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The Free Zone: Recent News of Interest

Column By Richard Aihoshi on June 19, 2012

Most gamers look forward to industry events like the recently completed E3 for one main reason. They know that publishers use these occasions to reveal additional information about their upcoming titles and to unveil new ones. I'm far from immune to this, but over the years, my balance of interests has shifted. Nowadays, it's just as important to me to see what comes out about goings-on in the industry, both at the shows and elsewhere but in the same time frame. That said, here are a few things that grabbed my attention in the past couple of weeks.

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Crytek's future is free to play

According to an E3 report at Videogamer.com, CEO Cevat Yerli stated on the last day of the show that after fulfilling its current contractual obligations for boxed products, the company will completely shift its development focus to F2P offerings. It has already taken what appears to be a solid first step in this direction with Warface, an MMOFPS that launched in the Russian-speaking market earlier this year. China, where the title is in beta, looks like it will be next. This fits with the category's popularity there, witness CrossFire's having surpassed 3.5 million simultaneous users and its reported 2011 revenue of more than $850 million.

And how about here in the west? I've yet to see an official announcement, but Trion Worlds looks like it has or will soon get the rights for North America. Obviously, this means we don't have any kind of target date yet. In addition, I haven't seen or heard anything worth mentioning about Europe. So, I'd have to guess it's at least several months out in both regions.

SWTOR is taking a step in this direction too

I can't say it was expected, but it also didn't come as a big surprise when BioWare's presentation at E3 included the revelation that its MMORPG will be F2P through level 15 starting next month. It's easy enough to think this is only a form of free trial. However, it's equally not difficult to imagine that the studio and parent EA have considered the possibility of going farther. Indeed, does anyone reading this actually believe the idea has never come up for discussion among the executives who would ultimately be involved in making such a decision?

For what it's worth, I think there's absolutely zero chance that it hasn't been talked about in a serious manner. And not just in the past few months. While it's pure speculation, I believe it was first put on the table years ago. What has changed recently is that EA has pretty much admitted that F2P is a possibility. Why do so if there's little or no chance it will make the shift? Voicing the possibility might well be an attempt to reduce the eventual flak.

This doesn't mean anything more will happen in the immediate or short term. But if the oft-stated feeling that SWTOR hasn't lived up to expectations in terms of sales and conversions isn't off base, it does open up some pretty obvious questions. First, how long is it likely to be before EA is willing to take the heat it will receive for implementing a new revenue stream? Then, once the company has reached such a stage, what's more likely to happen than a shift to F2P, or at least to freemium? In my opinion, the bigger question isn't if this will take place, but when.

NCsoft's new largest shareholder is... Nexon

A larger surprise, although still not huge, is the news out of Korea that Nexon, acting through its Japanese arm, has purchased 14.7 percent of NCsoft for approximately $685 million. The seller was the latter's CEO, reducing his holding to 9.99 percent. Based on this sale, the company's total valuation is around $4.66 billion. To put this in perspective, the highest market capitalization among US publishers belongs to Activision Blizzard, which is in the neighborhood of $14.5 billion. The next two are well behind, Zynga at a little over $6 billion, and EA at $5 billion. And what about Nexon? Its current worth is a pretty healthy $8.2 billion or so.

The big question is one where I can only guess at the answer. What will this mean in terms of how the two Korean giants operate? This isn't a merger, so there's no reason to expect any consolidation. That said, what are the chances that this is just a simple hands-off investment? I can't help but speculate that we'll see cooperation via joint ventures et al.

Given that NCsoft's main strength and focus are in more hardcore games than Nexon's, it's easy to surmise that the two are good fits for each other. While not denying this, there's a lot more to successful partnerships. The devil is in the details and the implementation, not in the broad strokes related to potential. As above, I doubt anything major  will happen soon.

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The Free Zone
Richard Aihoshi has been writing about MMOGs since the mid-1990s, always with a global perspective. As a result, he has observed the emergence and growth of the free to play business model from its early days in both hemispheres.

He is the former Editor of RPG Vault and his column, focusing on free to play MMOs, appears on MMORPG.com every Monday.
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