For those of you that follow MMORPGs, you’ve probably noticed that the big trend among new games is the free-to-play model. For those of you that have actually played some of these games, you’ve probably noticed that free-to-play either becomes pay-to-play or pay-to-win pretty quickly. Although many developers are gamers themselves, they are also attempting to create a profitable product, and when those two instincts collide the business side inevitably wins. This creates friction with their user bases, and if left unresolved inevitably leads to the game failing.

I recently started playing Marvel Heroes, an MMO based in the Marvel universe, which uses a League of Legends-style Heroes system. The launch has not exactly been smooth, to say the least. So, speaking as a both a gamer, with insider knowledge of gamer psychology, as well as someone with a business background, I’m hoping to bridge the gap and explain how it’s possible to create a Free-To-Play game that convinces the gamer to spend money and make the game profitable.

MMO’s, as a general rule, are all based the classic pencil and paper style role playing games. You have a character, with statistics. You defeat enemies and gain experience, which eventually allows the character to level up and become stronger. You also have items, which affect how much damage you do to enemies and how well you take damage yourself. The same basic framework has been in place for nearly fifty years, starting with 1974′s Dungeons and Dragons. You can slap whatever you want on top of this framework, but it’s the core of every MMO and RPG out there.

So, how do MMORPG’s monetize this framework? Well, the old model was a subscription service, i.e. World of Warcraft. You paid your $15 a month, and got access to everything and could play to your heart’s content. With free-to-play, the game itself is now free, but you have to either earn in-game currency or spend real money to unlock items and features. Free-to-play is based around the idea of micro-transactions; rather than charging $15 a month and giving everyone access to everything, you’re gambling that some players will spend $50 a month on desirable items and characters, and that there will be more of them that do than players that spend nothing at all. Given the success of a number of free-to-play games, it’s usually a good bet.

Here’s the thing, though: you need to give the players a reason to pay real money for something. This is obviously easier with licensed MMOs like Star Trek Online and Marvel Heroes, as players most likely have a favorite character or item they really want to play with, and if the price is right, have no problems buying it.

That brings us to our first, and probably most important rule.

Rule #1: Don’t gouge your playerbase.

I can’t emphasize this enough. Players have to feel like they’re getting appropriate value for their money. If something costs $20, it should FEEL like it should cost $20. The absolute worst thing that a developer can do is price an item inappropriately. A lackluster purchase at a high price-point almost ensures that that player won’t be buying anything else, and may leave the game altogether.

The easiest way to get around this is to price everything affordably. Most gamers have no problem dropping $5 or $10 on a whim. Once you start moving beyond that, players have to actually THINK about what they’re buying, and that’s where you run into problems. The free-to-play (F2P) model is based entirely on the idea of painlessly separating gamers from as much of their money as possible, and them thanking you for the opportunity. As soon as players start thinking that they’re paying a decent amount of money for pixels and code, their wallets snap shut.

This is the first area where Marvel Heroes has run aground. Players get three of five Starter Heroes free. All the other heroes cost between $5 and $20. Popular characters like Deadpool, Iron Man, and Spider-Man are expensive, while the Starter Heroes and less popular characters are cheap. Consequently, you see a lot of the five Starter Heroes, and very few of the more expensive ones. Ironically enough, three of the five Starter Heroes are, at the moment at least, the best in the game in specific roles, which negates the need to buy another hero for anything other than personal preference’s sake.

Pricing isn’t everything, though. It’s also important to know what to make free, and what to charge for.

Rule #2: Mechanics are free, vanity and services are not.

One of the big problems with World of Warcraft‘s transition to F2P is that Blizzard locked a bunch of features behind a paywall. Essentially, F2P WoW is a demo, and you have to pay to get the real thing. This is crap, and gamers hate it. If it’s a demo or a trial version, call it a demo or a trial version. Don’t call it F2P when it’s really just gimped.

League of Legends does this the right way. Champions, the characters players play with, are generally free. Their costumes, of which there are many, are not. This is where LoL makes their money. It’s all in the customization.

Star Trek Online does something similar; there are a ton of free ships available, many of which are perfectly viable through endgame content. If you have a favorite ship, you can buy it.

As for services, these should be cheap. They should be the ultimate impulse buy. Want to try a new build for your character? That’ll be $3. Want more room in your inventory to store items? That’ll be $5. Want to start a new character? That’ll be $10. We’ll pay for convenience, just not that much for it.

This is another one of the areas that Marvel Heroes has botched. Services like resetting a character’s powers, which has to be done at least once once you hit endgame content, expanding the inventory, etc. are too pricey. Moreover, the titular Heroes themselves aren’t compelling enough to warrant a purchase, especially as they’re constantly being balanced. The constant balancing of a new game can make entire character builds useless after a single patch, and that makes for angry gamers. Heroes should be free or cheap; that’s what will keep people playing and ideally spending money.

