Donnerstag, 12. April 2018

Game Monetization: Overview

To name the price of a game nowadays can be downright confusing: Big publishers offer their games in a big variety of packages - from only a key to special editions that involve digital and real items. This is not different from special editions of movies. But games have gone far beyond that.

For a big part this is because the industry itself has changed. Some games just aren't finished after their release. They might promise long term engagement with new content continuously delivered. They might need to adapt to new technology or need a support team / servers running. Those games depend on continued purchases.

From ridiculous ways to deter people from buying used games (including a code in the physical game that can be used only once to unlock the whole game) to smart ways to keep a game running, here is an overview of how people pay for games nowadays:

Buying the game

A lot of games arrive on the market as finished product. The customer pays a full price or after a while a discounted price and can play the game. Sometimes patches are delivered later, if technical issues arise. Some games come in a plethora of different versions - from special versions from certain retailers to real life objects like artbooks, soundtrack, statues and so on - works of artistry to display at home.These are usually more expensive than just the regular game.

Kickstarter / Alpha- / Betagames

Some games rely on crowd funding. The customer purchases the promise of the game and depending on how much the customer spends / which tier the customer chooses, the game can be included in any form - from no game (just a thank you to support the production), to the finished game, to special boxes.
A few games like minecraft and Factorio open up early versions of the game for purchase. Directly advertised as unfinished games that are still heavily tested and might not even work in some versions. The customer pays for access to the test versions usually with the promise of not having to pay for the game again (which will be more expensive once fully released).
For the customers, this carries the risk of never holding a finished game, if the developers cannot keep up or the game cannot be finished in the form promised. The developers have the advantage of being financially supported while working on the game. This works well with first-time projects or creative visions that might not appeal to a mass market. Good word-of-mouth, a good reputation and often some social media skills (as well as luck) are essential to make this work.

"Free" games

Many publishers chose a free (or... "freemium") approach to their game. Either one can play a significant part of the game for free and has to buy the later acts / full access or has a big array of advantages by paying for perks within the game. To offer a game for free means a low barrier of entry: Especially with games that need a lot of active players (of which just a very small percentage actually buys optional additions), the publishers are interested in keeping the game world populated, so that the few paying players don't leave.
There is a golden line that rewards ACTIVE players as much as PAYING players (groups that definitely also overlap). Browser games often use this model, where a lot of playtime will get you to the same point as somebody who spends money on the game.

To turn a profit, these are popular methods to monetize a free game:

In-App-Purchases

In-App-Purchases let the player pay with an ingame currency or real money for things like:
  • Lootboxes - Mystery Boxes that could contain anything beneficial for the player. In another article we'll shine a light on this method, which has been come under fire in early 2018
  • Boosters - Boosters go several ways. In essence they let the player progress faster, by: - eliminating timing restrictions, enhancing success chances, offering a kind of insurance (for instance if rolling dice is part of the game, one gains extra dice rolls) 
  • Socketing +  Enchantment-systems: putting additional virtual power into digital items that will enhance the player's avatar power
  • Vanity Items - Items that do not affect the game play but let the player customize their ingame avatars (be it an actual character, vehicle or building)
  • Resources - from additional inventory space to replenishing an empty mine - resources that are either integral part of the game and have to be bought or resources that go into booster territory: could be gained over longer playtime, but faster progression with buying them
There are companies that don't make games but are specialized in monetization. More research has to be done to really figure out what makes people buy digital goods. But some of the psychological tricks include: first of all a digital currency, that is difficult to translate into real money. Next: A low entry price point, a big reward for the first purchase, timed and limited items as well as certain sales. A careful mix of these techniques not only increases revenue, some big games use sales to almost train their players: A big event comes up that needs the players online constantly? Why not offer some powerful potions ingame that will make the player's character very strong for that big event? If the players invest money, it's likely they will be much more involved in the event and giving other players a sense of competition and being part of something big - something, that is worth investing in... 


Season pass, subscription

Some games - free as well as premium games, still ask for a fee to play the game. This is useful for games that have high running costs or are in need of continuous content updates (like World of Warcraft, which has to offer its players not just a lot of content, stable servers and service, but also content possibly as soon as the most active players have seen all of it.)

Sponsorships or advertising

Some games "annoy" the players with advertising in hopes that the player will pay to turn the advertising off by paying a one time fee.
In some cases brands that wish to address the target audience of a successful game might pay to be represented within the game.
Sometimes its the other way around: Sportsgames might not feel real to their players, if the presence of real-life advertising in sports is not reflected within the game.

Merchandise 

If a game is very beloved and/or the game developer managed to create a powerful licence, Merchandise can be an additional strong revenue stream, because players wish to show off their love for the game outside of it as well.

All in all, it depends heavily on the game itself, which payment methods will feel native. Some games are successful as free games with just very few people paying for boosters. Other games just cannot be made for the regular purchasing price of (in the US) 60 Dollars for a full price game and need to find additional revenue streams, to keep this price. Creating blockbuster games is as expensive as blockbuster movies, but the psychological margin of 60 dollars as full price seems to not have shifted over the past 10 years.


Sources:

https://indiewatch.net/2017/11/26/top-5-mobile-game-monetization-models-for-2018/ (Nov 2017) (aufgerufen 3.4.2018)
https://electronics.howstuffworks.com/free-to-play-games-make-money.htm (2015) (aufgerufen 3.4.2018)
https://venturebeat.com/2015/10/05/an-insiders-take-on-monetizing-free-to-play-games/ (2015) (aufgerufen 3.4.2018)
https://en.wikipedia.org/wiki/Microtransaction (aufgerufen 3.4.2018)
https://en.wikipedia.org/wiki/Software_as_a_service (aufgerufen 4.4.2018)
http://www.pocketgamer.biz/monetizer/59307/18-top-f2p-monetisation-tips-to-supercharge-your-business/ (aufgerufen 4.4.2018)
https://www.digitalriver.com/flexible-monetization/ (aufgerufen 9.4.2018)
https://www.researchgate.net/publication/290578398_Sport_Video_Game_Sponsorships_and_In-Game_Advertising /aufgerufen am 9.4.2018)

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