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Game Revenue: Lessons Learned, Principles Revealed

May 2, 2015

monetize_challenges1My last post of last year was on the topic of the need for a new game development model. One thing I didn’t elaborate on in that article was revenue stream. With the fiasco that was the launch of Evolve, the promise of “freedom-to-play” games coming to Xbox One, and the recent slap-in-the-face $40 Season’s Pass for B:AK, I have found myself thinking about the various ways in which devs/pubs could make their money. I am still very open to the traditional one-time $60 fee for a game. However, there are other approaches that could be taken especially for those developers adopting the new dev model.

First, the only revenue model I won’t support is pay-to-win. If there is even a whiff of that, I won’t touch the game. Otherwise, I recognize the developer’s right to monetize their game however they want.  There are, however, lessons learned and principles revealed that can be useful in guiding the creation of a lucrative revenue stream.

Why choose Freedom-to-Play?

  1. Because you want the game to be played by as many people as possible, with the hope that many will love it and decide they want to adopt it as a staple in their gaming diet.
  2. In the long run, the total revenue will actually be more than if you had charged a one-time price for the game.

What are the principles for determining a successful revenue model?

  1. Make the customer feel 1) respected, 2) like they are getting a bargain, and 3) empowered, that they can treat generosity with generosity. The customer must be made to feel like they are not “being played”. If possible, make the customer feel like they are getting an excellent deal, and that they want to do the good deed of supporting a generous dev/pub. Customer perception is paramount.
  2. On day one, give the gamer as much content as possible at zero-cost forever. Provide a full description of the revenue model to be used in the future, but offer none, or almost none of the “premium” items until weeks after launch, even if they are ready from day one. This will prevent any reviewers from being distracted by the individual and aggregate cost of the items, even if they are only cosmetic. The launch of the game is crucial!  If items must be offered on day one, offer them at very cheap prices.
  3. For at least a year, aggregate cost of game-critical content (maps/characters) should not exceed the current standard cost of a “full priced” (i.e., $60) EA or Ubisoft or Activision game. On the other hand, within a month or so of the game’s release, there can be an infinite amount of cosmetic items available for whatever sweet spot pricing the gamers will support.

These three at least, are essential for success. There are other additional methods for monetizing, however, methods that so few dev/pub actually tap.

  • Meet the need for dress up and doll house, as my friend calls them. These are two basic psychological phenomenon that affect almost all humans. Get creative. Provide a pre- and post-game customizable lobby in which gamers appear as their customized character. Offer items for decorating the lobby and accessorizing the characters (including animations), even if some of those accessories cannot be taken into the game arena. Offer products that meet the need for dressing up and homemaking, and be greeted with gratitude and dollars rather than rage and complaint.
  • Merch. Sell t-shirts, cups, figures, custom figures, pencils, Pinnys, anything that people can wear, use, or decorate with in real life.

EDIT:  On the topic of revenue streams, Microsoft has chosen to give their next OS away for free to all who adopt in the first year.  The problems/challenges with Windows 8 made this necessary.  However, in the end, it will do far more than just recover the damage done from 8, it may very well be this era’s MS DOS recapturing and captivating a comprehensive portion of the user market.  Then, when they move to Window 11, people will be ready to buck up.

  1. May 2, 2015 8:14 pm

    OT, but also related to revenue decisions,

    Star Wars Rebels is fantastic. It recaptures fully the spirit of the first two Star Wars movies from the original trilogy. My friend had been pestering me to watch it for months, and it was the last thing I wanted to do with my spare time, but once I started, I realized that it is every bit as fun, for all the same reasons, as “Episode 4 and 5” I highly recommend it.

  2. May 3, 2015 12:23 pm

    I don’t agree with this. Freedom to play becomes a mess once the entire game is engineered to make you buy stuff as it is in mobile games right now. I much rather spend a initial ticket price and have a game not centered on revenue.

    The main thing here is not the revenue system but the lying and hype of certain developers to get those initial sales.

    Some don’t even fully disclose what’s available in a season pass, we basically buy blindfolded, even worst without knowing if the core game works.

    but most of that is on us for buying into it. There will be a time in the cycle when all of this will be cheaper. We just have to wait and not buy in to the next big thing model.

    • May 3, 2015 4:49 pm

      Frenik, I’m not advocating for one model, but rather trying to compile the list of principles, opportunities, and pitfalls that should guide any revenue model. I just chose Freedom to Play as the focus, because it is the most open, and there are several games coming out for the One.

      And more OT

      I’ve Seen Things You People Wouldn’t Believe

      And this really deserves its own post, but I will settle for just linking it here. WOW!

    • Herandar permalink
      May 4, 2015 9:00 am

      OTOT: The welder in the video has the same hat that I wear every time I leave the house..

  3. August 2, 2015 5:27 am

    Cracked has an excellent article citing 6 games that offered early access, that ripped off the customers. Surprisingly, Double Fine takes top honors with Spacebase DF9. Scandalous!

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