Profit making opportunities are constantly rebuilt in an “arms race” with the players’ immunity. Thus, without changes it’s impossible to maintain revenue even with a growing audience. Players buy entertainment, content and in-game status from you.

Modern games use a hybrid approach to monetization – in combination, different methods constitute a full-fledged model and work better. Limitations of one method of monetization can provide strength to another.

And of course, each particular model and its perception depends on the game, the audience and the region. In one place something can be extremely unacceptable, while in another place it can be a huge success.

• Sale of product copies
• Sale of customized add-ons
• Sale of specific parts of the game
• Sale of updates or episodes
• Monthly fee
• Sale or resale of modifications
• Presale and crowdfunding
• Voluntary donations
• In-game advertising or partnership
• E-sports
• Merchandise, gift editions and hardware extensions
• Sale of intellectual property rights and trademarks
• Sale of source code and product secrets
• Intermediary services between the game world and the player

 

Sale of product copies

The classic way: when a player gets access to content and gameplay for a fee.

Admission fee can serve as a test of his ability and willingness to pay. One dollar shouldn’t scare the player away, but it will become a solid proof that he has no difficulties with payment. After all, it’s the entire dollar!

At first glance, you might think that low entry threshold directly impacts the conversion of traffic and, accordingly, the revenue from the game, but that’s not entirely true. Players want to master the game to some extent, therefore the entry threshold and the fee per game copy should be calculated depending on the level of their desire.

A licensed copy of the game can cost nothing, that is, zero. Free to play access has become very popular in the markets where players are not willing to pay right away for a variety of reasons. There are multiple reasons: they are not familiar with the games, they doubt the quality of the product, because of their “piracy habit” and so on. This model is nothing more than a zero cost of access with subsequent sale of customized add-ons.

Sale of customized add-ons

Many ideas of this method of monetization in the gaming industry were not invented by anyone, but grew out of the gray and black markets of mass multiplayer games. Except, no one has still learned to monetize scamming in online games (such as Aimbot and Wallhack), well, at least I haven’t seen such insolence yet.

Back when there was no “Free to play” model, I assisted with administration of one of those Ragnarok Online servers. Remarkably however, it was a pirate server with a small online community – only 500 users. Players constantly offered real money for undocumented services, most often for account unlocking. Once they offered a completely indecent amount (I don’t remember exactly how many, but it was more than one hundred thousand rubles) for changing the character’s features and several particular items. We refused because the server owner was in a competing clan, already losing clan wars for castles. And, of course we were afraid to spoil our reputation with careless actions.

FtP could have appeared earlier, but it wouldn’t be that effective. There main component was absent – there was no audience accustomed to and ready to pay for it. And it’s not about the lack of a payment infrastructure – PayPal was launched in 1998 – but the fact that games couldn’t memorize the progress of players that well. That’s when the in-game status appeared, that have greatly contributed to the growth of games’ social significance.

It was more like a drug addiction, this comparison is firmly entrenched and increasingly used. Players live in virtual worlds and are willing to spend not only their time, but also real money.

Server administrators have realized that here it is, easy money. The market continued to grow, monetization models evolved (now players can even buy such exotic features as changing the character’s sex or a diver’s mask), but they were all based on the very principles of offering entertainment, content and status to players, singling them out among others.

One could notice one more thing in the community: people don’t like to engage in routine and are willing to do anything to get out of those annoying routine things in games, whether it’s extortion of metal from the ore, or simply hunting for local animals. My favorite Ragnarok began selling items increasing the speed of leveling and the chance of objects’ falling. As for RuneScape, on the gray market (in community forums) you could buy all the necessary means for quick leveling. You either play more or pay for it.

Among the outstanding know-how of monetizing mass role-playing games, I would like to note such thing as crowdfunding of in-game purchases – players chip in for something, for example, to improve the settlement of a clan: a bridge over the river provides a smaller distance from the forge to the mine to everyone.

The FtP phenomenon is well described in neuroeconomics. The answer lies in understanding the players’ instincts, what are they willing to pay for and when do they want to pay.

