Free-to-play (F2P) games are now a familiar and well-accepted type of game all over the world, unlike years ago when F2P games were only widely played in Asian countries like Korea and China. Now that F2P PC games have gained popularity among US gamers too, one game company is trying to take it one step further: F2P games on consoles.

F2P on consoles might sound very strange, since F2P games were only for PC until recently. Let us meet the members of Perfect World Entertainment, the company that successfully established Neverwinter as a F2P on console and developed their own platform, Arc.

Will you briefly introduce yourselves to us?

Yoon: I'm the head of the publishing division and the platform division, so the Arc platform and anything that has to do with the publishing business is my responsibility. Arc is our gaming platform for third parties who want to publish their games via Perfect World. I started working in this branch in 2008.

Jason: I'm the senior director of the business department. I'm responsible for bringing in new games, either through funding them or licensing them to North American and European markets. I’m also responsible for licensing our games to Korea, Russia, and to other countries.

JooYoung: We are in charge of our California office here, and we also have a couple of studios under our umbrella. We also have our European office in Amsterdam.

What is the unique aspect of this particular branch of Perfect World?

Yoon: I think I can give you a brief history of this company, so you can get a general idea about the company. When we started this business in 2008, we started as a localization company. We localized games that are made in China and published them in North America. We wanted to localize successful MMORPGs that were developed in China and introduce them here in the US. At that time, there weren't many F2P games in the US. Most of the F2P games were from Asia, from companies like Nexon and gPotato Games.

Those companies were not big publishers at that time. So we thought that this was a good time for us to start the business. Business went really well and we made profits within our first year of operation. It was a surprise to a lot of people in China because China didn’t think that the game industry was going to be a huge market for them. After 3 month of operation, we found out that we were making large profits. So we started localizing more games made in China. We localized about 4 to 5 Chinese games a year.

However, we found out that the market was starting to get more competitive. Big F2P games like League of Legends and Lord of the Rings Online came out, and some companies were changing their games to F2P.

So we realized that we need to develop our own games here in the US. We needed games for local gamers. That is when we acquired Cryptic. We also changed Star Trek Online to F2P and started developing Neverwinter. We made more acquisitions like Runic for Torchlight, Unknown Worlds for Subnautica and Natural Selection. Now we are working with Motiga for Gigantic. We also have other studios that are currently working on new projects that we are not ready to announce yet. These new projects will come out in the next 2 to 3 years.

That is the history of our company’s transition. We started out as a localization company, but now we are developing our own content here. Our next plan is to export the games we developed here to Asia, which is the other way around of what we used to do. Nowadays in Asia, companies are not developing any console games nor any PC games, except for Japan. The game industry here has shifted from B2P (buy-to-play) games to F2P games and I think our business model will also work in Asia.

Our strategy as a US branch of Perfect world is to develop more PC and console games and publish those in Asia, because right now, game markets in Asia are mostly focused on mobile games.

Please tell us about your recent achievements.

Yoon: We were ranked as the #1 MMO and grossing game on console. We have a couple of games now. We have Neverwinter, Star Trek, and we will be launching Gigantic next week on XBOX. If you guys want beta keys, just tell us. [Laughs]

Every game we release from now on will be on both console and PC, a multi-platform game. Unfortunately, I cannot share the exact amount of money we are making, but we are making a very good amount of money. [Smiles]

It is very rare for a console game to be F2P. What were your plans when you first tried to make your console games F2P?

Yoon: The US game market is console-centered. If you look at the history of games, every kid grew up with a console, like a Nintendo or Sega Genesis. When they become parents, their kids kind of inherit the gamer-gene and play console games too.

We always wanted free-to-play games on our consoles, but the whole network environment Microsoft and Sony provided did not support that. But with this new generation of consoles, it is possible. It’s still a little bit rough around the edges, but now there is a market and a space for F2P games available on consoles.

It was interesting how, for a lot of people who played Neverwinter for the first time on their consoles, it was also their first time playing an MMO. There were no MMORPGs on consoles, and I believe that has contributed to the game’s success. Neverwinter was successful not just because it is an MMORPG, an open-world MMO that everyone has an access to, but because the console users did not have a PC and were not into PC games but now they can play MMORPGs on their consoles. This has opened up a whole new market for us.

What is the main thing to consider when making a F2P game?

