Micro-transactions
Background
The use of micro-transactions in free to play and paid games are the norm nowadays. The different types of micro-transactions in games can range from simple color changes, buffs, buying items, and account transfers. The concept behind micro-transactions is to let the consumer choose what they want, and it lets the developer earn extra money on the side. The problem with using micro-transaction in games is that the developers will stop making good games, and instead make games revolve around the necessity of using micro-transactions (Rybicki, 2006).
Revenue
The amount of money a free to play game earns will shock most people. According to SuperData, a marketing intelligence firm, Riot Games in 2013 earned $624 million from League of Legends (Jarvey, 2014). League of Legends is a free to play game that has micro-transaction. The appeal of generating money through micro-transactions in gaming are stronger than ever with profits reported by the likes of Riot Games. The following chart shows the top ten online free to play game revenues for 2013.
Figure 1: Top 10 Online Games, Based on Free to Play (Tassi, 2014)
Price of gaming
History
The age of playing on the video game console was thought to end in recent years, but strong need for console gaming is still in demand. The Sony Playstation 4 has sold over 20 million, while Microsoft and Nintendo have sold half that amount. Sony, Microsoft and Nintendo are projected to earn over $15
Nintendo has dominated the console market with their first handheld gaming device called Gameboy, having sold over 150 million units, and continuing to create more handheld ones. Games have also become easily accessible on smart phones, following the trend of portability. According to research conducted by the Entertainment Software Association (ESA), 43% of gamers play games on their smartphones, and 25% play on a wireless device. Video game consoles have drastically improved since the 1970s, having become lighter, faster, and more interactive. All of these improvements were made possible by the advancements in hardware.
My research shows that about four hundred billion eighty nine million four hundred thirty seven thousand eight hundred forty seven video games are created each year worldwide, with those kind of numbers any one person could play games for their whole life and not even put a dent in it, it is very overwhelming. With more and more children spending time on video games society changes a little more. Being able to play games without the internet makes it easier to play but for those that do have internet for their video games seem to spend twice the amount of time playing because they are playing with friends and talk and IM during the game.
Although, seeing as video games are increasingly popular today, not everyone met as unfortunate of a fate. Today, many could credit this to the video game development corporation known as Atari, which arose in 1972 and continuously flourished until about 1982. In 1972, Atari came out with PONG, the first electronic arcade game, and it was an enormous accomplishment that exploded into what is now called the electronic gaming revolution. As time passed, Atari managed to triumph over its competition time and time again, but that is not to say that each of the failed corporations did not feature something that is used today. In fact, a couple of the failed organizations contributed something original to what is common today. For instance, Fairchild Camera and Instrument creating the first system that could play several different games, rather than just one. Another aforementioned group, RCA, was the first to produce and utilize keypad controllers instead of paddles or joysticks. Other consoles that came along, such as Intellivision and Vectrex, sported better graphics than the Atari’s consoles and games, but they still did not manage to gross the amount of money that Atari did because Atari was still on top of collecting all of the most entertaining and enjoyable games of their time. Keep in mind what attracted the masses to video games in the past: fun and addictive gameplay, not how good they looked. Now that the principal eras of gaming have been
There are many people play video game, pc game, massively multiplayer online game and mobile game, the game industry is increasing. Because of technology, the game industry can develop more game which have high quality, and develop more generation of console.
For the industry analysis, we are certain of sales since the PS4 is a consumer product particularly. For that reason, the buyer has a high bargaining power on the product. The market for casual gamers has increased seriously and sales increased after decreasing price of the PS3. Due to the uniqueness of every video game console and the games buyers have bargaining power. A small difference might be significance an extra hundred dollars for an intense gamer. People have more aware to the price difference because they play video games more casually and as a result they have more bargaining power. Buyers have a reasonable amount of power in the video game industry in particular with Nintendo. Although Microsoft and Sony have other sources of revenues, the major source of income comes from the sales of games and game consoles.
