Monetization of Games Will Be the Future?

Is the monetization of games the future? It’s very difficult to argue with the idea that it isn’t.

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Research has revealed many interesting findings about players from developed countries. For example, Newzoo's Global Gamer Study in 2023 found that 87% of players spend money on in-game items.

For mobile games, it’s clear that in-game and in-app purchases (microtransactions) have been a rewarding revenue stream for developers in the US. Findings have revealed 17% of mobile gamers spent more than $100 on in-app purchases in the past year, and 20% spent between $30 and $99. Half of US mobile gamers spend between $1 and $50 per year on mobile games. In 2019, gamers in the United States spent an average of $98 per year on in-game currency.

Why Have Developers Opted to Go with Monetization Strategies for Their Games?

Developers have found that they can increase their revenues by offering additional purchases within their games. Admittedly, monetization of games isn’t a new phenomenon that the industry has experienced, with some niches having already used these techniques to encourage players to spend longer on them.

The iGaming industry provides pay-to-play games. Players who wish to play real money slots have to make a deposit before they can spin the reels. It’s the same for those who wish to play traditional tabletop games. Money needs to be deposited into their accounts before games can be played due to the wagering aspect that is involved.

Other game markets have noticed this and have been able to implement their own strategies to ensure the revenue keeps flowing. Video and mobile games have arguably been the two notable sectors, perhaps as they have internet connectivity, thus allowing players to connect and make in-app or in-game purchases conveniently.

How Are Gaming Companies Driving These Additional Revenues?

Several strategies have become available, which include the following:

Multiple monetization models have been used and created by developers to try and encourage additional spending as a means to boost player numbers and the potential revenues that can be obtained. No longer are developers offering a one-off cost for a title that has been developed. While video games can often come with a purchase price, that used to be all there was in order to get the full game experience. Now, it’s possible to add further experiences to the overall gameplay by making a purchase once inside the game, thus allowing players to get more from the title or to prolong gaming sessions further with new updates or features.

The mobile game market has perhaps seen the biggest shift in how games are being offered and how monetization models are becoming more prevalent. Games are being made free to play through free downloads. Companies are then offering players the chance to upgrade their experiences by making additional features available to buy within the game, thus allowing them to bring in revenue in a new way. Gamers can get an introductory experience to a title without having to commit, and then they can decide if they want to get more by making a transaction.

At the same time, mobile game developers have found ways in which they can generate revenue without having to rely on player purchases. They can still make games free to download and play, but they have been able to gain sponsorship and sell ad space to other companies. This can bring in additional revenue, although it can be a technique that needs to be managed with balance. Not many gamers want to be inundated with ads all the time, as they can become annoying very quickly. However, game studios may make it possible for these to disappear by allowing a player to purchase a ‘non-ad version’, thus bringing in revenue.

Challenges of Monetizing Gaming Experiences

As highlighted, there can be challenges regarding the practice of monetizing games.

Game design can become compromised. Some companies have been criticized for making it difficult for players to complete certain content without paying for in-game items. Games become too boring, don’t offer enough, or too quick to finish for those who don’t wish to spend. This can have an impact on other releases by the developer, as people may associate one title with another, especially if they see that in-app purchases are available.

At the same time, they may feel they will have to pay to get a positive experience before downloading a title, which can impact initial revenue figures, especially if the game comes with a purchase cost. Players may be put off from spending money when they need to do so later on, questioning the initial value they may receive.

Challenges may even involve the economic environment. Players may not have disposable income available to them to spend on gaming, which can create a problem for gaming companies. If they continue to try and monetize the titles they create, players may opt against playing them because they know they aren’t in a position to pay anything additional for them.