Video games business model

The fan base surrounding the game is very large and participative and Riot Games is a company very open to dialog, employees frequently answer questions and participate in discussions in their own forums and in online communities such as Reddit. Unlike the EA case, this company has a lot of support from their fans and most are very happy with the business model, often viewing the premium content as a good purchase, giving them bragging rights over other players.

Overall, League of Legends is a great example on how to properly implement this business model and shows how much a free to play game can achieve if monetised and balanced properly around the premium content.

– Successes: Microtransactions independent of gameplay, large and loyal player base Failures: Low ARPU, Lack of ways to obtain premium content through gameplay

4.4.

Video games business model

How Zynga went from social gaming powerhouse to has-been.

Retrieved from arstechnica: http://arstechnica.com/business/2013/09/how-zynga-went-from- social-gaming-powerhouse-to-has-been/1/

Fields, B. C. (2012). Social Game Design – Monetization Methods and Mechanics. Waltham: Elsevier.

Gardner, J. (2009, September 28).
Futurology: FarmVille on Facebook. Retrieved from London Evening Standard: http://www.standard.co.uk/lifestyle/futurology-farmville-on-facebook-6792888.html

Garland, J. (2014, February 28). Free-to-play or fee-to-pay? The best and worst F2P games. Retrieved

from Techradar: http://www.techradar.com/news/gaming/free-to-play-or-fee-to-pay-the-best- and-worst-f2p-games-1229721

GiantBomb.
(2015, February 02). Microtransactions. Retrieved from GiantBomb: http://www.giantbomb.com/microtransaction/3015-199/

Greene, N. (2013, March 6).

Computer games business plan

Players who get frustrated with the game’s pay walls are more likely to migrate to different games (and with the great variety of games it’s not hard to find a different game that offers the players a similar experience), which means the game will lose its only source of income͘ Treating players as an infinite resource was Farmville’s biggest mistake and it caused the game to fail after there were no more players picking up the title, so customer satisfaction is definitely a big factor when it comes to ensuring the success of microtransactions.

The previously discussed EA case, together with other AAA game publishers, can work in a different way, as these companies charge players upfront for the content; they feel like they can take risks with the multiplayer modes, adding microtransactions to allow players to progress faster.

Video games business plan

Retrieved from Consumerist: http://consumerist.com/2013/03/06/ea-backtracks-a-bit-on-the- whole-microtransactions-in-every-game-thing/

Olsson, L. S. (2010, June). Business Models for Video Games. Retrieved from Lund University: http://lup.lub.lu.se/record/1672034/file/1672035.doc

Peerce-Landers, P. (2014, August 2). Valuation: Why Zynga’s Stock Is Worth Less Than $2. Retrieved

from Seeking Alpha: http://seekingalpha.com/article/2373295-valuation-why-zyngas-stock-is- worth-less-than-2?page=2

Perry, D.
(2009). 29 Business Models for Games. Retrieved from WordPress:

29 business models for games

Piner, D. (2014, May 22). Top 10 Reasons Why Hearthstone is Successful. Retrieved from

TenTonHammer: http://www.tentonhammer.com/editorial/hearthstone-heroes-warcraft/top- 10-reasons-why-hearthstone-successful

Podbyte.

Video games business plan examples

The answers are measured in a 5 point scale, from “Hate it” to “Love it”, in order to establish if there is a difference in the popularity of the model with players depending on the way it is implemented.

The fourth question focuses on the amount of money players have spent in the game, this is the main focus of the study and this question will then be matched against the other data in order to understand what kind of content or time dedication makes a player spend more money in free video games.

The fifth and sixth points are about the content that players enjoy buying and the kind of content they despise.

Video games industry business models

The propagation of Hearthstone to mobile devices has furthered this idea, as most mobile games are seen as casual games. Hearthstone is a newer game – Hearthstone has only been around for 2 years while League of Legends has been around for 5, which means LOL had more time to build an audience and monetise on it. However while observing the responses for under 2 years in League of Legends the percentage of “free to play” respondents is still only around 10% In Hearthstone all content is available to buy with in game currency – the players can simply choose to take their time and obtain all the items by playing the game for longer, while in LOL some items can only be bought with real money͘ This makes “free to play” players stick around and attempt to collect all the cards without spending any money.

Blizzard building “more experimental” titles with Hearthstone. Retrieved from GameIndustry: http://www.gamesindustry.biz/articles/2013-03-25-blizzard-building-more- experimental-titles-with-hearthstone

Winkie, L. (2014, October 22). The 5 Worst Microtransactions in Videogame History. Retrieved from Paste Magazine: http://www.pastemagazine.com/blogs/lists/2014/10/the-5-worst- microtransactions-in-videogame-history.html

Wolf, M.

J. (2001). The Medium of Video Games. The University of Texas Press.

Wolf, M. J. (2008). The Video Game Explosion: a history from Pong to Playstation and beyond. ABC-CLIO.

Zichermann, G. (2012, March 23). Zynganomics: 4 Secrets of the Social Gaming Business Model.

Video games business model canvas

Reddit” and in Facebook groups of players of League of Legends and Hearthstone.

The data will be compiled and analysed in this chapter in order to facilitate further discussion and conclusions to the questions proposed in this study; the raw data and tables used to create these graphs will be available in the appendixes section of the dissertation.

League of Legends was released six years ago and as expected, most of the replies come from players who have been playing the game for a long amount of time, as newer players are not as invested in the online communities.

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How long have you played the game? (LoL) Survey data

Hearthstone was released one year and three months ago (rounded to a year and five months in the options) and had an open beta stage where everyone who wanted could register and play.

Video games business models

Thus, it’s important to have a team that would communicate with the gamers, collect feedback, notify them about updates, etc.

The life cycle of the game subscription services

The GaaS development cycle

The development cycle of Games-as-a-Service consists of the following steps:

  1. The initial release of the game
  2. Analysis of the user behavior and monetization
  3. Changes to the gameplay mechanics as the reaction of the users’ feedback
  4. Tweak of the in-game offers (e.g. A/B tests of the game assets)
  5. Creation of the new content
  6. Localization & QA of the updated content
  7. Publishing of the game updates

This cycle leads to a spinning wheel of updates, which moves faster and faster, especially for the developers on a weekly release schedule.

Video games business model-

It focuses on providing the player with a game featuring ongoing support and constant development. New content and upgrades, both free and paid, are released many months after the initial premiere. This strategy helps maintain a player base and constantly attract new customers.
Consequently, one game can provide its developer and publisher with revenue for a long time, so they don’t have to hurry with new projects created from scratch. Besides DLCs, seasons and other time-limited events are an effective way to keep players engaged. Each season includes unique challenges and rewards; hence you must remain involved not to miss any of them. An undeniable advantage of the games as a service model is that one game can be played for a very long time – years even – constantly getting new content.
The use of this monetisation method makes it very simple for a paying user to know exactly how much they are getting for their money and free users can still get all the content without having to invest money.

Hearthstone NAXXRAMAS solo adventure pricing, own screenshot.

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A TCG where no real cards are involved was a surprise success – no one expected a game like this to soar in popularity so fast (Williams, 2013) – the game was officially released in March 2014 and by January 2015 the player base exceeded 25 million players (Hern, 2015) and Blizzard’s revenue for the game in 2014 was around $30M (Halliday, 2014).

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