In this case, the tactic “you can get this only now” during a certain event or action works well. Limited time discounts wouldn’t be so successful if they were not giving something unique. In Overwatch, audio and visual improvements fall out of the chests during particular thematic events – and you won’t be able to obtain them any other time.

Not only positive feelings are being used in this respect. Here lies a certain moral aspect, there is an attempt to train the user: he pays for getting rid of unpleasant emotions, rather than the game itself or the pleasure of playing it. In this case, his search for new objects for sale is as follows. It is necessary to understand which game activities seem unbearably boring (for most people and for you personally); if there are no such activities – then you need to weave them into the gameplay and save players from them for a certain amount of money. Similar tactics are used by auto scammers, with the exception of ability to control the rules. They identify bad habits of car owners with a view to further blackmailing and extortion of money. In both cases, the money is given voluntarily.

Let’s move on to shortcomings. We need to provide a reliable infrastructure, assuming that all the players will use its resources, regardless of whether they pay for it or not. Buying advantages in the game can kill the game challenge, along with the possibility of using cheats, which can make the game uninteresting and reduce the value of the player’s achievements for fair play. That’s when questions about balance and honesty of the game arise in the community. The last two drawbacks are resolved by the rejection of “Pay to Win”, of sale of the game progress and other benefits affecting the gameplay. “Caps” and “chests” with the Gabe Newell gambling element are ideal “free to play” benefits, since they don’t affect the game balance and do not absolve from various restrictions.

If the non-paying player doesn’t have an opportunity to get something (“Magic: The Gathering”) or his resources are not enough for a confident progress in the game – sooner or later he will start to hate you. Excessive importunity also leads to the loss of players. Beautiful clothes on other characters are too conspicuous. The user has to pay for them willingly.

Sale of specific parts of the game

A free copy of the game can be either explicitly or not explicitly (PayWall) limited.

Demo versions are now too rarely found. But if you have nothing to hide, demos always go only to the benefit of sales promotion.

Many people consider the demo version a relic of the past, the era of CD’s. It was a fairly effective distribution channel, for example, as a “free” bonus to computer games magazines. Today I cannot even say where to find them and where to download them. Although first game demonstrations were entrusted to gameplay clips, trailers and teasers, the demos continue to excellently attract the audience; one of the recent examples is “Nier: Automata”.

Sale of updates or episodes

It may seem that this is a less expensive method compared to one-time release, but in reality it proves to be rather difficult to implement and less stable.

You have to constantly feed the players’ interest and fill the breaks between the add-ons with some sort of non-game content: “see in the next series, don’t miss, it will get cooler… ” The acceptable break is directly proportional to the expectations of the final product. If there is nothing to fill the expectation, it is better to reduce it to the minimum.

The majority of indie studios, chasing after benefits of episodic structure (such as Blues and Bullets or frozen at the moment MISSING), release continuations of their “serials” with a periodicity of six months or more. It’s very likely that during this time the audience will forget about the game and will less willingly pay for a new episode, especially if there is no established contact with the community.

Previous add-ons can be made free of charge, but in that case you will need to think about serious motivation for those who have paid money for them (Guild Wars 2).

Monthly fee

Someone should pay for the maintenance of infrastructure (computing power, moderation of players’ actions) and the creation of new content; it is logical that this “someone” turns out to be the player, the user of the virtual universe.

The subscription fee can be a superstructure to existing games – you can sell gaming time, access to the game library or an individual server as a service. It should not necessarily be a monthly fee, it can be a package of 24 hours that you can spend at any time, or a limit up to the next defeat. If you lose a game – throw one more coin and play further.

If you combine this method with the FtP, you will get a lease of ships in “Star Citizen”.

Sale or resale of modifications

User-generated content becomes an important component of game universes. And if you allow the creative half of the community to earn money, in return you will receive a ton of original content.

One of the new tasks of the modern developers is to assist in every way possible in the development of tools for modding.

The very process of creating content can be perceived as a game. The ability to modify the game can keep users for years, because they can customize the game as they wish.

