Tencent Crossfire

Tencent, one of the biggest and around influential IT Corporation in China, had launched its signature first-year person slam game Crossfire in 2008. Based on reported statistics, it has over a million online users e actually day1 and always ranked top place in a lot of game websites. Many Other IT companies always comply profits when forming their price strategy, alone Crossfire is free to play, which seems bizarre and risky. Ultimately, there must(prenominal) be otherwise ways for them to generate the cash to operate the form as well as to earn profits.Firstly, Tencent promised Crossfire is totally free to play, but the underlying strategy is smart and shocking. People may non count it because everybody knows there is no free lunch in the world. Anyhow, when they shake off a try, most of them feel surprised that Tencent might have kept its promise. It is unimpeachably free to register an account and download the game package. Tencent allow not charge you a cent for it even when you literally play the game. However, afterward few days trail play, the commitment Tencent made has become ghastly and weak.That is to say, not only you have to pay, you have to pay a lot. Crossfire is a game in which you provide have a gun participation with other online users. People try their best to kill their enemies with the weapons in their hands. The weapons atomic number 18 usually a gun or other ammunitions, but they be virtual practiseds. When you are new players, it is capable for you to survive with a simple-minded pistol because you are protected from high train players. Yet you will start it is getting harder and harder facing other veteran players with simple, basic weapons in your hands when you finish the rookie training.Thus, in order to survive, to save your dignity, or if you are already addicted to the game, you have to purchase the weapons you need. The higher level the weapon is, the more(prenominal) it costs you. In fact, this strategy is a very clever move in the online game market. By adopting freemium strategy, Tencent enjoys 29. 5% dower of revenue in China2 and is a nightmare for its competitors. First of all, the revenue is from creating and marketing virtual goods at almost zero cost. Moreover, it is a great opportunity to expand their influence in the market. Some cartridge holders, the choices of a teenager can be random.When playing a game, all they want to do is to have merriment with their friends. So if many teenagers are attracted by freemium game at first place, the guys left out will soon switch to the same game. When more and more people are playing this game, the social influence will emerge and spread out rapidly, and other products from Tencent can easily understand advantage of this. Whats more, it threatens or even damages its competitors in the market. By stealing customers from other games, Tencent compresses the room for other companies since the time people drop dead on online game s are stable.That is, they would not double their play time when he plays two games. Therefore, once a customer is attracted by Crossfire, the profit of the other game which offers hourly based payment will be staggeringly decreased while Tencent is risk-free with its freemium strategy. Also, Tencent is a company that is very good at modeling consumers behaviour. Tencent knows that people dont mind to give a try for free stuff because they think they have vigor to lose. This could be true in reality, but not in Tencents world.Online games are addictive, especially for teenagers. Instead of blocking teenagers out by costly payment at first place, Crossfire let them in and enjoys the game. Then, as time goes, the simple challenge cannot satisfy their needs. Finally, they are addicted to the product and spontaneous to spend money on it. Similarly, the proof is not hard to find in the Apple store, in which the freemium games are leading all app revenue models and are nowaccounting fo r more than 65% 2of app revenue. Finally, freemium age has come.As a consumer, it is necessary to know the fact behind the fairy record of free. But for a company, the way of earning money is changing all the time. As the saying goes, nothing ventured, nothing gained. Undoubtedly, Tencent is just the perfect explanation for the proverb. reference book 1. http//en. korea. com/blog/tech/games/crossfire-%E2%80%9Creaches-2-million-users-in-china%E2%80%9D/ 2. http//www. buzzom. com/2011/09/online-gaming-market-in-china-reaches-usd-1-3b-chinese-firms-dominant/ 3. According to Flurrys analysis http//blog. flurry. com/? Tag=Freemium