Online gaming platforms have emerged as indispensable parts of the digital landscape, leveraging technological advances to offer an unprecedented range of experiences. From console gaming and mobile games to Massively Multiplayer Online games (MMOs), these platforms cater to diverse audiences worldwide. The backbone of these platforms’ success lies in their innovative monetisation strategies, often shaping the user experience significantly.
Understanding Online Gaming Platforms
Online gaming platforms are digital infrastructures where users interact and engage in gameplay across various genres and formats. Whether it’s an intense battle on an Xbox console, a casual game on a mobile device, or an immersive universe explored with thousands of other gamers in an MMO, these platforms have redefined entertainment and established themselves as powerful mediums of digital expression and engagement.
Monetisation Methods in Online Gaming
The business side of these platforms revolves around several revenue models, such as freemium offerings, subscriptions, in-app purchases, advertising, selling user data, partnerships, sponsorships, and merchandising.
It is important for a new online gaming platform to explore different revenue streams and have as many income streams as possible to maximise revenue and profit.
Freemium Model
The freemium model, a portmanteau of ‘free’ and ‘premium’, involves offering basic game features for free while advanced functionalities or virtual goods are available for purchase. Games like ‘Fortnite’ and ‘Candy Crush Saga’ have successfully exploited this model, luring in players with free access and monetising through premium features or enhancements.
There are several examples of the freemium model working – to a high standard – for many online gaming platforms. For example, Epic Games’ Fortnite is arguably one of the most successful freemium games. The basic Battle Royale mode is free to play, but players can purchase a seasonal Battle Pass or cosmetic items using the game’s virtual currency, V-Bucks, creating a robust revenue stream and massive earning potential.
Candy Crush Saga is another success story of the freemium model, this time on mobile devices. The mobile game is free to play, but offers optional in-app purchases for extra moves or lives. Despite its simplicity, it’s a top-grossing game on both iOS and Android platforms and is incredibly addicting.
Subscription Model
Online gaming platforms often employ a subscription model where users pay a recurring fee for access to a library of games. For example, Microsoft’s Xbox Game Pass or Sony’s PlayStation Now offers a vast range of games for a monthly or yearly subscription, providing excellent value for gamers and predictable revenue for the platform. The service is considered a “Netflix for video games” and has seen significant success since its launch.
In-App Purchases
In-app purchases present another revenue stream, allowing players to buy special abilities, virtual goods, new levels, or other enhancements to the gaming experience. This practice, including microtransactions for minor enhancements, has become widespread, driving substantial revenue in games like ‘Clash of Clans’ or ‘Pokémon Go’.
Supercell’s popular mobile strategy game, Clash of Clans is free to download and play, but players can speed up their progress by purchasing in-game currency (gems) with real money.
The hugely popular augmented reality game, Pokémon Go offers in-app purchases of in-game items, such as Poké Balls, Incubators, or Lure Modules, which enhance gameplay and contribute significantly to their revenue.
Advertising
In-game advertising also plays a significant role in monetisation. This can take the form of display ads, video ads, or even native advertising, where sponsored products or locations become part of the gaming environment. Crossy Road, the popular mobile game has leveraged in-game advertising to generate revenue, integrating display and video ads without detracting from the overall gameplay experience.
Partnerships and Sponsorships
Partnerships and sponsorships offer additional avenues for revenue. Cross-promotions, sponsored content, and influencer marketing are common strategies, while esports tournaments and live-streaming platforms often generate substantial sponsorship revenues.
Riot Games’ League of Legends, one of the biggest games in the competitive esports scene, has formed partnerships with various brands and hosts sponsored tournaments, providing a significant revenue source. Betting companies are catching on to the ever-growing esports market and now offer platforms to bet on your favourite esports events online.
Merchandising
Merchandising, particularly for games with popular characters or franchises, also serves as a significant revenue source. Popular games like ‘Minecraft’ and ‘Overwatch’ often have merchandise ranges spanning from clothing to toys.
Additionally, casinos have always taken advantage of the merchandising market. Brick and mortar casinos often have gift shops on-site to buy merchandise, while conversely, the newest casinos in India for 2023 utilising online shops to promote things like poker chips, t-shirts and other merchandise branded in the casinos colours/trademarks.
Impact of Monetisation on User Experience
While these monetisation methods contribute to the platforms’ profitability, they also significantly impact user experience. Balancing the need to monetise with maintaining user satisfaction is a delicate dance. Excessive in-app purchases or ads can lead to user dissatisfaction, and privacy concerns can arise from selling user data.
Future Trends
Emerging trends in online gaming monetisation include blockchain and cryptocurrency integration and non-fungible tokens (NFTs). These technologies could provide new means for players to own virtual goods and could potentially reshape the industry’s monetisation landscape.
Summary
In conclusion, online gaming platforms are multifaceted entities that leverage a variety of revenue models. As the industry evolves, the delicate balance between monetisation and user experience will continue to be a fundamental challenge. However, with the advent of new technologies, innovative monetisation methods are on the horizon, promising exciting times for both the industry and gamers alike.