Interview: Klei's Jamie Cheng On Indie Free-To-Play With Sugar Rush

Independent developer Klei Entertainment (Eets: Chowdown) has taken the unusual step of developing a free-to-play title, Sugar Rush, for Nexon America —- the publisher's first MMOG developed by a western studio and targeted specifically for North American audiences -- and Worlds In Motion talks to founder Jamie Cheng about the decision, including the perceived risks (and benefits) of entering the still nascent US free-to-play market. What made you decide that you were going to go with the free-to-play model? Jamie Cheng: Free-to-play is something that I harped on about even before I started doing downloadable. On my first year starting the studio it was already here and most people didn't realize it. Even in 2006—when MapleStory had already come in and was already making money. So it was something I always wanted to get into. However, I knew I couldn't just do it without any funding or any experience, so I held off on it. When I saw that opportunity... I thought that's my opportunity. It's a great, perfect fit for all of us. Nexon is the publisher, Klei is the developer. If you think about it from a certain standpoint, they're the label and we're the indie crew that created the game. It seems like it's a much more secure route to take than to go with self-publishing. JC: Oh, boy. Self-publishing is totally not an option for anybody that's never done it before -— for anybody who's not done a free-to-play game. I can't stress enough how much I've learned in the last year. It's kind of amazing. It's a really exciting business. There are so many variables that you can tweak -- you can change the number of users, you can change the conversion rate, you can change the average return per user. Whereas in every other model out there right now, there's only one thing you can change, which is the number of users -- number of paying users. That's it. Pirates of the Caribbean Online uses the "filter group" business model -- players can play free for a while, but then at some point they come up against the pay wall. Nexon's Min Kim has said this model is completely terrible and you should never do it. What do you think? JC: I do think it's completely terrible, because how much of a higher barrier to entry can you create than saying, 'hey look, you need to pay money in order to continue'? You have to give out your credit card to... pay every single month now. That's just such a huge barrier to entry, and we're trying to remove [that]. I wouldn't do subscription. Free to play really is the way to go. Min Kim's point was that games marketed as "free" must be kept free order to work. What do you think? JC: I did a talk at PAX where I was trying to raise the profile of free to play games. I was trying to prove to them -- and I think that my talk did prove to them -- that if I were to build a free to play game the way that we were saying we're going to build it, the only way for me to succeed is to build a good game. And if we have developers coming in, saying that their game is free to play -- but then there's a bait and switch -- that's really harmful. That's my opinion. So how do you raise awareness of free to play's perceived quality? Kim has also said that players tend to perceive a lower quality for a free product. JC: That's one of my pet peeves, one of the things I'm really trying to get out there. That's why I went to PAX to talk about this. Free and online do not equate to bad quality products. In fact, you use them every day. You use Gmail, you use Facebook, you use Craigslist, and these products are free to you. And they're really quality. You don't expect to lose your email, you don't expect it to break down. Right? So free, for games, is the new way to play quality games. It's the only way that it can happen. What about the license agreement, and things like that? It seems a little more complicated when your users are buying in-game items, but then the game could take them back. JC: What Kim was saying is that you should treat your items as rentals rather than as purchases. It's all covered at least in the EULA, that the player doesn't actually own them. We have an expiry period and all that kind of stuff. So if you treat them like rentals, you're going to get away from that problem -- however, you're also going to create other problems where people don't want to pay for rentals. In many cases, they have maybe not explicit, but implicit expiry through the licensing agreements -- but really, that's kind of a worst-case scenario. You don't ever want to take these things from them -- well, sometimes you do want to have things expire so they'll keep paying money. A lot of the criticism of free-to-play is that it seems so business-oriented. But as an indie, it's really hard to get money to survive, so it seems like a viable option. But it also seems counter to indie spirit. JC: Luckily Nexon has the standpoint that we're not going to release the game until it's a quality game. And in fact, if you get into this business, you realize that you can't make money if you don't have a quality game. It's not like retail business, where you have to ship at a certain date or you're going to lose money. It's not like that at all. You want this game to keep going and going and going. And also, you're not investing huge amounts of money -- you don't a 100-person team working on this project. We have 11 people working on this project. And so it's tiny, and we're going to keep at it until we have a really good product. And in terms of the fun value, the fun versus the business, I think the key thing to remember is that, in this business, you have to make the game fun first before you can make any money. And if you take it the other direction, you're just going to fail. That's the only conclusion. How did you devise your item model? JC: We haven't started selling any items yet because we're still in beta, but in terms of what we plan to do, we draw a lot of experience from [Nexon's] current games -— MapleStory and Kart Rider and all of those, and their successes. The basic rule first is that you don't break the game. You don't allow people to abuse or buy their way to the top. And I think that that's something [where] you again have to educate the users -- that no, this isn't a game where you have to pay in order to come out. That's not the case. You pay in order to express yourself, you pay in order to have a better social experience. And that's our kind of approach, and that's how we do it. How do you decide what's appropriate for your game? JC: Before we launch the game, it's the developer's decision, plus feedback from other people and Nexon. We have quite a bit of freedom, so for example, if we say we're going to create fifteen new items, we have one artist who's just amazing at doing this. She creates these outfits. However, once the game launches, Nexon tells us what people are asking for. And so we do much more of that, and we're totally open to it. We can't expect to know what the people want. It's really interesting how responsive you can be as a result of this model. A popular game comes out and the response is often, 'oh, we've got to have a game in that genre now.' With a free to play game, you can be a little quicker because you can just add desirable features as you go. JC: Right, instead of having to develop a whole new game for that feature. Absolutely. It is actually kind of scary... how competitive it's going to be very quickly. Although I do think in North America it's going to take a couple of years before people start catching up. So I do feel quite privileged to be able work with Nexon in order to get my knowledge up quicker. It seems beneficial to be on the ground floor of this, because it looks likely to be important going forward on the PC -- and who knows, maybe it'll even happen more on the consoles. JC: That's right. Although, funnily enough, Rock Band is this thing where everybody is like, 'look at the DLC, it's so awesome! This is the proof that DLC is working.' And yet it's funny, because how much bigger of a barrier to entry can you have than a two-hundred dollar piece of equipment that you have to put in your living room? And yet despite all that, DLC worked. It's just the tip of the iceberg. One of the reasons why a game like Jagex's free to play MMO RuneScape is popular is because it's browser-based. I'm surprised that not very many people have capitalized on that. JC: We actually looked into it. First of all, we're working with Nexon and their platform is on PC -- that's what they do, PC downloadable. And so there wasn't really much of a choice for our first game. However, I think that's something we're always looking into. I guess you'll be using Nexon's marketing, but how do you hope to get visibility yourself, for your kind of game? JC: We do our own things; for example, we were exhibiting at PAX, and that was a Klei thing and not a Nexon thing. And we'll continue to promote ourselves as well. We think that it's important for people to understand that this is built by us and they can see the same kind of quality shine through. I think that will be beneficial for all parties, to show that we were a big part of it. All the games that we've ever made have been well received. We did Eets:Chowdown, we helped on N+, now we're doing Sugar Rush. All of these came from that desire to create really great games.