I'm particularly curious about this market. It's definitely comparing apples to oranges, and thus this article can't really be said to speak to freemium MMOs. The market is different, the products are different, just about everything is different. I am wondering if anyone has done any in-depth research about MMO business models; working for an MMO company, it's obviously something I'm very interested in.
Most 'freemium' MMOs are Korean. I don't mean to make a generalization, but is the Korean gaming culture much more serious than the US/EU one, and thus this model is much more successful in Korea? Many (if not all) of these Korean MMOs are available in the US, but I have no idea if the nonpaying/paying gamer ratio is better or worse, and those figures might unfortunately be private.
I don't think it's apples to oranges, personally. Unless you mean "examples where it does work" versus "examples where it doesn't work" as a business model.
Freemium in MMOs is different from most freemium implementations that startups have. In the game case you have an extremely low barrier to entry, as well as a social incentive to buy into the premium aspect of the product.
With something like, say, the poll service from the article, there's no social incentive to upgrade, and the cost of doing so is non-trivial (more so than, say, a $1 sword).
There's a difference between "hey, now that you're hooked, buy this $1 thing" and "hey, now that you're hooked, buy a $20/month subscription"
That sounds like an argument to change how to make freemium more successful-- it doesn't sound like a counter-argument against the fact that they can be.
Why don't more freemium services allow one-shot addon purchases instead of subscriptions?
I know one of our sites is going to help soothe the pain of purchases by buying "credits" in batches that can be spent in different ways rather than requiring a CC# every single time they want to buy something.
The other poster is right: half of the reason people BUY these things in MMOs and on the SA Forums is because of social status. I doubt many people would buy a shiny Sword of Infinite Destruction +5 in their MMO if they were the only ones who got to see it. People are by nature vain creatures, and if you give them a chance to pimp out their gear and appear more elite than the rest, it's a big bump to the incentive to purchase.
This works great in social networks or game worlds - not so great if you're running a site that does poll aggregation technologies.
I concur; if you study MMOs carefully (okay, not even that carefully), you will notice that the most successful ones tend to be loot-oriented ones, and after a player has hit the level cap, the reason they keep paying their subscription is e-loot, and to a lesser extent, e-friends.
Except for the up-front $10, the Somethingawful Forums do this. A few bucks for an avatar, a few bucks to change your avatar subtitle, etc.. It's all a la carte and all one-time purchases.
They have the advantage, though, of having a huge community and thus a good deal of peer pressure incentive to get the extra bling. That, and your avatar is a "stupid newbie" picture until you buy your own.
Both Imvu and Gaia Online are U.S. companies supported by selling virtual items for the user's avatar to wear. The core functionality (chat/forums) is free. Second Life and Habbo Hotel are similar, charging for various kinds of virtual ownership.
Most 'freemium' MMOs are Korean. I don't mean to make a generalization, but is the Korean gaming culture much more serious than the US/EU one, and thus this model is much more successful in Korea? Many (if not all) of these Korean MMOs are available in the US, but I have no idea if the nonpaying/paying gamer ratio is better or worse, and those figures might unfortunately be private.