Speaking of money, the best F2P games don’t just rely on real world currency.

Rule #3: The in-game economy will make or break your game.

Much like the real world, the success of a game will often rest on the success of its financial markets. EVE Online is a tribute to this, as it’s basically become Excel with a fancy UI, and the players love it.

There are two features every game should launch with: player to player trading, and an exchange/auction house. Nothing from a gameplay perspective will invest players quite like making large or small sums of entirely imaginary currency. Moreover, because so many games use a Random Number Generator to determine what items with what statistics are dropped from dead enemies, the chances of a single player finding that perfect item are astronomical. However, the chance of that item appearing somewhere, sometime among the entire playerbase is good. When it does, it makes two players very happy: the one that sells it for a lot of in-game currency, and the one that buys it to complete their build. That’s a great return on investment, and it keeps players sticking around.

Marvel Heroes launched with neither. Consequently, players are stuck with lots of items they don’t want or need, and are just converting them all into Experience Points (XP) or currency. Star Trek Online‘s in-game economy, on the other hand, is very robust, even allowing players to sell things for in-game currency that can only be purchased with real world currency.

Diablo 3, while not technically an MMO, is an exemplar of what happens when your economy goes horrifically off the rails. A a recent patch caused players to be able to generate huge sums of credits through an exploit, which they immediately laundered through the Auction House, causing dramatic inflation and a near-revolt, as the vast piles of gold players had accumulated were now worthless, as many other players had much vaster ill-gotten piles of gold. Basically, Diablo 3 became Zimbabwe, and players were PISSED.

Of lesser, but still significant importance, however, is how you cross the in-game/real-world currency divide.

Rule #4: Let your most hardcore players get stuff for free.

In Star Trek Online, there are two forms of in-game currency: Energy Credits, which are rewarded by completing missions, killing enemies, selling items, etc., and Refined Dilithium, which is used to craft and purchase high end gear, ships, and Store currency. While it’s easy to amass large quantities of Energy Credits, Refined Dilithium is limited to a certain number of units per day, which means that a player can’t endlessly farm their way to a new ship or new set of weapons. There’s only so fast you can go, and that keeps things balanced. However, hardcore players will spend hours and hours a day grinding currency to afford the best gear.

Time-locked currency as a replacement for real-world currency lets players pay for convenience (getting something now) or grind for value (getting something for free). Most players are “casual” and will gladly pay $5 or $10 if it means not spending days or weeks grinding for arbitrary currency, but the hardcore will spend those days or weeks if it means getting something for free. Your hardcore players will be your evangelists; humor them, and the rewards will be great.

Speaking of grinding, currency isn’t everything; there’s also items.

Rule #5: Pay attention to itemization.

One of the key elements of MMOs are items. They’re the stuff players will spend all that currency, in-game and real world, on to make themselves more awesome and have bragging rights with their friends. Itemization, for the uninitiated, is the balance and distribution of items, their types, and their various effects, powers, and statistics. The unique combination of certain stats makes an item significantly more valuable, which feeds into the in-game economy and makes the players happy. Moreover, the quest for the best items possible is a big part of the MMO experience, and what keeps players coming back for more.

Itemization also happens to be the one area that most developers utterly fail at.

The problem with itemization is synergy. 99% of items will be utter crap; that’s how it’s supposed to be. However, with MMOs and RPGs, certain stats will be more valuable to different character types. The end goal should then be to ensure a wide variety of items that fit within a set of rules for each character. For example, a melee character with high health and defense would benefit very, very little from an item that boosts a character’s ability to cast spells. It’s an exceedingly tricky element to get right, and no one does it particularly well.

However, one thing that is easily controlled is rarity. Generally speaking, every MMO has the same breakdown in terms of rarity: Common, Uncommon, Rare, Very Rare, and Unique. Commons are crap, Uncommons are okay, Rares are good, Very Rares are very good, and Uniques are excellent or have special abilities. For high level players, anything other than Very Rares or Uniques isn’t even worth looking at. So, it makes little sense to have the game continue to drop Commons, Uncommons, and Rares for these players.

This is actually one of the areas that Marvel Heroes got right. Namely, the ability to upgrade the in-game crafter to allow for Rares to be converted to Very Rares. It’s a unique feature that makes levelling up the crafter worthwhile, and adds value. It’s a feature well-worth exporting.

There’s obviously a bunch of other stuff that goes into making a great F2P MMO experience, but these five areas are what keeps a playerbase active and spending money. Get these right, and everything else just needs to be so-so to make a good, profitable game.