Free-to-play is at the forefront of Ubisoft's new strategy

This story about playing games for free, boiled down, in 1:43 minutes.

What's the fuss?

Previously intending to release 3-4 premium AAA video games per year, Ubisoft has seemed to reconsider in favour of free-to-play games. Guess the free-to-play business model is too strong to resist.

The situation

Ubisoft is a powerhouse in the video game industry largely because of one thing: their intellectual property. Their "premium" franchises, such as Assassin's Creed and The Division, are household names thanks to the enormous development costs, marketing costs, and other resources behind them. These games usually cost $79.99 CAD upfront, which can be a tough pill to swallow for many.

Back in February 2019, Ubisoft pledged to launch 3-4 of these premium games per year, assumedly priced at $79.99 CAD per copy. However, this no longer seems to be the case as per their latest conference call. Despite the plan to continue putting out AAA games, the company expects to put a heavier focus on free-to-play titles that eventually will blossom into AAA titles.

Boiling it down

Originating in the early 2000's, the free-to-play model really took the gaming world by storm with the introduction of mobile gaming. In 2011, Apple reported that revenue from free-to-play games exceeded revenue from premium games (games that costed money upfront). Even though gamers didn't need to spend a single cent, gamers that did spend money on in-game items collectively spent enough to make these free-to-play games exceedingly profitable. The success of this business model has since been widely adopted not only in other mobile games, but for PC and consoles games as well. 

Not only can the free-to-play model be more lucrative, but it can be a fantastic "marketing" tool for getting new players attached to a specific franchise given the reduced barriers to entry. This may be Ubisoft's strategy with their announced The Division Heartland, a free-to-play title within the The Division franchise that could attract new players (and spenders) to the series.

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