Sony Online Entertainment's President on the Future of Free-to-Play PS4 Games

Sony Online Entertainment's President on the Future of Free-to-Play PS4 Games

We sit down with Sony Online Entertainment president John Smedley to recap SOE's first year on the PlayStation 4 and what lies ahead.

Sony Online Entertainment president John Smedley is a busy man. He manages to take a few spare minutes to chat with me, but almost immediately, he's off again talking with a prospective business partner. Behind him, work crews are busy putting together the stage and demo stations for SOE Live 2014, which is set to go live that Friday.

Despite the busy schedule, the former programmer-turned-executive seems buoyant. He periodically pops up during SOE Live to shake hands with journalists, say hello to fans, and mingle wherever possible. "Smed" as many at SOE call him is in his element.

John Smedley on-stage at SOE Live 2014.

It's been nearly year a now since SOE rolled onto the PS4 with DC Universe Online, kicking off what they hope is a new era for free-to-play games on consoles. So far, so good.

"[The free-to-play strategy on PS4] is going surprisingly well, actually DCUO really has taken off. It's the number one free-to-play game on the PlayStation network," Smedley says. "We're also seeing higher purchasing rates from the PlayStation players than we are the PC users. The data is very interesting."

Indeed, with 18 million registered users—some 70 percent of them on PlayStation consoles—"taken off" might be an understatement. But really, DCUO is just the beginning. Smedley and SOE are looking ahead to the future of free-to-play and what he terms "the democratization of gaming." And thus far, that future looks promising.

The Art of Free-to-Play

Smedley has a very particular view on free-to-play gaming. A gamer himself, he is a professed fan of popular MOBAs like League of Legends and DotA 2. Again and again, he approvingly cites Valve and Riot Games as standard-bearers for the free-to-play business model.

"I particularly like Valve's approach because they're very community-centric. For example, I play DotA 2, and I'm able to buy items that directly financially contribute to the teams that I like. To me, that's a very powerful thing. Or what about a $10 million prize, eight of which is from the fans? That's very powerful. So as free-to-play is evolving, it's becoming a way of coalescing communities around games," Smedley explains. "And it's really democratizing online gaming both today and in the next few years. It means that people can find out about a game without ever playing it by watching Twitch, and they can vote very effectively with their time by downloading it as well as their money. So they get more than one opportunity, as opposed to retail where they go out and buy it."

He's a little cagier about the companies he thinks are getting free-to-play wrong, but he nevertheless has strong feelings on the issue: "There is absolutely a lot of ways to do it wrong. I think some companies get too greedy, but I don't want to call out anyone in particular."

DC Universe Online has done surprisingly well for SOE on PS4.

Free-to-play games, of course, remain a hot button issue within the gaming industry and among fans. More and more observers argue that free-to-play is a blight on the medium that encourages publishers to monetize at the expense of good gameplay. Smedley counters that games like League of Legends prove that the quality of free-to-play games is going up: "I think that it used to be true [that free-to-play was overly-simple and heavily monetized]. The games that are coming out now are very high quality though, and people are reacting to that quality by spending money, and more importantly by playing. But I agreee that when it came over from Asia, it had that stigma attached to it that has gone away with League of Legends and games like it."

Nevertheless, Dungeon Keeper and Plants vs. Zombies 2—both published by EA—are two recent examples of games greatly harmed by monetization. Some have even gone so far as to label free-to-play releases as "anti-games," suggesting that they exist in a kind of creative vacuum in which their sole purpose is to make money for their creators.

One of the more controversial elements of free-to-play is the so-called "whale"—a user who spends hundreds and even thousands of dollars on a single game. Whales have in many ways proven morally problematic, with some comparing them to a kind of gambling addiction. At present, however, Smedley says SOE's business model doesn't rely on whales to turn a profit.

"We don't rely heavily on whales. I wish we could, but we don't. The reason we don't is that a large part of our business is still subscription-based. The way we see the world is that we want it to be 'free-to-play your way.' If you want to spend just a little bit of money, you can, and people who want to chase really expensive stuff can do that as well. But you don't need any of it for gameplay. Having a heavy subscriber base means that we don't have to rely on whales. We prefer a strategy where we don't have to have a whole bunch of hundred dollar items," he says. "Because roughly speaking 96 percent of people don't ever pay you a dime, naturally speaking there's a reliance on either whales or, in the case of Riot and Valve, sheer numbers. Make a game that's so good that the sheer numbers give you the revenue you need."

