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The Evolution of Computer Gaming Monetization

Posted In Games - By Techtiplib on Monday, September 16th, 2019 With No Comments »

Computer gaming has come a long way since games started being developed in the 1960s. Some of the first games were produced by hobbyists and released free of charge, so that fellow computer fans could enjoy them. However, it wasn’t long before game designers and developers found ways to be compensated for their time.

Gaming Computer Desk

Why Monetisation?

It would be nice if computer games could still be free for gamers, but they cost a lot of money to develop. For some, it may not be immediately obvious why a game purchased on a disk would cost so much, since the material cost of each unit sold would be little more than a couple of dollars. However, creating the game itself takes a lot of resources, including hiring individuals to design, code, test and sell it. And as computer games have become more detailed and more complex in size and scale, larger teams of people are having to spend longer just to make these games. 

That’s why it’s important to monetize computer games. If publishing houses and development companies couldn’t make a profit from selling them, the people behind them would never get paid. Here are some of the most popular ways to monetize gaming content.  

Retail

As with most consumer goods, retail was the original method for selling computer games. Retailing used to involve a physical store, but the widespread use of the internet has meant that e-commerce is now a major distribution method. Whether in-store or online, any customer that purchases a game through a retailer typically purchase the entire game at once (except in the case where expansion packs are available as well). 

Digital Distribution

Digital distribution is a modern take on the retailing model. The format in which the game is delivered to the customer is different – the customer downloads a digital copy of the game instead of receiving a physical medium –  but the customer still pays for the entire game in one go. Popular services for digital distribution include Valve’s Steam and Sony’s PlayStation Now. 

Subscriptions

Subscription services work differently to the previous two models, in that consumers make regular payments to the publisher in order to continue playing the game. This is popular in games where the entire world or universe is available online, such as RPGs like World of Warcraft. Customers playing these types of games typically pay for regular updates and expansions, rather than sticking with the first version of the game they bought. These regular updates are a way for publishing companies to continue providing value to customers, so that they remain subscribed for longer.

Microtransactions

The widespread use of smartphones as gaming tools has coined the term “microtransactions”. In short, customers made small and regular payments to access a game or other online service. Microtransactions are useful because they provide a way to monetize games with a small target audience, or one which is unlikely or unwilling to pay for the whole game upfront. Examples of microtransactions can be seen in games like Candy Crush, where players can buy extra lives, or in games like Call of Duty, where the publisher releases additional maps several weeks/months after the game was first released. 

However, the microtransaction format is not entirely new. iGaming platforms have offered a similar model to their customers since the invention of the industry in the mid1990s. These platforms typically allow users to play free games, but also give them the option to deposit money in their online account, which would then qualify them to play real money games. 

It’s not just online games that take advantage of this sort of business model. Online sports betting websites combine real world sports with microtransaction-esque payments, which allows fans to augment their experience of watching sports like college football and see the most quoted teams of the moment.

Advertising

Advertising within games is a way that publishers can produce content for customers, whilst not directly charging the customer to buy or play the game. This works by charging advertisers to have their products or services shown to players within the game, either with small banner ads or full screen ads in between levels. One of the first games to do this was Angry Birds, which offered a paid version for $0.99 and a free version. The former was ad free, but the latter was not. Whilst the free version was much more popular, researchers suggested that this version would actually cost the consumer more in the long run, as they would have to charge their phone more often, which would cost them more money. 

In Summary

There are many ways in which games publishers can help to monetise their computer games. Whilst the traditional methods are still very popular, other options have helped give rise to the production of new types of games, as well as reaching new demographics. Some customers may not be able to pay $50 for a game, but they would be willing to watch ads, or pay small amounts to receive extra in-game features like more lives. This has led to more creativity in the sector, particularly the advent of mobile games for smartphones and tablets.

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