Business Models For games

Retail

The Retail business model is when boxed games are sold at shops, or online. One of the main reasons people buy physical copies of games now is so they can get a full copy of the game on it's release date, and it means extremely large games don't take a lot of space on the computer or console. Many think the future of this form of sale is pre-paid cards for download, since they believe consoles will soon be exclusively online. This would mean used games would no longer be sold.

Digital Distribution

Digital download is is when games are downloaded directly onto the customers console or computer. Examples of this are the Nintendo e-shop or the Playstation store. Also unlocking access to a game is also classed as digital distribution.

In-Game Advertising

Basically product placement in games, like billboards or on other assets in games. Even advertising built into the story

Around-Game Advertising

Around Game advertising is making money from adds surrounding the screen while the player plays the game. This is normally on flash games or free phone games.

Advert games

This is when the entire game is an advert. an example of this is the online McDonalds game.

Try before you buy

This is otherwise known as shareware. An example of this is Doom on the pc, the first episode is free, but to play the rest of the game you must pay. For the developers this is a risk, because you could include too much content for the player, so they won't want to pay for the rest of the game. People like to use cliffhangers in the game, to make people want to see more.

Episodic Entertainment

This is when you can buy parts of the game as they are made available, or you can pay to unlock it all for a period of time. Expansion packs are a form of this.

Skill-Based Progressive Jackpots

This is when players buy a ticket to enter a game tournament. This generates a jackpot which gets higher the more people buy tickets. The player who wins the game gets the Jackpot, and the company keeps a percentage of the jackpot. For this to work the game must be based on skill. 

Velvet Rope or Member's Club

This is where the user pays for VIP access, meaning they get special Privileges and access to the game, for example areas that would not usually be accessible, or items that would not normally be able to be used. The more you get for the access, the more people will want it.

Subscription Model

This is when the player pays monthly for the game they play, which is usually online games, like World of Warcraft. Sometimes this can come with a retail purchase, to get a disk or a code for the install files and instructions for the game. Most the time players set up the credit card payments and don't stop them. If you stop playing your hard earned characters and equipment will be lost, which makes even people that don't play the game anymore continue to pay for it. This is not good for players, but very good for the people who make the game.

Micro-Transactions

This is when players pay for vanity, to save time, for better communication or to level up faster etc. This is normally used in phone games like The Simpsons Tapped out. Most the time players pay for in game credits which can then be used to pay for anything they wish within the game. Sometimes you can get the credits by inviting friends to play the game.

Sponsored Games

This is otherwise known as Donationware. These games are giving money to charity, while you play.

Pay as you go

This is when you pay for the time you spend playing the game, like arcade machines or pinball machines. You could be paying for 3 lives in Pacman, 5 balls in pinball etc. This is also used in internet cafes. This could also be used for some online games too. 

Player to player trading of Virtual Items

This is when you trade land, property, characters or items to other players in auctions. You keep a percentage of the money. Some games let the player get the real money, so some players do this as a full time job, but this can lead to major fraud.

Sell Access to your players

This is when you sell access to players, like dlc's in games. This can be a good way to make the players pay for more of the game, because they want to play more of it

Freeware

This is giving a game for free. It can get alot of customers, and although it doesn't make any money itself, you can make money from the players buying other games from you that aren't free. 

Loss Leader

This is when a game is sold extremely cheaply. There is clearly too much value for what the customer has paid for, but you can use the following for the cheap game to sell toys and movies. And that's where the money is.

Peripheral Enticement

This is when the game can't function without a specific piece of equipment, for example Wii fit. This is a good way to make money on the hardware. 

Player to player wagering

This is when people bet money on who will win a game, and the winner keeps all the money. The game must be a skill based game. Another technique of this is gambling virtual items. Either way, the people who made the game get a percentage of the money.

Rental

Renting games isn't used much today, but a few years ago it was a good way of playing a game without paying full price for it. Shops like Blockbuster would rent out games for a certain amount of time to people, and the game would make much more money than just selling it, as many people would rent it.

Created By
Liam Sage
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