In a recent interview, Gamigo's co-CEOs Patrick Streppel and Rainer Markussen talked about going from running a magazine to becoming one of the largest free-to-play publishers in the world. They also discuss why core gamers have been at the top of their pyramid for MMOs and why casuals are at the bottom.
In the interview with Game Industry, Streppel stated that...
We always paint it as a pyramid, right? You have the casual users on the bottom, out of which a very small percentage pay anything, and they don't pay that much. And on the very top you have the hardcore users that virtually live in the RPG and play for 3 to 5 years.Casual companies like Zynga - and even Bigpoint, which is more casual [than Gamigo] - they certainly have a market segment, but we're going for gamers; we're going for people that monetise for a longer time. Although that demographic is smaller, we believe it is a valid business model because there is just so much money to be made with those people. And strategy-wise that's why we're going for old IPs: UFO Online, Jagged Alliance Online, even Cultures.
I think that's a fair assessment given that Gamigo has some pretty core games in their bucket right now, including the extremely gorgeous Black Prophecy, which is like a really hardcore, fast-paced version of EVE Online. It's also easy to get sucked into paying an arm and a leg for cash shop items in free-to-play games because if core gamers are in it for the long haul usually they want the very best for their avatar or account.
Markussen had a little more to share on the subject matter, saying...
I think, for the hardcore segment, free-to-play is the best business model. If you look at the customers we're earning money with, these are the people playing the game for ages. With a subscription fee or a retail price you wouldn't end up with the same amount. You would never ask for a subscription that is as high our average revenue per user.For casual it may even be the other way around. It may be better to get some money on a subscription basis. There aren't too many people paying more than that anyway, and you could probably get some more money than in the item-based model.
I know it was all too easy for me to nearly dump a lot of cash into Level-R with all the awesome car customization features and whatnot. However, Gamigo isn't the only one tapping the core gamer for monetization in the MMO market...EA has really stepped it up with products like Need for Speed Online, which I'm sure has eaten a bit into Level-R's community, as well as the recently launched Star Wars: The Old Republic. Even Ubisoft, known more for AAA console titles and casaul games, is stepping into the F2P arena with the upcoming Ghost Recon Online. So, Gamigo's heads are right, there's definitely a lot of money to be made from the core gamer in the free-to-play area, which is probably why so many publishers are now trying their hand at it.
To ensure that they keep a nice stranglehold on the market of core MMO players, Gamigo has a lot of cool upcoming titles such as Jagged Alliance: Online, UFO Online and even Otherland, which is bound to turn a few heads.
You can learn more about Gamigo or check out the entire interview over at GameIndustry.biz.
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