Yoon: The challenge for us is to maintain the balance between P2W (pay to win) and F2P. The advantage for us as Perfect World US is that we get to see both games. We see Asian games that are geared towards P2W, and that’s kind of well accepted in Asia. If you want to get ahead, you spend money, and everyone understands that to a certain degree. I guess Asian gamers are sort of used to that kind of system. But here in the US, people would not accept that. So every time we design a F2P game we try to make it time vs. reward, so that we can make at least some money. Everything you obtain in the game, there is always some way for you to get it free. It might take you longer, but you are not gated by a paywall.

The differences among the Mobile free-to-play market, PC free-to-play market, and console free-to-play market are that mobile games are very analysis-driven, like an extension of the web business. I think that’s how the game is, if you look at how it’s developed. PC and console games are more about experience. People play games through a story. This is the case, especially in RPGs. What we want to sell to gamers is experience. We do not want them to face limits because of the money they spend on the game. We want them to be entertained. We want them to feel that “I want to spend some money in this game not because I have to, but because I’m really enjoying this game and having fun.” That is our key philosophy.

I’m not saying all games developed in Asia are too geared towards P2W, but some of the old games were heavily like that and they’ve been successful. But I think the game industry in Asia is changing now though. A lot of Korean games are making efforts to maintain the balance between P2W and F2P.

When publishing games, there are things to consider like different cultures, different consoles, etc. What are the things that you should keep in mind?

Yoon: For XBOX, everything is done in Seattle. Microsoft has everything centralized so we only have to contact one office, so we handle everything related to XBOX here. On the other hand, Sony is divided in two. They have SIEA, which takes care of North America, and SIE, which takes care of Europe and all other parts of the world. That is why we have our team in Europe. When it comes to PS, we have our European team communicate directly with the people in UK. For North America, we have our team right here, right down the street. That is how we divided our responsibilities.

In terms of marketing, all products and strategies are made here and our European team localizes those. We explain to them what the game is about, what the key features are, and what the key messages are. Then the European team will localize that information so European gamers can find our games more interesting. That system has worked really well for our company.

What is the reason that you decided to publish Gigantic?

Yoon: We are mostly known for MMOs, but we want to diversify our games. In the future, you will see a shooting game published by us, and other different types of games published by us. That is one of the reasons, and another reason is that Gigantic is a MOBA game. MOBA games are really popular right now and so we thought it was an opportunity for us. But most of all, we just like the game. We like the way it looks, the way we play the game, and we loved the team Motiga guys too.

Are you planning to launch some mobile games?

Yoon: Right now it is tough for us to enter the mobile game industry, so unfortunately, we don't have an answer for that. It’s not like we are never going to launch mobile games, but for now we do not have any plans. It’s also kind of related to what the people here are really into. They want to create experiences, but mobile games are mostly focused on analytics and obtaining items. It is hard for us to predict if our games will be successful or not, so we are sticking to what we know best for now.

You said you are interested in the Korean game industry. How do you get your information on Korean games and what do you think about the current Korean game industry?

Yoon: YouTube is probably our biggest source of information. There are some influencers here in the states that cover Korean games. Like Steparu TV, a really popular one that gamers here use to get the latest information on Korean games. We subscribe to those kinds of channels so we can see what the latest information is. Video content is one source for us, and also the regular press outlets like you guys.

Jason: When looking at Korean games, we focus on the "big" games, the games that have a lot of resources put into them to make it really nice and make the gameplay very deep. Those are the games that US gamers like to play, and the games that we are most excited about.

Yoon: We were at G-Star couple of weeks ago and, well, there was nothing much to see. I remember going to G-Star 5 years ago and I was like a kid in a candy store. All these games were great but everything had shifted so quickly. I would love to see more big games from Korea.

Is there any Korean game that you are excited about?

Yoon: I'm personally really excited about Lostark from Smilegate. There are other games from NC Soft like Lineage. We mostly like MMOs. There's Bless, Astellia, Blade&Soul... We always pay attention to Korean games.

Why have you decided to develop Arc, and what are the advantages of Arc, in the views of developers?

Yoon: We saw Steam and, at the time we started our project, Steam did not have any F2P games. The original concept of the platform was a F2P version of Steam, but then Steam started to have some F2P games. We had to evaluate our system and think about the things Steam has that we do not. In terms of marketing, Steam is the king. Steam has this brand recognition that I don’t think we can overcome, so we decided to focus more on publishing services.

