Who Will Follow In Free-To-Play’s Virtual Currency Footsteps?

The virtual currency Bitcoin, which last week reached $147 for a single coin.

The free-to-play trend in gaming is moving into other spaces in which consumers expect to try out new apps and services for free.

In the past, this has traditionally been facilitated by subscription models. Users get a free version of a product and need to pay to continue using it or in order to access “pro” features. In mobile, at times it’s a simple one-time purchase upgrade kind of model.

In this authors opinion, however, those models are gradually being nudged out in favor of more “micro” revenue models that resemble free-to-play gaming.

Let’s take a look at the early signs of this trend outside of gaming.

Virtual currency economies vs. in-app purchasing

It doesn’t suffice to look at in-app purchases or straightforward “micro” transactions as evidence that the free-to-play model is spreading beyond gaming.

In fact, small purchases aren’t the only transactional element important to free-to-play successes. The F2P model is deeper than that.

Free-to-play is successful due to the combined effect of small purchases (microtransactions) and a well-balanced virtual currency economy. Straightforward in-app purchase models, like upgrading to pro app version or buying a sticker bundle to share emoji-like messages with friends, don’t have an economy to speak of, and therefore don’t really resemble the free-to-play gaming market at all.

Those one-off transaction models are largely based on upsells; one-off transactions. Many of them could likely benefit from more complex economies.

The trend we’re watching explicitly involves virtual currency economies. The best way to identify the difference is to determine whether or not a user can purchase (or earn) in-app virtual currency to spend at a later date. If they can, you’ve likely got a free-to-play based revenue model in front of you.

Do consumer app examples exist?

It’s still pretty easy to argue that free-to-play gaming-like revenue model’s are rare, but they definitely exist.

They can be difficult to identify because they aren’t games. Games have characteristics like achievements, levels, and leaderboards that naturally fit well with earned points and competitive environments requiring currency. Most games inherently aim to mimic the “real world” in many ways, and as such presuppose some sort of economy.

We don’t think about consumer apps the same way.

Nevertheless, there are examples all around us that prove free-to-play isn’t restricted to gaming.

A good example is the dating app world, in which users are able to buy/earn coins or credits which they can use to message other users.

Screenshot 11:5:13, 2:00 PM

 

Envato’s suite of creative marketplaces is another useful example of virtual currency at work.

They keep things very simple and use the currency to simple maintain a credit balance, but extending that to include earned credits or other game-like mechanics wouldn’t be hard.

envato

Who else is leveraging virtual currency microtransactions?

We’re always on the lookout for interesting uses of virtual currencies and microtransactions, and the future looks promising for the revenue model.

Free-to-play gaming is a particularly great use case for monetizing this way, but it isn’t the only space taking advantage of consumer’s willingness to pay for apps and services they began using for free and have come to love.

What are some other examples you’ve seen of this kind of model at work? Let us know in the comments, or hit us up on Twitter and we’ll update this post with your insights!

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