Analyst: League of Legends Leaving Loaves of Bread on the Table

Yeah, that kind of dough.

Detractors have been saying the sky is falling on the free-to-play market since, well, the beginning. Initially, it was a business model that would never work with western audiences, then it was that it was a niche. Something that’ll never be mainstream. Well, now we’ve hundreds of F2P games ranging from the original MMORPG incarnations to new genres like MOBAs and old genres like shooters. Digital platforms like Steam and Xbox Live are both on board. Heck, our weekly F2P showcase wouldn’t need to double up on a game for ages and still have quality options.

Most of these Chicken Little claims were conjecture, biased industry veterans or outside analysts. Today, Gamasutra put up a piece that uses (more than the usual amount of) internal information from one of the watershed F2P stories, Riot Games and its sole product League of Legends. In addition, the analyst, Teut Weidemann of Blue Byte, an Ubisoft studio, uses external details. Analysis complete, he doesn’t pull an end of the world claim, but does see numerous flaws in the business model employed by Riot. Essentially, the California company could be making at least quadruple what it is and still be at the low end of the F2P industry metrics.

His analysis found three basic problems causing the drain.

  1. Too much is given away “for free”
  2. It has a terrible conversion rate, meaning free players eventually paying something
  3. Champions are quickly diluted through price drops and replacement

It’s an interesting read for anyone into the business side of games, wants ammo for a F2P vs paying argument, is attracted to numbers or wants to shit on Riot Games. This is, ironically, a topic we touched briefly upon with today’s MOBA Monday, SMITE and its new Treasure boxes.

His simple recommendation? Don’t model your F2P game after League of Legends. The impressive install base overshadows the atrocious conversion rate.