I’m not a fan of the free-to-play business model, but I could be, especially with giftgaming. Giftgaming is a start-up that connects brands with publishers – a b2b. From a gamer’s perspective, it’s a way to get free stuff. I like free stuff and anything that will get me free stuff is cool. But will giftgaming do what it says it will do? Their tagline is, “We make gamers love brands”. Let’s look at that from a gamer’s perspective.
Just to note, there’s no cash flow yet. According to giftgaming’s site, it’s currently in private beta. It’s gotten love from TechCrunch and others. So there are smart people who see this as a legitimate disruptor.
The way it works is this:
1) Brands and game companies decide to work together.
2) The game developer integrates giftgaming service into the game.
3) When players interact with a giftgaming-charged ad, they get free gifts like in-app purchases and coupons paid for by the brand.
The objective is to help brands optimize their ads and game companies to retain gamers. And gamers get free stuff. So, win-win-win?
The key stat they’re using is that 50% of games are FTP, but only 1.5% of players make in-app purchases. When faced with a situation where players need to purchase or quit, many quit the game. So, giftgaming is supposed to help retain that gamer by providing a platform where s/he will get that key in-app purchase for free.
I love the idea, but at the same time, it feels artificial. Like Botox.
Ultimately, I play a game because it’s fun. If it’s not fun, I quit. If it’s more frustrating than entertaining, I quit. If the game is top-notch and replayable, then I will happily spend money on it. The key factor to remember is that there is a TON of FTPs out there. I mean A LOT and more keep entering the market. I play multiple FTPs at a time. When I get to a point where I have to spend money, I play something else. A gift might keep me playing a while longer, but after a while, I might still move on. How many gifts will keep me playing an average game? How many gifts will brands purchase?
Customers want good products. If the product is good, it will attract customers and generate revenue. The FTP model is flawed because with a few exceptions, FTPs are not good products and competition is fierce with very minimal barriers to entry. So, it seems there is some wishful thinking about the potential success of giftgaming.
However, I love the drive here. Perhaps an improved method of monetization will lead to better products in the market. I’m all for it and can’t wait to see how it rolls.