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Videogame Makers Drop Subscription Fees; Sell Virtual Goods

A tax lawyer friend of mind cannot wrap his hard-charging (read $500 an hour) mind around the idea of giving away content for free on the Internet. It's as if he never heard of King Gillette, or, as my editor aptly puts it, "Well, duh, give away the phone, charge a fortune every month for service... ."

It appears that U.S. videogame makers are finally catching on and, like their colleagues in countries like Korea and China where software piracy is rampant, are giving away subscriptions in the hope that they can make more money by charging players for virtual goods, Nick Wingfield reports.

Sony says it plans to soon offer a free version of its $15-a-month subscription game "EverQuest II," but players can upgrade their characters by purchasing better virtual armor and other items. And Warner Bros. $15-a-month "Lord of the Rings Online" game for PCs will become free, with better virtual goods costing extra, starting in the fall.



Live Gamer president Andrew Schneider, whose company helps game publishers run virtual goods sales, says 10% of players of free games end up buying items, often for a buck or two a pop. It adds up. Users spent an average of $28 a month across 145 titles whose commerce system is run by Live Gamer. "There's no cap on what the user will spend on micro-transactions," Schneider tells Wingfield.

Read the whole story at Wall Street Journal »

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