As sales of Nintendo’s Wii and DS dominate the PlayStation 3 and Xbox 360, and PlayStation Portable, respectively, the pressure continues to mount on Sony and Microsoft to move to the next level in the ongoing console wars. Sales of the Wii in 2008
Video games are a fun hobby, but no one ever said it was an inexpensive one. For example a brand new console such as the PS4 or an Xbox One will cost you around £300-400 standalone with absolutely no games. Factoring in the price of games this will usually cost about £40-50 easily for new releases. And if that wasn’t enough PC gamers have an even harder time when it comes to building their machine as a moderate gaming rig will cost the average user around
PS4 vs. Xbox 1 Did you know that the PlayStation 4 (PS4) outsold the Xbox 1 by 2:1? That may not seem like a lot now, but the actual amount of units sold are 22.3:12.8 (Million)! That’s a big difference. The company that makes the PS4 is Sony. The PS4 is a slim console that is black and costs $400.
Every ticket for the event "League of Legends, World Championship Finals" are sold out within a hour of them being released, making a profit of up to $1.6 billion in revenue in 2016. (1) With the Los Angeles' Staple Center should out and thousands of fans eager to watch the two final teams compete for the championship world cup and a price pool of $5.07 million; (2) e-sports are still not considered a sport by mainstream sport media when it should
Future growth expectations for the Video Games industry have been significantly moderated, as the picture of the market for gaming on mobile platforms becomes clearer. Since mobile games are sold at much lower prices compared to traditional console and PC games, their rise may foretell a slowdown of the video game market in the United States. While the recent launch of the next generation video game consoles is expected to rekindle interest in the more expensive console gaming market, the rise of low-cost, low-margin mobile gaming market may weigh on the overall gaming market. Consequently, this is expected to pull revenue downward as consumers pay less per hour for gaming entertainment. Revenue is expected to reach $47.4 billion in 2019 as a result of the expanding population and an increased percentage of Americans
Sometimes it seems like the computer game industry is dying, crushed to death by its own bulk. Every year more and more gaming companies get gobbled up into huge conglomerates like Electronic Arts, companies that mostly put out trash that is technically and visually impressive, but devoid of concept and content. However, there are some small gaming companies that buck the trend. While mostly just small groups of programmers and artists, some are huge unions of fans who, irritated with the dropping quality of computer games, have decided to use the power of the internet to get together and to produce games tailor-made to their personal preferences.
So what exactly are microtransactions? Microtransactions can be defined as the exchange of real money for virtual goods. It is a system where “users can purchase virtual goods via micropayments.” hence the term microtransaction (“Microtransaction” 2017.) This type of business model is common in free to play games and is typically used to speed up progression within the game itself. However, some developers have decided to incorporate microtransactions despite customers already paying the full price for the game. While this is not necessarily an issue if the goods are cosmetic and have no effect on the core gameplay, it is an issue if it provides users who pay for offered goods with an unfair advantage over free to play players. One might
* Instead of focusing on one particular target segment (18 to 35 year-old male gamers with above average-education and high degree of comfort with new technology) further target segments should also be focused (e.g. women, children, occasional gamers and non-gamers). Some of the further customers require games which are easy to play because they have a low degree of comfort with new technologies. Furthermore some of them don’t want to invest a significant amount of their time to learn and play these games because of their busy lives.
This quest for more collaboration is a big trend in the gaming industry in general. Although multi-player games have always been a big thing and with the rise of e-sports is going to be even bigger, the contemporary trend points towards a more physical experience. With virtual and augmented reality, gaming has moved away from just sitting at your desk to a physical activity. It’s, therefore, not a huge surprise to find out that these physical games are looking to incorporate collaboration.
That would be 15% lower than 2011. Meanwhile, two of the biggest movements in games—the rise of social and mobile gaming—were pioneered not by the establishment but by outsiders like Apple, Facebook, and Zynga. (WARREN, J. (2012). Based on research, timing is critical for a new entry into the video game console industry. A console start-up must wait for current console giants: Microsoft and Sony gaming consoles to age to the point where interest drops. This drop in interest can be an “opening” a start-up needs to jump-in prior to Microsoft and Sony releasing new consoles. So, the statement of the problem would be when to enter the video game console industry.