People in the game industry often debate and argue over which new business model(s) will be the most successful one. A tricky question with, according to me, not a one single answer. Here’s a short overview of the different models, some bigger than others:

  • Free to play - Games that are free, you don’t pay anything. This models is often supported by the ad-model, or microtransactions to generate revenue.
  • Ad supported (Website ads and in-game ads) – Tied to the model mentioned above. Ether the ads are placed within the game, loading screens or around the game on the site the game is hosted.
  • Subscriptions – You subscribe to play the game. This model come in different types. Ether you can pay a monthly set price to get access and play many games (portals), or for just one game (MMO).
  • Classical – You pay for the whole game, one time cost.
  • Episodes – The game is developed and released in smaller bits. You pay less for each episode, but the total sum usually sums up to a full game.
  • Microtransactions/Micropayment – Biggest market for those games today is Asia were its standard for MMO games. You don’t have to pay to access and play the game, but you can “buy” items for your character. Cosmetic or upgrades items.
  • Rental – You pay a small fee to rent the game for a couple of days or 2 weeks and then you have to return the game. And old classic model from the movie industry.
  • Digital Distribution - Not so much of a new model, more a “new” way to sell and distribute games. You pay for the game and them you download it to your computer or console and it skip the whole physical disc, box and manual. This is also include a way for publishers and developers to easy release add ons.

When the movie and music industry have felt a decline in revenue, videogames experiences the opposite. The markets changing and companies need to follow, move or die. And if differs depending on geographical location, divided into west (US & Europe) and east (Asia). In today’s hectic west market many publishers and developers are looking to adapt to or mix these different models in hope of creating a steady business or an additional revenue stream. They view the success of microtransactions and free-to-play market, the dominate model in Asia and try to convert the west market. Despite a doubtful belief in the Free-to-play reputation concerning the quality of the games, many people and companies av strong faith in the model. Some see the problem to really monetize from free-to-play games, while some believe it to be the future, from a costrumer standpoint.

While many expert talk view the future for digital content lying in the Free-model, others might not be so optimistic. The Free-to-play model is often mix with other models to secure a steady revenue stream from somewhere. Someones have to pay! Usually its the Ad supported or micropayment, not to everyone’s liking, when some people worry about the affect this will have on the whole creativity process. But some argue that in-game advertising actually can help the developing process and strengthen the brand or product, and not to compare this to how advertisers have work with the television media.

And when developers worry about the creative process of developing games, publishers and retailers more often focus on the revenue, money aspect. Publishers have much power to decide with project to invest in, and therefore chose to try out different business model mixes and find out if it works. A clear example of this is the increasing focus on developing MMO, after the huge success of World of Warcraft, with its subscription based model. You buy the game, and in order to play you pay a monthly fee. This have brought Blizzard a ton of cash! Every businesses dream, a very steady income every month. But in order to keep paying costumer they have to spend some on costumer services and regular updates. This model how ever demands a game that is so good it will keep people playing for many many months/years. Subscription only work on everlasting games like MMO. For regular singleplayer focus games free to play or subscription becomes a bit more trickier.

For games with a average playtime of 10 to 20 hours, the best model often is the regular pay, own and play. As the game industry expand and find new audience and demographics, all the new business models find their places and fans. There isn’t one final model, rather everyone complement each other. And sometimes the best alternative is a mix between different business models. Always depending on the kind of game. Don’t just stir blind on one option, but find the right model for your business and the kind of game you wanna make to reach the right audience. Its always about the game you make, the creative process. And yes, you could try to fit a game into a special b-model, thou that’s risky business to try to force a creative product to adapt according to a certain way. And I thing we should focus on making great product, and maybe not invent the wheel all over again with every game, rather refine how we develop and distribute games to fit better into today’s digital climate.

And maybe not just focus on one model, but find ways to mix them in new interesting ways. One example I have thought about is a game like Call of Duty 4 Modern Warfare, were the biggest part of the game basically is the online mode. People spend much of their play time online with this game. What if the developers (Infinity Ward) and publishers (Activision) released the game for free. You could download it and play the singleplayer campaign (which is very short) for free, but you had to pay a small amount for every month you spend playing the game online? Okay, this presuppose people want the game to play online, and that people like the game online to be ready to pay for the online mode.

I think the current divided market is great. It forces developers to thing in new creative ways to develop games and how to monetize on those ideas. The rise of new business model that complement each other, and adapt to how the market evolve. This debate is far from over, which model is the “best” one, but my mind is set. There can be one definite model, it just always comes down to what kind of game you want to create and who’s your target audience! Let the game decide, don’t develop the game concept and idea after a stated business model.

Game Business Model

Game Business Model