Why free

There's a problem lurking in the offices of Square Enix. Ever since games like Dungeons & Dragons Online and Lord of the Rings Online discovered freemium schemes are the secret sauce that turns neglected MMOs into money banks, it's been counter-productive for any unsuccessful MMO to stick its fingers deeply in both ears and pretend that the genre isn't undergoing a sea change.

Enter stage left, Final Fantasy XIV Online.

This month FFXIV became the only free-to-play MMO to ever decide to make the arduous journey back to using a subscription model. The question is, why would a developer do that?

At a time in the industry when "successful subscription MMO" is one of the least-heard phrases in journalism, and when freemium schemes provide one of the simplest strategies for doddling games to see a major turnaround in profit and popularity, adopting a subscription model after a year of free play seems like the most counter-intuitive attitude for a game desperate to re-establish itself.

FFXIV came into existence during a period that was weighted down with MMO horror stories. At the beginning of the summer of 2010, GTA-wannabe All Points Bulletin failed so miserably in its infancy it not only shut down within a month, it shuttered the studio. A year later we saw Jumpgate Evolution and SOE's The Agency delayed indefinitely and canned, respectively.

FFXIV had a luckier time - failing miserably at launch both critically and publicly, but having a strong enough brand endorsement from Square Enix that it was able to weather the storm. The aftermath in 2011 was an ongoing tale of producer Naoki Yoshida spending sleepless nights attempting to reset the memory of every former subscriber by committing to the development of "FFXIV Version 2.0" - a complete revision of the game, built from the engine up.

Yoshida is a saving grace, brought on in the wake of the game's disastrous release. In the last year he's helped set a plan in motion to save and relaunch an MMO that most thought was beyond salvation. But his biggest immediate contribution to the game was a change to the business model for the period running up to the re-launch, removing the subscription price and making it entirely free.

Despite bleeding money through server costs during this free period, the studio was able keep its users happy by offering this free (albeit under-construction) MMO, while taking the risk to re-develop the game under the wing of Square Enix, who firm funded 100 per cent of the project.

This major shift in its business model has suggested the game might finally go the way of DDO, LOTRO, and DC Universe Online, all of which have found success in freemium cash shops. DC Universe Online alone shot up 700 per cent in revenue within weeks of heading into F2P territory, amassing a new userbase on both PC and PS3 platforms - exactly the kind of happy outcome FFXIV would need to reinvigorate its reputation.

Instead, last week it returned to almost exactly where it started. Version 2.0 hasn't released yet, but in the meantime users get to pay a slightly discounted subscription fee until it does, at which point they have to pay a full subscription fee.

It sounds like a recipe for disaster. But in reality it's a strategy in and of itself that might not be so crazy after all. This hints at a complete re-think and downsizing of its target audience and that means a specific targeting of the Japanese market.

During an interview with GameGeex Yoshida explained his logic:

"While this might sound weird to the West, but FFXIV is a game that is developed in Japan [where] the MMO players there are about 40 years old and are used to games that are subscription-based. The overall image of Free-to-Play and Microtransaction-based games is one that is not very positive in Japan. That is one thing that is very different from the West. To immediately jump over to a microtransaction or free-to-play type style might be received negatively in Japan. There needs to be more of a transition period, because there is still that demographic that says 'microtransaction equals bad.'"

It's an odd statement considering free-to-play grew out of the East. DDO and LOTRO developer Turbine has been open about tipping its hat to Asian game development for influencing the studio to go F2P, with the model dominating MMOs in South Korea and China. But Yoshida is explicit about the game's userbase of freemium cynics.

He goes on to say other regions will be taken into consideration in the future, emphasising the West's penchant for F2P. But with the subscription period coinciding with such a major re-release of the game, this seems to suggest Square Enix is putting all its eggs in the Asian basket since its failure elsewhere.

It's unlikely we'll see completely differing business models for every region, but it is much more likely that FFXIV will pull out of the West to focus its interests elsewhere. You can see in this plan characteristics of the Korean MMO Lineage; that game was released in North America but failed to be profitable, leading NCsoft to shut down US servers and instead focus on cultivating its Eastern market.

This seems not only a likely alternative, but one Square Enix may be pushing for. FFXIV will fail to re-crack the Western market without embracing what is now a staple of the genre - the free-to-play alternative - but really, it might just not be looking to do so.