Game economy design in Free-to-Play games

Despite the name, free-to-play (F2P) games are big business. According to a year-end report by SuperData Research, the F2P games market is worth a staggering $98 billion and has seen a 10% increase in 2020.

The Asian market is responsible for 58% of total worldwide free-to-play earnings, with huge companies like Tencent pushing a massive portfolio of microtransaction-fuelled games. Six of them are in the top 10 titles.

These top ten titles brought in a total of $18.81 billion, leaving an immense $79.2 to be divided up amongst the remaining contenders.

In 2020, F2P games significantly out-earned the premium market. The 5th highest-earning F2P game, Pokemon Go, earned more than the highest-earning premium game, Call of Duty: Modern Warfare.

The primary driver behind the success of the F2P model is the long earning tail that keeps these games generating revenue. However, making an effective F2P game isn’t as simple as throwing microtransactions into a battle-royale title.

The engine of every high-earning F2P game is a balance and adaptive game economy design that provides value to the player and a continuous revenue stream for the developer.

 

Too Much Currency vs. Not Enough

In-game currencies are the lifeblood of any F2P title and the core part of their game design. A wrongly implemented currency can have a significant impact on the longevity of the game.

If the player finds it too hard to generate any of the in-game currencies, the grind becomes offputting, and the time spent on the game outweighs the rewards accrued. 

With so many competitors on the market, there’s a good chance the player will move on to a new title.

Conversely, if the currencies are too easy to generate, this also diminishes the value of the in-game rewards.  If you’ve ever played a game in god mode, you’ll know how quickly it becomes boring.

Having too much available currency also diminishes the need for players to purchase more through microtransactions.

 

Using Soft and Hard Currencies

Most effective F2P games make use of more than one currency. These currencies are generally divided into two types, soft and hard/premium.

Soft Currencies

Soft currencies are the majority resource in the game and can be earned by in-game activities. The player should spend this kind of currency on a wide range of items, upgrades, consumables, and cosmetics.

While the more valuable items might take intended periods of ‘grind’ to earn enough soft currency to purchase, but they should not be mechanically impossible to obtain.

While soft currencies don’t generate revenue directly, they do get the player used to the idea of spending in-game and are core to the gameplay loop that keeps them engaged and motivated.

Hard/Premium Currencies

Hard or premium currencies are purchased with real-world money. How premium currencies can be used depends on the design of the game.

In single-player games, premium currencies can be used to purchase upgrades that give the player a significant advantage, such as better items, instant rewards, or shorter task clocks.

The one thing that should not be locked behind a paywall is narrative advancement, as this can have a significant negative impact on player engagement.

In multiplayer games, premium currencies should be restricted to cosmetics or items that don’t offer a competitive advantage. There is still a stigma attached to F2P games that use pay-to-win mechanics in a multiplayer setting, which can potentially alienate casual players.

 

Taps, Sinks, and Pinch Point

Setting the rate at which a F2P game lets the player earn in-game currencies and then gives them reasons to spend can be narrowed down with two helpful game design terms, taps and sinks.

The tap is what gives the player a particular resource and a sink is where the player spends that resource. If the output from the tap is too great, the sink begins to overflow.

In F2P games, this overflow results in excess currency, massively devaluing the currency in question and significantly increasing the chance that the player will stop interacting with the tap mechanic.

The reserve of this situation is just as damaging. If there is too little currency coming from the tap, then the player won’t have any motivation to interact with the sink.

A core part of game balancing in F2P games is creating a pinch point. In economic terms, this is the point at which demand for a resource is maximized due to customer concern about the supply of that resource.

In other words, effective F2P game economy design uses taps to offer just enough in-game resources to make the sinks viable and attractive but keeps those resources just elusive enough to motivate players to both keep playing and purchase extra resources.

 

Implementing Inflation

Few successful F2P games only make use of one sink or tap. Part of the earning potential of F2P games is the amount of time players invest in the game.

To keep players interested and motivated, it is essential to introduce new content, often resulting in increased resource generating efficiencies.

These new taps are vital as they act as a reward for the time the player has invested in the game. Implementing multiple resources, especially those that can be converted between each other, creates complex economies that keep players engaged.

Typically, though, allowing the player to accrue excess resources devalues your game and negatively impacts player retention.

The solution to this issue can be found in inflation. In economic terms, inflation is the increase in the cost of goods and services because of an excess of a certain resource, usually a currency.

In-game terms, inflation is the method of adding additional sinks to counteract the implementation of additional resource generation or economic efficiencies.

Simply put, F2P inflation offers in-game upgrades at an exponentially increasing cost in order to allow the implementation of new sources of currency without devaluing that currency.

For example, if the player has a gold mine and purchases a pickaxe that generates one gold per second, then upgrading it to a steam-powered pickaxe, which generates two gold a second, should cost significantly more than the initial pickaxe.

In this example, inflation allows the player to accrue rewards that increase the amount of currency generated (tap) while offering a future upgrade at a price that offsets the larger amount of currency generated (sink).

The downside to inflation is that it can lead to immensely complex economies and make game balancing incredibly difficult. The good news is that there is a solution to this problem. You need to throw out your anchor.

 

Using an Anchor Value

Balancing complex economies, especially those with multiple currencies, so that they add value to the player experience, while also promoting them to invest in microtransactions, is difficult.

The best way to refine an in-game economy and make sure it continues to be balanced is to use an anchor value as a form of yardstick.

In the inflation example above, the anchor value was the time required to generate the gold. Many successful F2P games use time as an anchor value because of how easy it is to track and for the players to understand.

Using time as an anchor value allows game developers to understand the pace at which players can progress through their content. It also allows them to gauge the impact that any item purchased with premium currency to skip those timers will have on the game.

In essence, having a single anchor value allows game developers a solid foundation on which to build their in-game economies.

 

Use Deficit and Surplus to Trigger Player Emotions

Having a balanced linear exchange rate is undoubtedly the best way to balance your game.

However, implementing more varied and complex exchanges based on variables such as specific times or linked to other in-game mechanics is a great way to keep players engaged.

The perfect player experience sits in the middle of hard and easy. Keeping your players motivated and engaged, however, is not as easy as just hitting that meridian.

Players enjoy experiencing highs and lows during gameplay. This is something that F2P game designers can exploit by using surpluses and deficits.

Allowing short-term access to a mechanic that creates a surplus makes the player feel great and keeps them motivated to play. Keeping these periods of surplus short prevents them from devaluing your in-game economy.

Introducing a period of deficit emotive players to seek out greater economic opportunities and efficiencies or invest in microtransactions to offset the deficit. As with surpluses, deficits also need to be carefully limited to prevent the player from becoming frustrated.

 

Balance and Opportunity

For a F2P game, the game economy design is as important as the core gameplay loop or the game’s presentation.

By correctly implementing multiple currencies, controlling them with sinks and taps, offsetting new content through inflation, and using an anchor value to keep the economy complex but balanced, F2P game designers can keep players invested and motivated for years to come.

To learn how you can balance your games using Machinations, make sure you register for our upcoming webinars.

 

 

Bonus

Theory’s always great, but we believe in concrete examples. We’ve created this deconstruction of the full meta of Arena of Valor from TiMi Studios. The model depicts all currencies and XP systems including a thorough description of how it works. This is a great way to showcase all of the above, in the context of a game, and for you to investigate it in real-time. Press play for the diagram to come alive.