When you ask around, you still get the feeling that people think – what you don’t pay for is worthless. In line with traditional business models and experiences over 4000 years old, we seem to stick to the thought of associating “value” with “money” – and often, vice versa.
But the winds of change are coming over us: Linux and other free OS’s are all around; OpenOffice is a true competitor of Microsoft Office; free Software that is worth at least as much as the traditional, often costly counterparts.
Now – how comes that “free” is actually a business model? Well – you can claim “not to be evil” and still leave that odd feeling behind; think Google – everything they do is free, but yet, it all has value – to us (Gmail, Google Maps, Google Search, Google Docs – good software, folks!), and to Google (think of all the data they collect).
Or you might stress your brain a little more – how can “free” possibly yield revenues? Well, another example I just read about is “Dungeons and Dragons Online“. Although launched as (yet another) Massive Multiplayer Role Playing Game, in the tradition of “Worlds of Warcraft” and “Lord of the Rings Online”; the game suffered from its initial price (50$) and the monthly fee (15$). And here’s the solution: The game is FREE now. You don’t buy it – you download it; you don’t pay monthly charges – you simply use it. The challenge behind this is to turn it into a working business model – and the simple answer is to make certain items, areas, characters, events or whatever else available only if you pay. you want that shiny dragon armor? No problem – 50 cents. You want a better sword? 1$. An elaborated quest? Maybe 5$. And so on. The interesting thing is that Turbine, the game’s publisher, claims that some people actually spend MORE every month than they used to in the past (remember: 15$ – not less, but also not more; now, it’s truly on-demand!); and actual (paying) subscriptions went up 40%.
You can read more about this on ars technica – and who knows, maybe you are the next dragon fighter?
An interesting development! I’d look forward to seeing some more long term figures for Turbine’s sales after the hype has died down though. In their case they’re using the free sales method as something of an extended demo, which looks to be the same direction Quake Live! will move in after the failure of their in-game advertising tactic. Meanwhile Valve have proved that discounts can generate more interest (and revenue) than a new release. And 2D Boy are going even further and offering their award-winner for whatever price the buyer wishes, taking a leaf out of Coldplay’s book. Free is clearly a profitable price!