The South Indian narrative adventure, ‘Palm Sugar: A Village Story’, is coming to Steam on August 12th
Press release:
Hyderabad, India | This week, publisher 1312 Interactive and developer Monotusk Studi[...]
Generating extra revenue is a savvy business technique, no matter what industry you are in. Online games are undergoing a revolution, and according to the Gamble USA website, 2023 is the year that in-app purchasing will exceed any form of advertising currently seen in gaming groups. To understand how this trend has come about, we need to step back a little and look at the evolution of gaming.
Limited revenue potential
Originally video games had fairly limited potential. Before the age of the Internet, games were supplied in disc format and, before that, in cartridge format. This was fairly limited to the purchase of the game, and after that, there was no extra money to be made for the design companies.
It also meant that over time, the latest releases became too expensive for many players. This means that sales drop, and game houses start to look for other ways to bring in income. The expansion of the Internet has certainly helped as well as the development of mobile technology that has allowed for a vast array of mobile gaming vis apps.
In-app advertising
One of the ways that game developers were able to bring the cost down so that they could sell their games for less money, or even offer them free was to use in-app advertising. This means that the gaming experience is slightly interrupted by pop-up adverts, and this can be quite frustrating for players. However, for the developers, this is a win-win situation.
Having a captive audience and knowing that your advert will be seen by thousands, even millions of players, means that there is no shortage of companies happy to part with their money in return for featuring in a game. The initial way that companies thought to make more money was to create a payroll to remove the advertising.
But again, this has limited potential because once a player has unlocked an advert-free version of the game, there is no more money to spend which is where in-app purchasing comes in.
Hook then upsell
The current trend of training seems to be in the format of hooking them in and getting players addicted to the game and then upselling to make it an even better experience. In online gaming, this comes in the form of loot boxes, gold coins, virtual currency, and various other purchases that the player can make in real time that unlocks new features. This is known as in-app purchasing and actually leads to excessive spending that a player wouldn’t normally make if they had to pay for it upfront when they purchased the game.
A limited amount of gaming action is offered for free; there is no charge, but then the player will encounter a progress wall that is possible to pass without spending any money but will take a frustratingly long length of time.
The fastest way to progress in the game is to purchase a key in the form of one of the rewards detailed above, and progress can be made instantly. It has proven to be so popular that it is now a pretty standard approach to all online app development.
The figures speak for themselves, as the in-app purchasing revenue has grown year-on-year by approximately 25% since 2017 and 2021. 2020 so a 36% year-on-year growth rate making it the record year.
In 2022 in-app purchasing was expected to generate around $205 billion, which is a rise from the initial $74 billion that was generated by in-app purchasing in 2017. Overall, advertising is still growing; it is only growing by approximately 19% and, in 2022, was $220.8 billion, which, although still ahead of in-app purchasing, experts believe has peaked and will now fall behind.
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Tags: Gamers, Gaming, Gold, Gold coins, Internet, Online games, PC games, Video games, World of Warcraft, Wow
