in the door, connect with them, and make them totally bought into the game, such that they'd be willing to spend. Then, build up the overall "value" of such an item, and then offer it in a way that people really wanted to buy even at what many of us might consider to be an insane price. However, it's a perfect example of how if you really connect with fans, and carefully figure out what it makes sense to charge for... you can do quite well.

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Filed Under: business models, darkorbit, digital items, drone, sales, virtual goods
Companies: bigpoint

42 Comments

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Anonymous Coward, 30 Nov 2011 @ 3:07pm

This is a perfect example of how you get sued by angry parents when they receive the credit card statement.
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Matt Tate (profile), 30 Nov 2011 @ 3:11pm

Disappointing
Damn, I was hoping for an article about Team Fortress 2 Hats...
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Anonymous Coward, 30 Nov 2011 @ 3:14pm

How do all the other players feel about people paying for the win?
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Kassandra (profile), 30 Nov 2011 @ 3:16pm

While it is impressive, it should be noted that the original report has since been clarified:

http://www.gamesbrief.com/2011/11/bigpoint-does-sell-the-tenth-drone-for-1000-eur-but- may-not-have-made-eur-2-million-from-it/

Essentially the 1000 Eur is only if the players bought every Uridium needed at that time. the currency could be earned in game, or sometimes there were sales.
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Richard (profile), 30 Nov 2011 @ 3:17pm

Re:
How do all the other players feel about people paying for the win?
How do Manchester United and Arsenal feel about Manchester City and Chelsea?
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Anonymous Coward, 30 Nov 2011 @ 3:18pm

"For whatever reason, some people falsely seem to think that part of what I argue is that no one should ever try charging money for digital good ..."

I've never seen any comments by people misunderstanding that particular point - are you sure you're not making up facts as you'd like them to be ?
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Richard (profile), 30 Nov 2011 @ 3:19pm

Ultimately
The problem amounts to "making people want to pay voluntarily".

That is always what sales strategy is about - the digital domain simply throws it into sharp relief.
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SD (profile), 30 Nov 2011 @ 3:22pm

Re: Disappointing
Here you go

http://www.joystiq.com/2010/10/21/user-created-tf2-items-bring-in-up-to-47-000-for-some-steam- mem/
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Anonymous Coward, 30 Nov 2011 @ 3:35pm

Two Ways to Solve a Problem
1. Work your butt off.

2. Throw money at it.

Give people a choice, and some of them will pick door #2.
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DandonTRJ (profile), 30 Nov 2011 @ 3:39pm

Re:
I've seen people misconstrue the economic arguments for pricing digital [infinite] goods at free or near-free [due to the low or nonexistent marginal cost]. They sometimes think it means that, in a Masnickian world, digital goods must always be priced at or near marginal cost, or bundled with physical [scarce] goods as added-value-only items for the economics to shake out. Of course, that's not the case, and this news item provided a good example to clarify that point with.

A lot of it, I think, has to do with whether you're dealing with an open/closed system or platform. Music, for example, is typically platform-neutral and easily acquired via multiple channels [and in fact, consumers expect the ability to port it to multiple platforms at low or no cost]. When the platform is locked down and centrally controlled, as in a game with a single provider of content who can limit distribution to effectively mimic a scarce good, it absolutely makes sense to leverage the infinite-turned-scarce digital goods if you can. So long as your purchasers valuate it the same way, you're in the clear.
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Matt Tate (profile), 30 Nov 2011 @ 3:51pm

Re:
The article didn't make it clear whether the item was cosmetic or practical in-game, but as a video game player I find it extremely objectionable to give people a pay-to-win advantage.

(I put all the blame with the developer in these situations, as I can relate to people who would rather buy an item than grind for hours to unlock it).
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Franklin Pierce, 30 Nov 2011 @ 4:14pm

Re: Re:
In other words, putting up a paywall or using DRM is okay in some cases despite how often Masnick bitches about it.

At least that's what the last two sentences seem to say. And as long as some people are willing to pay the price, it's all okay.
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william (profile), 30 Nov 2011 @ 4:17pm

the pitfall for this kind of model is that most game company planned to sell you digital goods. This affects how they design the game and the game mechanics.

i.e. artificially make it much more difficult in order to sell you item to make life easier.

a notorious game for this is Maple Story, which is free to play. However, if you want to have any hope of leveling up or progress in the game in a tolerable pace, you have to spend.

Another notorious game is a Chinese one called "Zhengtu". I won't get into details for that one and you can look it up.

In this case, DarkOrbit probably DIDN'T plan to sell this at that price and probably come into realization later that it might be a good idea. Thus the selling of this is not really "forced" on the consumers.

