Warner Bros. Makes Smart Move Into Free Content With Lord of The Rings Online

Last Updated Jun 9, 2010 10:43 AM EDT

Warner Brothers (TWX) is the kind of old school media firm better know for bringing piracy lawsuits than experimenting with free content. But back in April, Warner Bros. acquired Turbine, a video game developer that has been experimenting with new pay models. Now the pair have partnered to make one of Warner's most lucrative franchises, Lord of the Rings, a free online game.

The story begins back in 2006 when Turbine premiered an online version of the role playing classic Dungeons and Dragons. The game was an also ran, achieving only a moderate success until December 2009, when Turbine decided to offer the title for free. "The universal truth about massively multiplayer online games is that people play because their friends do," says Adam Mersky, communications director at Turbine. "And they don't play when they find it's too expensive." Before December, gamers only options with Turbine had been a subscription for between $10-15 a month. "What we needed to do was open the gates way wider, to give gamers flexibility."

Turbine made the game free, but gave perks to subscribers and added an in game store flush with virtual goodies. Within the industry the move was viewed as an odd, desperate attempt to resurrect a title that never really flourished. But the results quickly changed that perception.

"We got a huge influx of over 1 million new players within the first few months of making the game free," says Merksy. And it wasn't just folks taking a free ride. "The number of paid subscribers we had doubled as well." In all, Mersky says revenue increased by over 500%. In its 2010 Online Gaming Report, NPD found that Dungeons & Dragons Online had jumped from #11 to #3 in terms of overall popularity.

Warner's purchase of Turbine, reported to be worth around $160 million, is a refreshing endorsement by a stodgy media firm of this kind of flexible pricing. Warner is smart to bet that the success of D&D Online was no fluke, and that the renewed attention the free model will bring to Lord of the Rings Online can be leveraged to the benefit of the entire Tolkien franchise for years to come.

Image from Smartcode

  • Ben Popper

    Ben Popper writes at the intersection of culture and technology. His work has been published in the NY Times, Washington Post, Fast Company, Rolling Stone, The Atlantic and many others. He lives at www.benpopper.com.