Today modding is an open cult, serving as a forge of ideas and skills for the gaming industry. Developers often notice in the mods things that they already wanted to introduce.

Now, when there is a large assortment of almost free engines, it makes no sense to protect your technologies from misuse; if you are not open enough, the most talented part of community will move to the competing projects.

Presale and crowdfunding

You can try selling beautiful pictures, videos and feed your players with promises for a long time. And if you already have something ready and playable, that’d be great.

Early access is suitable for innovators and supporters of the game series. Consequently, the unfinished game will annoy pragmatists. Higher price can help you separate those innovators and early followers from various skeptics. A hundred bucks will stop any meddler on the approaches to the bastion of true evangelists.

The greater the deficit, the higher the desire to possess something. Just think about it: the shortage of a software product whose replication costs around zero.

Voluntary donations

As we have seen above, the idea of distributing something for free is not always absurd, it is a powerful promotion tool. The user has received something and he can be grateful for this; moreover, he will be loyal to the project with a high degree of probability.

If you like the game, don’t forget to thank those who created it.

In-game advertising or partnership

Display of advertising will irritate users, but you can sell a magic disposal of advertising or elegantly weave it into the gameplay. For example, if you purchase any booster in the mobile game, you will no longer be forced to buy a new “Honda”.

E-sports

I haven’t yet met games that could profit on organization of championships or other sport events. This is rather the object of expenditure in Marketing.

Merchandise, gift editions and hardware extensions

Games have a huge cultural impact. Want to put a hero figure from your favorite game on your shelf? Want a T-shirt or a mug with a familiar logo? You can have it! The choice is huge, especially given that the cunning Chinese make a dozen clones of successful products and will distribute it via the Internet with free shipping around the world. But when there is about a hundred variations and different qualities of Tracer or Diva costumes from “Overwatch”, it’s not that fun anymore.

This method is well combined with the others: buy a figure – get something else in-game. Remember that interactive stand from “Disney Infinity”, the one that transferred plastic character models in the game? Similar items can enhance the experience of the game: clues, puzzles, USB devices. The latter ones usually include controllers and accessories: guitars, dancing rugs, etc.

Sale of intellectual property rights and trademarks

For cultural reasons from the previous paragraph, a lot of people might try to make money on your gaming universe. But the inventing process differs from sales. Who knows what is more complicated, these are very different areas. Someone will want to move away from the first one or the second.

Sale of source code and product secrets

In theory, there can be no secrets at all. If a cool idea came to somebody’s mind, then it will necessarily come to somebody else’s mind, on the other end of the world. People don’t buy ideas; they buy their implementation.

The gaming industry is so complex that if you know “what to do”, it doesn’t mean you can do it get even with the infinite resources. It’s easier to buy technological advantage than to reinvent the wheel.

Intermediary services between the game world and the player

Let’s finish the article with a very simple idea: equate the player’s progress with the real money. The idea is simple, but no one has managed to implement it so far. The brightest attempt was made by Blizzard in “Diablo 3”, to learn more read in the article “Hyperinflation in the world of video games”. The amusement arcade named “Diablo 3” was eventually closed; one of the best minds in the gaming industry failed.

The virtual property market has existed since the time of “Ultima Online”, but it is not very convenient for end-users, no one provides sufficient guarantees of transactions.

The reverse money communication multiplies the players’ motivation.

If there is not enough balance of outflow and inflow of funds, sooner or later it will lead to the economy collapse in the game. There is always the risk of depreciating game money and it’s difficult to manage it by increasing the outflow (in-game money that players spend during the game process). If everything is expensive in the game, it will finally affect the pleasure, that the players intend to get from the game.

Another danger to blur the boundaries between the virtual and real values is the “Golden Farm” – the appearance of players from the regions where the average wage is lower than the potential earnings from the game. If the farmers’ actions are not hampered, they will necessarily disrupt the economy.

I would like to take a look at successful implementation of the virtual property exchange with the real money, but for now this idea remains hypothetical. If I’ve missed something, please write this in the comments.

Thanks for reading!

© Tesoro Studio Team