To do it right, games shouldn't be altered to be difficult thus buying digital item becomes necessary. It should be as difficult as required or properly designed, but with an option for people to buy if they are not willing to spend the time.
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Anonymous Coward, 30 Nov 2011 @ 4:24pm

Short version:

Charge whatever you want for whatever you want but don't try to stop others from acquiring something at a lower price range or from somebody else.

Part of sales is making people want to buy from you and not the other guy, that is and always has been part of the WORK!
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Doods, 30 Nov 2011 @ 4:36pm

Not as good as you think
As a previous moderater for DarkOrbit US East side and an avid gamer, I can say that i moved on to other free to play because they increased everything to Price gouging levels and got rid of any "Hooks" that would draw you in. They have they base , Now they pillage.
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Anonymous Coward, 30 Nov 2011 @ 4:47pm

Re: Re: Re:
In some specific cases. In this case the 10th drone is made scarce by a sort of DRM scheme (ie developer controlled servers). However this is viewed positively as the players expect a server that is monitored for hacking etc. In this case the developer is providing a service that just happens to be able to be used to limit the scarcity of a digital good.

Generally the type of DRM that is protested here, is when consumers expect to be able to do certain things (like transfer MP3s to any device they own) and are told by the rights holder they can not. This type of DRM is not wanted by the consumers and is viewed negatively. What this means is it takes value away from the consumer instead of adding to it. It's all part of understanding your customers.

And it's absolutely about what people are willing to pay. It's basic economics, the higher the price the less people will pay, the higher the price the more people will pay. Exactly how the curve moves is dependent on alternatives and necessity. In reality laws tend to move money away from both the producer and consumer. They'd likely be much better off experimenting with their price than with trying to buy laws.
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Anonymous Coward, 30 Nov 2011 @ 4:55pm

How many of the purchases were made with fraudulent credit card info?

What were the companies costs to make those sales?

There is a big difference between gross sales numbers and profit.

From Kassandra's link (above):
"The 10th Drone isn�t available for cash. It is only available for the in-game currency Uridium. Uridium can be acquired by playing the game, or for real money. Bigpoint sometimes holds sales, which means that people can acquire Uridium at varying exchange rates to real money over the course of their involvement with the game..

So Bigpoint has sold 2,000 drones for Uridium that has an equivalent value of �1,000 if a player has not earned any Uridium nor bought Urididum at a discount in the past.

I suspect that Bigpoint doesn�t know exactly how much money it has made from the 10th Drone"

Nice house of cards there td.
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blaktron (profile), 30 Nov 2011 @ 5:17pm

Re: Re: Re:
Ive never heard Mike say its not OK to put up a paywall, just that its frequently quite stupid to.
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out_of_the_blue, 30 Nov 2011 @ 5:45pm

OH, IT'S FANTASY MONEY! Mike's specialty!
"Update: Or.... not quite. A clarification makes it clear that it did not bring in that much. People did buy, but they had to buy with in-game currency."

Don't you have ANY skepticism, Mike? No, you just snapped up the rather stunning E1000 x 2000 figure and gleefully mis-extrapolated. BLATANT FAIL, AS USUAL.

This one just perfectly epitomizes Techdirt: WILD optimism about instant riches, turns out mostly fantasy.
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Eo Nomine, 30 Nov 2011 @ 5:59pm

Against it before you were for it
Well perhaps the reason people have "falsely" thought that you argue that no one should charge money for digital goods is perhaps because you've repeatedly criticized and crapped all over the concept, calling it "a bad idea", "risky", "dangerous" and in defiance of basic economics: http://www.techdirt.com/articles/20071217/120715.shtml or http://www.techdirt.com/articles/20080204/220026172.shtml or http://www.techdirt.com/articles/20061114/181724.shtml
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Anonymous Coward, 30 Nov 2011 @ 6:13pm

Re: Re: Re: Re:
Perhaps part of the point is that putting up a paywall is fine, but subsequently requiring the government to enforce your copy protection privileges once others take that content and replicate it to others is not OK.

What these people are doing doesn't require government intervention being that one's game status is controlled by a remote server and the info is stored on a remote server.

Though, as others have pointed out, perhaps from a gamers perspective, game status should be based on one's merit within the game and not on how much one can pay. Then again, different games can have different niches I suppose, for some who want a game based purely on game merit they can choose games that accommodate their wishes, for others who don't mind a game where people can pay for game status, they can choose their desired game accordingly.
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DandonTRJ (profile), 30 Nov 2011 @ 6:19pm

Re: Against it before you were for it
A "bad idea" and "dangerous" to base an entire business on it, and "risky" without adequate controls and supply-side restraint in place. All he points out is that there are often problems when people fail to recognize that digital goods are not the same as physical goods and cannot always be treated identically. That you fail to see nuance in arguments is nobody's fault but your own.
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DandonTRJ (profile), 30 Nov 2011 @ 6:29pm

