Good old Korea... Their market is so different than the West, that it is a breeding ground for innovative business models - particularly for online play. Consider Kart Rider, which you can learn about here or from Wonderland which was what first caught my attention. Some extracts for context:
Kart Rider is free, phenomenally popular and makes Nexon millions of dollars every month!
I know what you're asking: If it's free, where's the revenue stream coming from?
What a great and obvious question! The answer is that Nexon has figured out how to apply the Razor Blade theory of marketing to online gaming, in a spectacular way. The Razor Blade theory, you might recall, is that you should give away the razor so you can sell the blades.
In this context, Nexon allows Koreans -- and remember that about 75% of the Korean population have broadband connectivity -- to play the multi-player cartoon racing game for free.
The money comes from selling virtual upgrades. From fancier looking cars to rockets you can fire at other racers, to balloons and other cute things, these $0.50-$2 items add up fast.
What this immediately makes me want is some survey data about the players or Kart Rider, because if they're having fun and the related social problems are minimal, then I have no problem and hats off to Nexon for such a great idea.
But I have my suspicions that players (especially younger players) may feel obligated to buy the upgrades, in which case they are being socially pressured into parting with their money, in the same way that when trading card games have hit the national consciousness in the West (as happened with the Pokemon collectible card game) it created unstable addictive behaviour.
I suppose the other question is about the upper limit of expenditure. Is it unlimited and ongoing, as with the trading card games, which is in a morally ambiguous place for anyone for whom capitalism is not above reproach, or does it have a limit? For instance, if the maximum reasonable expenditure is equivalent to the cost of purchasing a game, then Nexon have created a different business model which invites more play and in the worst case exacts reasonable maximum costs from its players.
I have discovered I have deep moral questions about the way Wizards of the Coast slash Hasbro operate the Magic: The Gathering franchise, even though I do greatly admire the original play design of the game which was innovative, fun and (most importantly) delivered a quick and variable play experience. But by creating a throughput of new cards that obligated players to invest more and more money with each passing year, the game tipped into something approaching exploitation.
It's the same problem I had with Marvel Comics in the early 1990s, when I parted company with comics, perhaps forever. They tried to crossover every comic with dozens of other comics in an effort to force the readers to buy more and more product. I quickly discovered that what was happening was a decrease in the quality of the comic literature, as commercial interests ran all other considerations underfoot. The situation was not sustainable, thankfully, and it hurt Marvel quite considerably.
Philosophically, the problem is that capitalism offers no exit condition... Make as much money as possible, don't worry about environmental or psychological effects of what you are doing. We are desperately in need of a new model which has the self-regulating sustainability of capitalism, but which takes into account the moral implications of money-making activities. This will probably only come from a fundamental shift in our personal philosophical stances, since as consumers we actually have the collective power to decide what we will allow, and what we refuse to support. In this regard, I encourage everyone to set limits to what they are willing to support with their money, and having done this, to stand their ground, but be open to debate.
From the looks of things, even the most expensive cars in Kart Rider only cost about ten bucks, and so it would be hard to rack up more than forty dollars worth of cost in the world. I wonder if this is because the Korean market will only support this much expenditure, or whether Nexon has made a decision as to how much it is reasonable to farm out of an individual consumer...