The Team Fortress 2 Revenue Stream

[Slixshot]

IGN just posted this article that I found incredibly interesting based on Team Fortress 2 and their revenues since launch. Enjoy!

Think about this for a minute. From 2007 to 2011, Team Fortress 2 maintained a fairly consistent 20,000 or so concurrent players. In that time, Valve updated the game more than 100 times, added hundreds of Achievements, items, and weapons, and created an economy for the Steam community where a hat is a valuable form of currency.

Valve programmer Joe Ludwig explained in a talk at the Game Developers Conference that each free update, tweak, and piece of promotional material attracted new players and, in turn, sweet, sweet dollars.

This was before it went free-to-play and quadrupled its player base.



Team Fortress 2 also quadrupled in revenue from September 2007 to June 2011. When it went free-to-play last June, Ludwig explained, that revenue then tripled. "This couldn't happen on a platform with a lengthy certification process," said Ludwig (likely referring the restrictive nature of the Xbox).

In addition to praising the PC platform, he also attributed this enormous success to the way Valve involved its community in the creation of Team Fortress 2 content. The studio engaged players by implementing their gameplay feedback, using cosmetic items created by them, and hyping updates for numerous days. Ideally, players would always anticipate a better experience.

This stuff was all free, so the only money coming in through Team Fortress 2 was from people who hadn't yet played it.

The September 2010 MannConomy update allowed the purchase of individual items, which Valve was careful to balance in a way that both benefited and balanced Team Fortress 2. This is where it started monetizing the game again. The system was successful and useful enough that Valve could start returning some of the profit to the community. Users have earned $3M by selling items on the Steam Workshop.

Because the community exploded when Team Fortress 2 went free to play, this eventually became a huge cash flow. "I'd suggest anyone doing an online only game release free-to-play," Ludwig said. This isn't just because it worked for Valve, but because it's the most sensible means of attracting an audience. He says if Valve knew in 2007 what it knew now, Team Fortress 2 always would have been free.

http://pc.ign.com/articles/122/1220284p1.html

[Epke]

He says if Valve knew in 2007 what it knew now, Team Fortress 2 always would have been free.

it is not like nobody had been proposing this for a while, most developers cannot/could not get their head around it that it could generate a lot of cash

[westsw]

One wonders how much the reciprocity norm functions in the virtual space. There is a natural impulse in most folks to give something when given something. If you let me play a game for free, don't I feel like I should buy something in its economy if I have enjoyed it?

[GoodEnoughForMe]

The question is - if one day, a majority of games are F2P with optional purchases, will those optional purchases still be made in such large numbers?

A lot of MMOs have had success with the model, and it forms the basis of a lot of Facebook games. It'll be interesting to see how far it goes.

[Chip]

The question is - if one day, a majority of games are F2P with optional purchases, will those optional purchases still be made in such large numbers?

That's kinda my fear with this F2P model, currently most people are buying this stuff because they really enjoy the game and they don't have anything else they'd rather be playing. If the F2P model becomes too popular nobody will stick with any as there will always be a new distraction.