I think Steam is a really good platform for selling games. If you want to sell your games, Steam would have a 50% off promotion and that is great. But we promote F2P games; we provide analytics and this tool to promote their games. A lot of American game developers had never done a F2P game. We want to share expertise with them and tell them “you don’t have to worry about that. We’ve done all your homework for you, so just make the game fun and we’ll handle the rest.”

JooYoung: The simple answer would be that Arc is like Steam. Publishing a game is not as simple as it seems. There are many things that developers find complicated, like user account management, user community, and matchmaking. Arc will provide software development kits for those problems, and developers can use Arc’s infrastructure for user communities. Cross promotion with other games is also possible.

How many users do you have?

Yoon: We have over 40 mil registered users on Arc. Even on the console, we have an Arc App on XBOX. This is also an app that did not exist on consoles in the past. How do you communicate with other users on console? It's very difficult. We don't have the information of who the users are; we don't get their addresses. We need to create some venue to collect that information and reach out to those users and keep them with our games.

JooYoung: Most of the registered users of Arc are from North America. The ratio between North American users and European users is 65:35. Russian users take the largest portion among European users.

It is easy for PC users to communicate with each other since they are all on the same application, but that is not the case for console users. Consoles have two different platforms, so we always try to think of a way to unite them and let them play the game together.

XBOX has this app in their market which allows users to communicate with each other within the app, but PS4 doesn’t allow the launch of that kind of app. We are thinking about developing a mobile app that can unite the users. It’s not easy, but communication is important so we will continue working on that.

Korean game companies do not develop console games. What do you think is the reason for that?

Yoon: I think it's because of the market. I think Korea is PC-first. Everyone grew up with the PC and that is what set the market. In contrast, we grew up with consoles first and the PC was a secondary gaming device. The people who are making games were also players originally, so maybe they haven’t got the passion for console games yet.

About 3 years ago, when the Chinese government allowed consoles to be sold in China, we were one of the first companies in China to partner with XBOX and launch some console games in China. It’s just the market that needs to grow. Hopefully the market will grow because there are definitely some advantages to console games.

Also, it’s a cultural thing. I know this because I used to live in Korea. In Korea, people usually have one TV in the living room but the living room is owned by the parents. In America, people live in bigger houses and kids can have their own TV and own gaming station in their rooms. Also there is this common conception that PCs can be used for education but consoles cannot. I think all that adds to the reason why Korean developers don’t develop consoles games.

What are the things Korean companies should keep in mind when they are trying to enter the console game market in America?

Yoon: The biggest challenge is to understand the market. I see it as being very similar to the entertainment business. If I am a Korean director and I want to make a movie for an American audience, it would be challenging. And it's the same thing if I'm an American director making a movie for Korean people; it will be very challenging, right? So I think knowing what the customers want in the console market here, and elaborating on what Korean developers do well, is the key to success.

One great example I have is Samsung. Samsung is a Korean company but it's doing really well in here. I think it's how they approached it. They have localized marketing in terms of how they market their products here. It is an awesome technique. That can be shared across any culture and I think that would work for games too. Also, Koreans are known for online games. I think there is definitely opportunity for Korean developers to compete in the American market.

Do you have plans to launch your games in Korea?

Yoon: For Gigantic, we are already talking with some publishers in Korea. We have 3 or 4 more games that we are planning to launch in Korea.

Korean gamers have different characteristics compared to American gamers. Do you have any worries or plans about that?

Yoon: Yes, we are very aware of that and as a publisher, we share that insight with our developers. If something is too gory, or disturbing to certain group of gamers, we will ask our developers to remove that feature. It is a collaborative process between us and our studios. The studios that are currently working on some games are aware of the fact that it will be a global game. We are in this together, hoping that this is the game that will be successful in China, Korea, and everywhere else around the world. We have our experts in China so we will get feedback from our Chinese team soon. We have that advantage, so we are elaborating on that.

Thank you for a wonderful interview. Is there anything else you would like to say?

Jason: We have a lot of cool games that I think gamers are going to be very excited about.

JooYoung: I want you to know that Perfect World is one of the leading companies in the F2P game market, and publishers who want to work with us are always welcomed. We are ready to launch Gigantic and other games, and hope you like them.

Yoon: We want to see more games, more console and PC games from Korea, and we want that market to hopefully come to you. It's too mobile focused, we want it to be like, maybe 50:50.

I know mobile games are a really good business in Korea and that's why people are focusing on it. I want to talk a little bit about the company here; everyone who works here, works here because we love games. We want to make great games. We care about our customers and we care about developers making fun experiences.