Re: OH, IT'S FANTASY MONEY! Mike's specialty!
Why did that initial figure warrant immediate skepticism? Even if it required in-game currency, plenty of games use their own currency without offering the ability to gather it in-game. As for the amount, I know plenty of people who've shelled out large sums of money for digital goods on other services. My friend has bought over $250 in goods for his character in the free-to-play MMO Dungeon Fighter Online. Quite a few people shelled out for a $79 monocle in Eve Online, blisteringly stupid as it was. There are plenty of businesses that thrive on the sale of virtual goods, and depending on how invested you are in a product, it's not unheard of to spend thousands of dollars for virtual rewards. So no, this was not a news story that warranted immediate skepticism, nor did an intellectual honest update warrant your gleeful mis-extrapolation. But then again, I've seen your comments in every other post on this site, taking twenty seconds per to scrawl down some barely-formed criticism before skulking off to the next trolling destination, so I'm not sure why I bother. Perhaps for posterity.
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cgibinladen (profile), 30 Nov 2011 @ 6:50pm

Another perfect example of this is Rock Band. I've paid crap loads for the downloadable songs over the last 3 years, because it's content that actually has value to me. They could have given me the game for free and still made a ton off my purchases.
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PolyPusher (profile), 30 Nov 2011 @ 7:11pm

Feeling good about what you buy
I recently picked up DC Universe since it became free to play. After a weekend of playing I decided I liked the game and I wanted the middle tier membership which you receive permanently for spending 5 bucks on in game items.

I ended up spending 20 bucks on in-game items...

I realized later how significant that was. I had never bought an in-game item before. Because this was free I figured it was a pretty good deal to spend twenty bucks on a game that I liked and get some cool stuff as well.

That shouldn't have worked on me, I'm pretty shrewd about this sort of thing. However, it not only worked and got me to spend some cash, I actually felt good about it...
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monkyyy, 30 Nov 2011 @ 7:35pm

Re:
lol and tf2 do it well
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Stephen, 30 Nov 2011 @ 7:55pm

Hard part is to build a kick a** game
Let�s not forget that someone needed to plan and build a great game first.

We have too many cr@p games that have amazing pricing plans. Too bad that no one will play them.
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Tom Landry (profile), 30 Nov 2011 @ 7:58pm

Ive been playing the Tribes: Ascend beta. Hi-Rez has done such a remarkable job of recapturing the feel and spirit of that classic game that I purchased more "classes". It feels more natural than buying a game at retail price and then paying a monthly fee for a typical MMOG.
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Anonymous Coward, 30 Nov 2011 @ 9:03pm

Re: OH, IT'S FANTASY MONEY! Mike's specialty!
Fantasy money? You mean like all the lost sales that could have been there for each $100 million movie?
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DandonTRJ (profile), 30 Nov 2011 @ 9:04pm

Re: Re:
as a video game player I find it extremely objectionable to give people a pay-to-win advantage

Even if there's no obligation to pay and the benefits of paying can also be gained through normal gameplay? [Extra Credits did a good episode about this, which you might find interesting if you've never seen it.]
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Greevar (profile), 30 Nov 2011 @ 11:21pm

Free to play is good, but...
the way they do it only works if the players are forced into an MMO relationship that demands connectivity to achieve artificial scarcity on digital goods. Their business model relies wholly on their ability to control access to content, which they do by forcing you to connect to their servers or the game simply doesn't work. Take away the online component and the whole thing falls flat on its face.

What about offline single-player games? Ultimately, the best option is to give away all of the digital content for free and monetize it somewhere that relies on actual exclusive and rivalrous goods/services.
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hmm (profile), 1 Dec 2011 @ 1:55am

Re: Two Ways to Solve a Problem
Firstly it should be up to the person with the money how they spend it. If they want to buy something virtual that may cease due to exist due to a power outage thats up to them.

Secondly, (for example) someone in World of Warcraft takes 30 hours to earn say 100,000 gold. In that time with overtime at work they could earn lets say $600. The gold costs $200 to buy online, so overall what they are buying is more free time as the overtime would only run to 5hours.
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PRK (profile), 1 Dec 2011 @ 4:33am

Re: Free to play is good, but...
There are plenty of examples in the Apps/Game space where the game is provided for "free" but you have the option of paying to shorten time-to-build or upgrade your equipment/aircraft.

Examples, Metalstorm or even Smurfs.

ALSO, perhaps you can explain why software applications that cost 699.00 for a PC/MAC only cost 9.99 to run on an Ipad. Granted they don't all have the same utility but .....
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Anonymous Coward, 1 Dec 2011 @ 5:53am

Re: OH, IT'S FANTASY MONEY! Mike's specialty!
Oh OOTB...I know it's not quite up to your $100 million movie/video game/album/whatever standard, but what is these days anyway?

