Video game monetization

Impact[edit]

The video games industry continues to grow as it is expected to generate $138 billion U.S. dollars in 2018, showing a 13.3% increase in revenue from last year.^[31] In 2014, digital download model made up 52% of all game sales and overtook retail purchase, the long-time industry standard.^[32] Recently, many video game publishers have adopted the games as a service model where a game continues to generate revenue after its release. As a result, a game tends to get extended support and more contents post-launch so that it can be monetized via other methods in addition to retails and digital downloads, allowing the consumers to make the most out of their purchase.^[33]


However, since the method of monetization must be decided before the game production, it may affect the game's overall design and how players will interact with the game.^[34] Monetization trends like games as a service will shape how new games are designed, potentially making genre that are easy to monetize more popular than others.^[35] As a result, proper consideration of any strategy must be given during the design process. Improper consideration of balance between good game design and effective monetization can lead to either players feeling extorted by the game and its developers or a failure of the game to produce enough revenue for the game to turn a profit. In both scenarios, a game in question is likely to fail once on the market, the difference being whether it fails critically or financially.^[36]


In order to fund themselves, many independent game developers raise money by crowdfunding.^[37] They can also use crowdsourcing to break down the cost of development by distributing the workload to self-motivated individuals.^[38] Another way for independent developers to fund their games is to release an unfinished game as an early access where the players may purchase the game at a discounted price before it is complete.^[39]


Microtransactions have recently become a popular monetization model in massively multiplayer online (MMO) games. Previous to this development, the majority of MMOs relied on the subscription model, where users paid a monthly fee to the developer for continual access to the game. Some MMOs have had difficulty in turning a profit under this model however, thanks to too few subscriptions to cover operating costs. This has prompted several MMOs to experiment with alternative monetization strategies, ultimately leading to the adoption of microtransactions. While some MMOs continue to operate under the subscription model, many now have moved to microtransactions to ensure financial stability.^[40] With this shift, numerous virtual goods and services in MMOs that may have previously been available through normal play under the subscription model now can only be obtained through real currency transactions and it was expected that the microtransaction model would continue to be used under this model.^[41] However, overuse or improper application of microtransactions can make the player base feel forced to pay money and discourage them from playing, while the underuse may lead to too few microtransactions taking place to support the game and its developers.^[42]


Indirect monetization has undergone a recent surge in popularity as well. Through a combination of the propagation of both smartphones and Indie developers, the mobile games market has flourished. Although it had only 18% share of the video games industry in 2012, mobile games account for 51% of the video games market in 2018.^[43] Due to generally lower development, marketing, and maintenance costs as well a large target audience of players, mobile games are able to survive on a smaller income than most other varieties of games. The process is risky, however, since mobile games may often be hit or miss in their success. Games that pull in large numbers of players do well thanks to their advertisement model while those that fail to garner wide appeal do not last long on the market.^[44] Some have also criticized games implementing the indirect model as many games are made under it that are of low quality, or are non-user friendly with their monetization methods so as to maximize their income at the expense of player enjoyment.^[44]