DFC Intelligence: Free-to-Play will top $2 Billion by 2015

There’s little doubt in today’s digital entertainment realm that consumers are favoring bite sized bits of content over the entire meal. The same is true when looking at gaming – why buy into the entire game blindly, when you can play the game for free, but purchase only the bits you’re interested in? Following this logic, no one will disagree that free-to-play has arrived, and is here to stay for the next foreseeable future. And as developers and publishers must make a return on their investment, we’re sometimes left wondering just how much those firms can hope to recoop. According to a new DFC Intelligence report, the free-to-play market is poised to reach a massive $2 Billion by 2015. And that’s just the English speaking market.

The new DFC Intelligence report pegs the current English language market at around $250 million. Based on growth and consumer patterns DFC sees this number likely to balloon to $2 billion in just 5 years. Primary factors driving these numbers arrive via a maturity of the f2p industry as a whole (i.e. higher quality products arriving on English speaking shores), as well as overall gamer perception that Free-to-Play doesn’t mean any less of a quality gaming experience.

“For many Korean companies the market in North America has not taken off nearly as fast as they expected,” said analyst Insun Yoon. “Much of this can be attributed to the immature infrastructure and a lack of established payment and service mechanisms. The good news is that this is starting to change and consumers are starting to realize that the game play of top high-end F2P games can be quite sophisticated

While it might not be the “be all, end all” figure to look at, DFC estimates that by years’ end, there’ll be around 128 million registered players of free-to-play games. However, Yoon explains, the number to keep an eye on is the conversion rate, i.e. non-paying, to paying. According to Yoon, the industry has seen a steady growth in this conversion. “Once a consumer is able to get a game downloaded and running conversion rates for high-end F2P games tend to be fairly high,” he said.

“F2P games can have multiple payment options and most successful games look to bundle products in creative packages such as the ability to buy a monthly or annual subscription that include a set amount of virtual currency,” added David Cole of DFC. “Creativity in marketing, packaging and distribution are the keys to generating increased revenue.”

If one needed further proof of the concept and model in action, one look at Turbine’s decision to let Dungeons and Dragons Online run on the free-to-play model would settle the score. Apparently, Turbine was so happy with the results that they’re now employing the same model with their flagship title Lord of The Rings Online which goes free-to-play as of September 10th.

For more on DFC Intelligence’s free-to-play market report, please visit them at dfcint.com.


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