How's your script coming? Any bites on the $100 million funding?

I certainly can't wait until your movie comes out. I'm literally giddy.
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Anonymous Coward, 1 Dec 2011 @ 8:46am

Re: Re: Re:
This post explains how people just still don't get it.

There are things that are copyright infringment.

There are things that are nothing more than people sharing information at a personal level, even if a ton of people can see it in different countries.

The problem is trying to lump both under the same umbrella and make it a crime.
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Anonymous Coward, 1 Dec 2011 @ 8:58am

Re: Re: Two Ways to Solve a Problem
It's all about "know your audience".

Of course, comparing gaming business models to the other Entertainment industries is comparing apples and sparklie ponies.

The gaming industry hit the sweet spot on pricing of digital goods at the right time.

Music and movies, maybe now (Spotify, etc), but that was already after they sat on their hands, then sued their fans, and now all this mess with 'laws must save meh!'.

Big Content is going to work at it to get my money flowing back to them. However, since I haven't gone back to any ex, I'm pretty sure our relationship is over.

For now, here Blizzard, you may have my money willingly, along with more money for pets/mounts for my friends, and a 2nd account, and the next expansion, and this trading card game flag that allows me to go 'haha' on top of my dead enemy.
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ofb2632 (profile), 1 Dec 2011 @ 9:03am

Another free game that makes money
My kids play a free online game called League of Legend. It is completely free but you can purchase several things in the game to 'complete' your toon. My children constantly spend part of their allowance on enhancing their toons.

Free does make money!
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Anonymous Coward, 1 Dec 2011 @ 9:14am

A plug for another free-to-play game that uses a similar tactic: Spiral Knights (by Three Rings, recently bought by Sega), as well as Puzzle Pirates (by the same company). Both use a similar currency system- I'll go into Spiral Knights since that's the one I've tried.
Spiral Knights has three currencies: 'Mist' energy, 'Crystal' energy and 'Crowns'. Doing almost anything in the game requires energy (Mist and Crystal are interchangeable). Mist regenerates up to a maximum limit over 22 hours, while there is no limit on Crystal. The catch is, Crystal can only bought for real money, or for Crowns from other players... who bought it with real money. Crowns are earned by doing in-game activities.
This allows one to play for free for a limited time per day, or pay up to advance faster. As much as it gets disparaged on the game forum for being "money-grubbing", it seems to be a successful business model.
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Anonymous Coward, 1 Dec 2011 @ 9:15am

Re: OH, IT'S FANTASY MONEY! Mike's specialty!
Guys, Guys, be nice. He doesn't understand.

Have you ever been to 7-11, OotB?

There are these cards, right next to the gift cards.

You pick one of those cards, go to the cashier, and pay money.

Then, you drive home, go to your computer, go to Zynga, and input this card number, which gives you 'in game currancy' to buy 'in game items'.

Yes, that is right, real money for fake money. Been done for a long time in the gaming world (First time I personally saw it was in Second Life).

As far as the Update portion, unless you understand how purchasing fake money with real money works, and all the factors involved, it's hard to pin down numbers. There are so many other things at play here, from the company perspective, and the player perspective.

Every industry has their own set of 'seedy underground people' that try to get something for nothing, but you don't see the gaming industry all up in Congress trying to get laws passed.

They innovate; true innovation. Blizzard introduced a way to purchase a pet in their store, and then sell it in game. Basically, it made in-game-gold selling 'legal'.

It gave people a reason not to use the seedy side (aka the mass gold sellers that are mostly scammers, and account hackers), and it makes money for Blizzard in the process.
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Anonymous Coward, 1 Dec 2011 @ 9:18am

Re: Re: OH, IT'S FANTASY MONEY! Mike's specialty!
In game gold 'buying' I mean. Of course buying isn't against the ToS in the US, but gold selling is.

It's basically a 'bring it on' shot from Blizzard to the Gold Sellers.
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Hima, 9 Dec 2011 @ 7:24pm

Re: Re:
If you've heard a speak from Gree's employees, I think you'll find it much more objectionable. They sell an item that make you win a battle against non-paid player. The price of the item is very expensive ( in yen, not in-game currency )

Their reasoning is that the number of people who buy might not be many, but they'll gain lots of money. And they don't care about game balance, because if not so many people buy it, then the chance of a non-paid player fighting with the one buying this item is low. So it won't happen quite often that it will discourage the non-paid players. And if many people buy it? They'll get money.
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kingstondarell, 16 Aug 2012 @ 5:03pm

play video games online for free
Playing video games online for free is so great. This is a great pleasure for us because you can play your favorite online video games for free. This article is just informing us about the output of playing video games for free. know more about play video games online for free just waiting for you to be played.
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