2024-08-14 06:36:00
The economic model of video games has evolved.
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Par Edouard Pignot, Leonardo da Vinci Pole
In a previous article published in 2018 by The Conversation, as well as another from the Management Sciences ReviewDidier Calcei discusses a transformation of video game business models since the mid-2000s, from buy-to-play to free-to-play. In the first case, the game is sold as a product. It is a physical sale. In the second version, it is possible to play for free, but the game in question most of the time includes either advertisements or optional purchases, to generate revenue and possibly profit. These are therefore two different economic models, which are distinguished by what will trigger a purchase from the player-consumer.
So, the monetization of video games goes back at least to the early 2000s, when virtual economies began to emerge. This is quite naturally on massively multiplayer games (MMOs) that such phenomena began to exist, such as the famous Eve online (2003) or World of Warcraft (2004). For example, the World of Warcraft auction house allows you to find or sell weapons, armor, etc.
A take-off into virtual worlds
But perhaps the most accomplished experience comes from virtual worlds, ancestors of the metaverse, which emerged in 2003 with Second Life (SL). With the latter emerges an entire industry of independent designers who create bodies, clothes and accessories and then sell them to SL users. Thanks to SL’s interactive technology, participants can create virtual objects using the construction of blocks called prims. In addition, SL has its own monetary system: the Linden dollar, which can be bought and sold for real currency. If, at first, SL attracted up to 2,7 millions registered in January 2007, SL then started to declinewhen large companies like Dell, Cisco Systems, Xerox and Nissan invested to create their showcases in the world.
As emblematic as it may be, the case of SL is far from unique: other worlds integrate also their own virtual currency. For example, Cyworld includes a currency called “dotori.” Participants are encouraged to use this currency to purchase virtual items. As of 2008, 25% of the total population of South Korea has registered and participated in Cyworld, with approximately 20 million visits per day. On average, each user spends 2700 won per month to the various services offered by the site.
A strategic choice
Today, some platforms have chosen, through their “star” games, to benefit from revenues linked to microtransactions. While most games are paid, star products are now free, and their sources of revenue are based exclusively on microtransactions. In a article published by Harvard Business ReviewFeng Zhu and Nathan Furr talk about hybrid business models to describe the ways brands transform products into platforms.
A typical example of this strategy is Valve. Hackers had created “mods” (patches made to the original game by developers) of Valve’s flagship game, Half-Life. “Mods” allow you to modify a more or less significant part of a game to offer your own creation to the community. Rather than fight this phenomenon, Valve recognized that there was a demand for an alternative to Half-Life – and therefore a potential for value creation. So, the company hired the hackers of the most popular mod to encourage them to make a second game, called “Counter-Strike” (a first-person shooter) which would become the star game on Steam.
In Counter Strikea very specific microtransaction system is present: loot boxes. After opening a crate, the player obtains a completely random item. The loot thus obtained varies from “not rare at all” to “extremely rare”. At the same time, Steam authorizes the sale of loot on its marketplace, for real money (while taking a share of the transaction amount). On June 5, a “skin” (a graphic design that modifies the appearance of a character or an object) was sold for more than a million dollars. This “skin” (a weapon customization) can of course be obtained “for free” by opening a loot crate, but the chances are estimated at 1 in 21 million.
The key role of “skins”
Epic Games, for its part, has come to compete with Steam on its own turf, by becoming a platform for digital video game sales (Epic Games Store). The platform was born from the phenomenal success of a game developed by Epic Games: Fortnite (2017). Millions of players are logging into the game that has gone viral at the same time. While there are no loot boxes on Fortnite, the possibilities for microtransactions are certainly there.
It is, in fact, possible to buy “skins” (for a character this time) and all sorts of customization, such as pickaxes or even glidersomnipresent elements in the game. These are therefore purely cosmetic microtransactions, meaning that they do not provide any advantage in the game. In Fortnite, no microtransaction allows you to be stronger than another player. The objective is purely aesthetic. This is opposed to “pay-to-win” microtransactions, which allow you, for example, to buy a character stronger than the others in the store of a fighting game, and thus beat other players more easily.
Furthermore, Fortnite popularizes a so-called “battle pass” system. The player pays for a “pass” with the game’s virtual currency (obtained most of the time with real money). By passing levels, the player also unlocks rewards. The more he plays, the further he goes in the levels, the more items he earns. Among these are “V-Bucks” (the game’s currency), which themselves allow him to buy a “battle pass”. If the player plays enough, he will be able to reimburse the purchase of his “battle pass”, and potentially buy the next one, each battle pass has a temporary validity period. This free-to-play model, with the presence of microtransactions, is bearing fruit. Between October 2017 and May 2018, the game is said to have brought in around $1 billion.
A model that is still controversial
These microtransactions allow the developers behind these games to make a profit in the long term, while encouraging players to come back thanks to the purchases they have made and will make within the game. This model is therefore in complete opposition to the one initially studied (Buy-To-Play), which was based on the principle that players paid for their game, in one go. In the “free-to-play” model, players do not buy the game, but regularly acquire items within the game, with real money.
While microtransactions undoubtedly generate revenue, some are nevertheless controversial, such as loot boxes. Links between this system and more traditional gambling have been established. Some countries, such as the Belgium or the Netherlands implemented policies limiting their use. In fact, people had spent thousands of euros in loot crates, in order to obtain a very rare object. As a result, these crates were prohibited in the two countries mentioned above.
A research study Norwegian research also reveals the existence of social pressure and harassment among young players, linked to the purchase of objects and skins in online games. This phenomenon is problematic because young people are a vulnerable group of consumers who navigate alone in almost unregulated markets.
Other platforms, such as “PlayStation” or “XBOX”, are more geared towards subscription systems. The player pays monthly, or annually to play a catalog of games in an unlimited way. The “Game Pass” available for XBOX players obtains more than satisfactory results for Microsoft.
A future beyond gaming?
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In our researchwe looked at the rise of the Unity game engine platform. Unity provides a simple editing environment where 3D models are dropped into the editor and then placed in a sort of virtual world. Unity is the market-leading platform for creating video games, as well as training simulations, medical and architectural visualizations, and other interactive 3D content.
Unity created l’Asset storea virtual store where you can find 2D or 3D models, textures, audio tracks, sound effects, scripting tools, etc. For example, a programmer, having created a product called Moody to help designers with 2D illustrations, earned $300,000 selling this product on the Asset store. The platform also allows 3D artists to design assets (eg high-quality graphics) that will then be sold to game designers.
During a ethnography of design of a virtual world designed with Unity and intended for the training of researchers in Earth sciences, we have identified that part of the user experience consists of equipping the avatar of the geologist, before a virtual excursion of the Skiddaw mountain, in the Lake District in England. This process of selecting the kit (appropriate shoes, waterproof clothing, compass, glasses, safety helmet, etc.), is directly inspired by skins and an aesthetic of monetization, as observed in World of Warcraft or Fortnite.
Overall, monetization irrigates organizations well beyond entertainment. In the first quarter of 2024more than 77.7 million daily active users of the Roblox game, can use a cryptocurrency known as Robux outside of the game. Some authors even claim that bitcoin constitutes a gamification.
Simon Kovarski, research assistant at EMLV, participated in writing this article
Edouard PignotTeacher-researcher in organizational psychology, Leonardo da Vinci Pole
This article is republished from The Conversation sous licence Creative Commons. Lire l’article original.
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