Can Acclaim's 'Free' Model Work?

Acclaim is now a publisher of Asian MMOs, and will use a "free" ad- and virtual item-supported business model. But can it work in the West? CEO Howard Marks is betting that it can

Forget about what you knew about Acclaim. In its previous life, the brand had its fair share of hits and well-documented misses across a massive portfolio of games.

However, the decent Acclaim franchises were overshadowed by an influx of subpar licensed games that didn't help Acclaim make good with discerning customers. Of course, the publisher filed for Chapter 7 in 2004, and the company's stable of licenses and brands would be auctioned off to the highest bidder over a period of time.

In late February of this year, the Acclaim brand poked its head out from its own rubble. The supposedly dead company would re-emerge as an MMO specialist, and would publish games from the Asian market, tailoring them for US audiences. It wouldn't be the first time Marks resurrected a "dead" game company; he and current Activision CEO Bobby Kotick brought Activision back from the brink in the 1990s.

The most distinctive trait about the new Acclaim is that it will be primarily supported by two revenue streams: in-game ads and virtual item purchases. Games will be free to download, and if gamers want to enhance their experiences with items, they can. If they want to keep it totally free, they can choose that route as well.

With no real notable precedence in the North American market, can Acclaim make the "free game" model work? Marks thinks that it can, not because of any prior success of similar videogame business models, but because of the prior success of services such as TV.

"I spent a lot of time in Asia studying their model," Marks said. "I think the realization, after really looking at things carefully for a while, is that [Acclaim is] not really in the videogames business. We are in the service business; the entertainment business. We're a service very similar to some other entertainment venues, whether it's cable or TV. We are a medium.

"The videogame business is a product business. It's not a medium. Even though some people would like us to believe that it's a medium, it's not. The main reason is that it's a product sold at retail, it's tangible in your hands and has a cost attached to it. You look at other mediums such as TV, radio and cable -- they're a medium because the product is intangible."

The stigma of "free"

In theory, the term "free" would send consumers flocking to a given product. This isn't always the case in the games business. People, especially more avid gamers, have learned to approach "free" games with apprehension, and often take heed to the adage, "You get what you pay for." Most of the time, gamers associate free games with casual, Flash-based games, but Acclaim intends to offer full-featured, "AAA" PC titles.

Marks realizes the stigma surrounding the concept of a free game, and intends to drop the term altogether. "When I realized we are a medium, the real differentiation would be the concept of free games. The problem I had with free games is that they're also viewed negatively, because in the past, 'free games' meant 'bad games'. We're not really going to use the term 'free game' for that reason."

Acclaim's first release, BOTS, will fit the new model by offering hundreds of upgrades for players' robot avatars. The shooter will be free for download from Acclaim's website, but you'll have to shell out bits of cash to acquire new robot parts.

The game is licensed from Korea's NHN Corp., a company that has already proven its skill at creating a profitable micropayment scheme with its casual-gaming focused website. However, North America is a vastly different market than Asia. More mainstream gamers in the West are just now getting acquainted with the concept of virtual item downloads, and who knows if a Korean game, as Western-tailored as it may be, can relate to a discerning Western audience.

Another issue that is a concern is gameplay balance. With a system that relies so heavily on virtual item purchases, one has to wonder if gamer Sue will have an edge over gamer Joe just because she's willing to spend the bucks for the big gun.

Marks insists that the items for sale will not affect gameplay. "You get advantages by buying virtual items. One of them is visual, but we're not going to give someone a gameplay advantage because they buy something." He added, "We're not offering the big gun for $5 versus a guy who can only get the small gun. We're not going to do that."

Even though Marks is trying to avoid the term "free game," there are bound to be some players that strive to keep the game free by not purchasing virtual items. Marks claims that this situation isn't a drawback.

"It's actually beneficial to us," he said. "The advertising that people put into the game will, in a way, pay for that experience they're having, so we're not really losing money on that person. We're also hoping that they're having so much fun with our game that at one point maybe they want to acquire some items to collect or trade, and be part of a community. We hope they feel positive about it, because there's no requirement to it... Eventually, we hope you buy items, but if you don't, we're okay with that."

But will it work?

When posed with the straightforward question of "Will this model work in the West?", Marks didn't make any huge promises, and instead presented a snapshot of the current market and his belief that the enjoyment of online multiplayer will be the foundation for Acclaim's potential success.

"I don't have a crystal ball, but people would rather play with other rather than themselves, and that is a fact. I've been in this industry for a long time, and I see people having way more fun than they had before. To me, that's a sign of something to come."

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