"I think that it used to be true [that free-to-play was overly-simple and heavily monetized]. The games that are coming out now are very high quality though, and people are reacting to that quality by spending money, and more importantly by playing." - John Smedley

For the most part, SOE has managed to put its money where its mouth is. Planetside 2 has been free-to-play from its inception, but its managed to remain relatively balanced in that time, with most of its purchasable items being cosmetic in nature. It's possible to speed up the grind and purchase more advanced weapons early, but the balance has gotten to the point where it's not really necessary to spend money to keep up with more advanced players. This is just the sort of balance that Smedley is looking for.

It's much the same for DC Universe Online, with the exception that it's possible to buy legendary characters for use in player-versus-player combat, just as it's possible to buy premium units in League of Legends. There are plenty of differences between console players and PC players though, Smedley says. For one thing, console owners are more apt to spend money on downloadable content, which Smedley believes is due to the relative lack of games on the PS4 at present. For another, they're young. Much younger.

"Our PC players are probably 80 percent male with an average age of about 35," Smedley says. "And our PS4 players are much younger. They're around 22 to 24 and slightly less male."

They're also more traditional: "They prefer things like DLC rather than an expansion packs, so for things like DCUO we've been doing four DLC releases. That's because that's been on the model on console for a while now. If you look at something like Call of Duty, they come out with four expansion packs for every new release they do. Because of that, we changed our strategy on console and went more DLC-centric, and it seems like it's working. We're really happy with it, actually. The support we get from Sony to get people in the door is great."

Most importantly, console gamers don't mix much with PC gamers, making them a unique audience. Hence DCUO's rather large boost upon the PS4's launch. It may have been dead and buried for PC owners, but Batman and Superman's MMO adventures remain comparatively fresh for newcomers on the PS4.

Smedley, for his part, couldn't be happier: "That's probably the best thing about it. It's bringing our games to a whole new audience."

SOE hopes to make a splash in the sandbox survival genre with a zombie game of their own.

The Future

At present, SOE only has one free-to-play game—DCUO—on the PlayStation 4, but that should change later this year with the arrival of Planetside 2 (assuming it's not delayed again). Further down the road, Sony is also prepping their sandbox survival game H1Z1 for launch, though it likely won't arrive until 2016 at the earliest given that it's yet to even hit Early Access on the PC.

SOE's lineup has been somewhat up and down—Planetside 2 has taken its share of flack for its technical problems, and DCUO is still a middling MMORPG—but they've got some interesting projects in the pipeline. Smedley has particularly high hopes for EverQuest Next, which will meld sandbox and MMORPG elements for an experience he hopes will put SOE "back on top of the mountain." It has already been announced for the PlayStation 4 and could arrive as soon as next year.

As for the present, SOE has proven adept at manipulating the levels of social media. They've developed a substantial presence on Reddit, where Smedley himself has appeared for an AMA. It all goes back to Smedley's notion of democratizing game development, which also ties into transcending the skepticism that naturally surrounds free-to-play games.

"We combat [skepticism over free-to-play] with honesty. It's the only way to combat it. When I say we talk about our billing, I mean we actually say, 'Guys, we have two things we need to accomplish with this. We need to achieve revenue and we need this segment of the playerbase. How do we accomplish that?' And that's where communicating with the players makes all the difference, because you're right," Smedley says. "It's ironic to me that in these free games people begrudge spending money, but it's true and the only way to do it is to be up front and say, 'Guys, we want you to play, someone's gotta pay. Maybe it'll be you.'"

EverQuest Next's intriguing blend of MMORPG and Minecraft-style sandbox elements make it worth watching on PS4.

He continues: "We've actually gotten to the point where we've put out information on not just our games but our business models on Reddit for people to comment on. Very often we change things. We may think something is a great idea and our players may hate it, or oftentimes they have ideas we don't even think of, so we'll incorporate their ideas into what we're thinking. So the most important thing is to not surprise your players. Communicate with them early and often and let them have a say in it."

As the PlayStation 4 continues to mature, SOE will naturally be a part of its plans, which means the growth of free-to-play on console is inevitable. For his part, Smedley clearly senses an opportunity to grow his business on the PS4, but he's also smart enough to avoid pushing the model too hard. EA is proof enough of what can happen when a publisher pushes the model too hard and too fast.

It will be interesting see where SOE is in a few years, when the PS4 has a larger userbase and a few more free-to-play games under its belt. If EverQuest Next and H1Z1 ultimately pan out, they could be in a very good place indeed, which would be more than enough reason for Smedley's good mood to continue.

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Kat Bailey

Editor in Chief

Kat Bailey is a former freelance writer and contributor to publications including 1UP, IGN, GameSpot, GamesRadar, and EGM. Her fondest memories as a journalist are at GamePro, where she hosted RolePlayer's Realm and had legal access to the term "Protip." She is USgamer's resident mecha enthusiast, Pokemon Master, and Minnesota Vikings nut (skol).

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