Word: freemium
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...growing segments - multiplayer role-playing games and social games - are increasingly generating impressive revenues from tiny transactions. Most role-playing games, or RPGs, originally relied primarily on subscriptions for income. The enormously popular World of Warcraft series remains subscription-based. But the trend is the free-to-play, or "freemium," model. Under this system, gamers can play as long as they want at no cost, but they usually find the games are more entertaining when they pay small fees to outfit their characters with virtual weapons, useful tools and other accessories. The popular virtual world Second Life garners some...
...being locked into playing just one or two online games by stiff up-front charges and subscriptions. And, freed from paying a set fee each month, some players actually end up spending more. Four years ago, Shanda Interactive Entertainment, China's biggest online-game developer, ditched subscriptions for the freemium model and turned around its sagging fortunes. Kristian Segerstrale, CEO of London-based social-gaming site Playfish, says micropayments work because online games aren't a product, they're an ongoing service. "It's nonsensical to pay up front for a service," says Segerstrale. "You don't pay up front...
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