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The Electronic Entertainment Expo, an annual video game conference and show, at the Los Angeles Convention Center in Los Angeles. (JONATHAN ALCORN/REUTERS)
The Electronic Entertainment Expo, an annual video game conference and show, at the Los Angeles Convention Center in Los Angeles. (JONATHAN ALCORN/REUTERS)

Digital Extremes takes a chance with free-to-play game Add to ...

If there’s a sign of how the times are a-changing in video games, Digital Extremes is surely it. As per usual, the London, Ont.-based studio will be at the annual Electronic Entertainment Expo in Los Angeles – which runs next week – showing off its new console game Warframe, a sci-fi shooter for the upcoming PlayStation 4. The difference this time around: The game itself will be completely free to play when it’s released in the fall.

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Rather than bearing a typical upfront price tag of $50 to $70, as most console releases do, Warframe will be freely downloadable and instead rely on gamers making small payments for new items and weapons as they play. All of the items will be freely available as well, but players who want them faster will be able to get them through microtransactions.

“It’s definitely a lot more than an experiment. My prediction is this’ll be a rapidly growing market,” says Digital Extremes president and founder James Schmalz. “It’s like anything you see in the store or any other merchandise. If it’s new and exciting, you kind of want it now. We certainly take advantage of that desire.”

The free-to-play model has become successful on mobile platforms, with games such as The Simpsons Tapped Out and Clash of Clans generally the most profitable releases for phones and tablets. The idea hasn’t been as fully tested on consoles, however, with only a few efforts so far, such as DC Universe Online and Dust 514.

The scheme is also a departure for Digital Extremes, which has so far worked on traditional console releases such as last year’s The Darkness II and the multiplayer mode for BioShock 2 in 2010, as well as this year’s Star Trek.

The shift in business model is necessary, Mr. Schmalz says, for a medium-sized studio such as his to survive. With 150 employees, Digital Extremes can’t compete with the giant publisher-owned studios that have thousands of employees and huge budgets at their disposal.

“It’s super hard for studios of our size. The solution to that, we’ve found, is in changing the product that you’re working on,” he says.

The game launched as a beta on PCs in March and has been a success so far, he adds, with people playing in a dozen languages in 120 countries. Free-to-play games typically see anywhere between 2 and 25 per cent of players actually spend money. The goal, obviously, is for Warframe to come in closer to the high end of that range.

Digital Extremes’ game is unfolding a little differently from other similar efforts, Mr. Schmalz says, in that he now has almost all of his staff working on it. Other studios have tended to devote a good chunk of staff to first creating the game, then a smaller number of employees to maintain it after initial release. Warframe was instead created by a team of 40 and is now employing 120 in order to pump out new content every four to eight weeks.

As with every exhibitor, Mr. Schmalz hopes to get the game – and the studio’s new, different approach – some more attention at E3.

This year’s show will indeed be all about change, with both Sony and Microsoft talking up their new consoles, the PS4 and the Xbox One, respectively. Microsoft made waves Thursday evening by finally clarifying its policies regarding game licensing and Internet connectivity.

The Xbox One will have to connect to the Internet at least once a day to authenticate the games stored on it. Without that connection, the console will still be usable for watching Blu-ray discs or live television, but it won’t be able to play games.

Microsoft will also allow publishers to decide whether or not to make their games resaleable. Beyond that, only “participating retailers” will be able to sell used games. Players will only be able to give their games to people who have been on their online Xbox friends list for 30 days or more, and such transfers will only be allowed to happen once.

All told, the company is in no uncertain terms cracking down on the trading, renting and selling of games. To say that livid gamers lit up comment boards with angry reactions would be an understatement.

The attention now turns to Sony, which holds a big advantage in the court of public opinion heading into E3. So far, the company has expressed its support for maintaining the used-game market, but many observers expect it will follow suit and allow publishers to decide on whether or not to make their releases resaleable. Both companies will share more details on their strategies in separate press conferences on Monday.

Digital Extremes’ shift and Microsoft’s move to end used games are actually closely related. The console maker is trying to nudge the market toward an always-connected reality, where games are entirely digitally distributed and played online, which is exactly what Warframe is.

The catch is, gamers wouldn’t be outraged if other publishers were doing what Digital Extremes is doing – namely, making its game free, with the option to pay. At this point, Microsoft looks to be advocating a future where publishers are able to charge the same lofty prices on releases without giving gamers a recourse to recoup some of their expenditures.

One way or another, something is going to have to give.

Follow on Twitter: @peternowak

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