Study: Free-To-Play Industry To Reach $7 Billion By 2015

Free-to-play online games will generate over $7 billion worldwide by 2015, more than double the industry's revenue for 2009, according to a new study published by research firm DFC Intelligence and microtransactions company Live Gamer. Their study projects that in North America and Europe alone, revenues for titles like Free Realms, RuneScape, and MapleStory, which operate on a microtransactions-based model, will more than triple from around $800 million in 2009 to over $3 billion by 2015. Live Gamer and DFC's report, "Consumer Trends in Virtual Goods and Downloadable Gaming in North America and Europe", surveyed almost 5,000 gamers in North America and Europe in January and February 2010 to formulate these predictions. The companies also analyzed more than seven years of Live Gamer microtransaction data from multiple countries, including South Korea, U.S., Japan, Germany, Vietnam, and the Philippines. During their research, the firms also found that the top Korean free-to-play games that require a large client download typically convert more than 10 percent of their users into paying customers, compared to simple social games on sites like Facebook that convert less than one percent of their players. DFC and Live Gamer argue that with lower customer acquisition costs on social networks, games can still generate a satisfactory amount of revenue despite having a large volume of non-paying users. "The free-to-play model is increasing in popularity at an astounding rate, both in the US and worldwide," says Live Gamer co-founder and president Andrew Schneider. He adds, "We'’re seeing average revenue per paying user top $28 per month across the 145 titles that Live Gamer powers around the world. With engaging games and a solid monetization strategy in place developers and publishers can see great success leveraging item-based business models."