trendpreneur

I read an interesting post interviewing Chris Anderson, exponent of “Free” (as in beer) — one of today’s emergent business and social models. It’s an interesting topical conversation, what with Google butting heads with Microsoft over Chrome OS — ‘course, the idea of a free operating system competing with Windows is a crazy brand new innovation, innit.

It’s a move we’re all watching intently, of course. As Ben Parr outlines, this is all part of the Google Revenue Equation: the more time you spend on the web, the more Google benefits. Wave and Chrome OS are just feeding into that. This attitude to ‘free’ couldn’t be more different from the free-as-in-speech approach of the GPL and OSS activists, but do today’s Internet consumers actually care?

One of the points that grabbed me from the Anderson interview was right at the end:

…the games world is the most interesting laboratory for freemium right now, and I follow it more closely than any other industry.

Gaming’s been innovating with payment and subscription models, with delivery, with publicity, with ways to grab audience and ways to get people doing social things for yonks now. Create a social network or platform and sooner or later a killer game comes along, whether it’s throwing sheep at people or building a spy ring.

What I find fascinating is the emergence of a single type of game across Twitter, Facebook and the iPhone: if this is the future, I want out. There’s a standard formula for these games: pick a setting (Mafia, Spies, Pirates, Zombies, Vampires..), think of a few vaguely thematic quests, think of an excuse for people to fight each other, do quests, buy items to become more powerful, and (occasionally) feed a social aspect in: friends can be part of your spy ring, or mob, so the more friends you have playing the game the more powerful you become, etc.

These games are absorbing for a few minutes and fairly decently playable if you’ve got nothing else to do, because there’s a sense of constant improvement – yes, it’s basically a textual grind-based MMO that occasionally makes itself relevant by involving your friends. But with six among the top 25 free games, what’s interesting to me is how it all feeds back into this ‘free’ idea.

Why are these games free? They support themselves with ads and various point systems. Install apps from the same developer and get points, complete specific sponsor activities (sign up to spammy websites, for the most part) or exchange cold hard cash. The Spymaster guys are candid about revenue: high revenue per user, and doing fantastically against comparable products. Seems like when there’s an edge available over friends, there’s no shortage of players willing to pay, in money or time.

So how does this feed back into freemium? Ultimately, games work well with ad-supported systems, especially those which actively require you to do something like install a partner’s product, because the results feed straight back into the ingame reward system. People aren’t stupid, and if five minutes filling out a survey makes them a virtual millionaire, they’ll readily sign up.

But in the world of web apps, where there isn’t such an obvious kick-back, and where advertising rings are tacky, it’s doubtful the kind of model being used to great success with the clone army of text-based RPG/MMOs will ever take off. Certainly not in the enterprise world; some consumer web apps might make this work, for example, filling out partner surveys or advertising to have an ad-free Spotify for 24 hours.

In the end, it’s all about consumer effort vs reward. We have smart consumers. They understand things aren’t actually free to make, but they’re getting used to things being free to consume — and becoming blind to advertising on top of all this. The freemium users of today are often supported by the premium users, with the product itself acting as enticement to switch from one camp to the other; but what if the free users could support themselves, in much the same way these ad-supported gamers do?