On The Monetization Of Games

Steve Anderson : End Game
Steve Anderson
The Video Store Guy
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On The Monetization Of Games

So last night we were taking a look at the idea of triple-A gaming, and how it wasn't exactly doomed so much as it was in desperate need of an overhaul, and there was one point in there that I wanted to come back to especially tonight. Specifically, about the issue of monetizing games and keeping profitable. There are several good possibilities here, that I figure companies would do well to consider.

1. The horror movie model

I'm not suggesting more horror gaming; well, maybe I am, but not specifically to make money. What I'm suggesting is that the game makers take advantage of the big game markets offered by places like Xbox Live Arcade and iTunes. Consider the sheer number of games created by one or two people in their spare time then posted to iTunes or sold to places like Kongregate or the like. Now consider the volume of games that could be produced if, say, Capcom, did some "lite" versions of their games. Simple, quick shots of game, developed by maybe a couple developers specifically tasked with mobile or small-step games in volume.

2. Product Placement

This one is my personal favorite. When it comes to development, it can be the least intrusive, and yet offers great potential for monetization. Consider if you will, instead of packing some ersatz assault rifle, why not contract with Colt to carry an authentically-skinned AR-15? Why not drive authentic Fords in a racing game? Why not get your health refills from cans of Pepsi, boxes of Maruchan ramen, or even a full-on Supreme pizza from Pizza Hut? There's nothing that prevents names from getting in games, and nothing that prevents those names from paying the game makers. Extra revenue means extra development, and of course, the profit necessary to stay in play.

3. Digital distribution

This isn't a panacea, of course. There are still a lot of places for which digital distribution is impossible, be it because of poor Internet access or none at all. But with the gaps narrowing, and in some cases service improving, digital distribution can at least be part of the picture, if not the whole thing. Using digital distribution has the potential to be a big money-saving measure for game delivery; if they only need to print up half the copies they needed to originally yet sell the same number, possibly at a reduced rate, it translates into more overall profit. There are three ways to make profit: reduce expenses, increase sales, or both. This one falls clearly under the "reduce expenses" category.

While these aren't universal cure-alls, putting these principles at least somewhat into practice will go a long way toward fixing the main issue, the lack of profitability in gaming. Taking advantage of new revenue streams and working to save money is the golden combination that will keep triple-A gaming alive and well and putting out the quality titles we all want to see on shelves for years to come.
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