Video Games
Apr 17th, 2020The global gaming industry is set to become a 300-billion-dollar industry by 2030 and is said to surpass an active user base of 3.8 billion. The boom in the gaming market started with the COVID-19 pandemic.
When every other industry saw a shrink, the gaming market increased tremendously and continues to do so. With digitalization everywhere and the introduction of newer and more advanced technologies, people can perform activities in games that can only be imagined.
Earlier video game makers earned revenue by selling games. But now they have multiple other ways of generating revenue, contributing to profitable video games. Combined with powerful marketing strategies and advanced technologies, the gaming industry is set to become one of the most highly successful businesses in the entertainment sector.
First, let us see some of the revenue models that were predominantly used by successful video games to generate high profits.
First and foremost, we are going to look into the freemium model. Using this model, video games allow players to download games and play them at no cost. You can see this type of revenue model being used in the newly released games.
Particularly, the freemium model is used in mobile game apps — encouraging even non-gamers to download the games and play them for free.
You might be thinking, if people can play the games for free, then how does a gaming company see profit?
Instead of asking people to pay for the game itself, they ask people to pay to unlock premium content, make in-game purchases for powerups and customizations, avoid ads, etc.
But here is the thing:
If you want people to pay for your content later in the game, it needs to be worth their time and money. Otherwise, people may not be interested in playing the game.
When playing a game, you might have seen ads at the top or bottom of the game or you might have watched video ads to unlock powerups, gain extra lives, etc.
Usually, video ads last for 15 to 30s. Though you may find them a bit annoying, they are proven to be one of the best video gaming revenue models.
In-game ads are one of the most popular means of advertising for businesses. They have proven to bring in more traffic to the business. Because of that, more and more businesses are investing in in-game advertising to increase their profits.
In video games, you might find two types of ads: Static ads and Dynamic ads. Both of these methods are used interchangeably in video games.
If you are using Netflix and Amazon Prime, you might know how successful the subscription model is. Not only for streaming videos, this model is also very popular in video games.
Usually, you can subscribe for a single game or opt for an umbrella subscription where you can play a number of games by subscribing for a time period. This subscription can be weekly, monthly, or yearly.
People go for subscriptions for two main reasons:
one is to access games, and the other is to access content. Apart from that, players also use subscription models to avoid seeing ads within their game.
The subscription model seems to have been successful on PC and console platforms. Games like Mario Kart, Forta Horizon, and Need for Speed have been said to generate more revenue using this method.
Xbox’s Game Pass, Google Play Pass, and EA Play are some of the most popular and value offering subscription services. The subscription fee varies from one country to another depending on the local market economy and various other factors.
Branding and sponsorships are two of the most profitable revenue strategies among popular video games and luxury brands. When every industry was seeing a downfall during the pandemic, the video game market soared. Without surprise, luxury brands seized the opportunity to market their brands via video games.
From featuring their latest vehicles in games to making their own games, branding and sponsorships have come a long way. Luxury brands often use this strategy to stay relevant to the younger generation.
In recent times, people have been showing more interest in sponsoring eSports. Many popular car brands, like BMW and Audi, have partnered with some of the popular esports teams, featuring their brand logo on jerseys, vehicles, etc.
Regardless of all this, Gucci went a step ahead to set up Gucci Town in Roblox, where you can see a central garden space that connects to a mini-game, a cafe, and a virtual store.
Next, let us see the tech stacks in the video games industry.
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Augmented reality and virtual reality games are elevating the gaming experience by changing the way you play games. They are blending the real world with virtual space, allowing you to live in the fantasy-packed game world and perform activities that are otherwise impossible in real life.
With AR/ VR headsets and haptic devices like gloves and body suites, you can get a more immersive and real gaming experience. By combining state of the art technologies such as high-fidelity graphics, haptic feedback, AI and ML, motion tracking, eye tracking, and spatial audio, these technologies are redefining the VR gaming landscape.
A survey conducted among US gamers suggests that price is not the first factor that gamers look for when they buy games and gaming equipment. Instead, quality is the first thing they look for in AR/VR experiences. With quality as an important factor, these technologies are creating realistic games for players to explore, play, and enjoy.
Cloud games made it possible for you to transport your games along with you and enjoy playing games anywhere at any time, without the burden of being pinned down to heavy gadgets.
Game veterans believe that cloud gaming is going to transform the future of video games. This is especially beneficial for mobile games, including both Android and iOS, as they have limited storage capacity. You can play AAA games anywhere on your mobile device without having to install them on your phone. All you need is a reliable internet connection.
Even though they have certain limitations at the moment, we can be sure that the fast-paced growth in technology will find a solution to the challenges in the near future.
The introduction of 5G connectivity helps offer a faster video gaming experience for gamers. With 5G, video games will be made more accessible for players.
Particularly, they help make the mobile gaming experience easier by reducing latency. You can even play hardcore AAA games without any interruption or lag due to network connectivity.
Moreover, 5G combined with cloud gaming offers uninterrupted gaming services for players, enhancing their overall gaming experience.
We could say AI is one of the truly remarkable inventions of recent times. Many game developers take advantage of this technology to build innovative games.
AI has numerous purposes in game development. It reduces the workload for game developers and designers by creating realistic and detailed graphics, enhanced storylines, and better sound and visual effects. Apart from this, video game makers also use AI for other purposes like testing, coding, etc.
Along with machine learning, AI helps to analyze the player’s behavior in the game. It studies the likeness of the players and makes sure to update relevant content and make necessary changes, ensuring the game is interesting to the players. This helps to retain the players in the game for a longer time.
Unlike the early days, video gamers are not only looking for entertainment. They are also interested in monetizing while playing games. This is where blockchain comes into play.
Blockchain currencies like cryptocurrency and NFTs allow players to play and earn at the same time. With the use of this technology, players can gain in-game tokens and currencies, which they can sell to other players for real money.
The reason for its popularity is that it enables you to maintain a transparent transaction. It has strong anti-cheat mechanisms, which enable you to make secure online transactions.
Additionally, it also provides a safe working space for blockchain game developers. For this reason alone, more game developers are encouraged to build games on blockchain platforms.
Cross-platform gaming is breaking the boundaries by connecting players across different gaming platforms. You can play games with your friends on different platforms, such as PCs, consoles, smartphones, etc., simultaneously.
With the rising popularity of multiplayer games, cross-platform game development is one of the important services that will be in demand in upcoming video games. Even today, many popular video game developers are optimizing their previously released games to stream on multiple platforms.
In the future, it is predicted that this innovation will bring the console wars to an end by allowing players to play games across different gaming platforms at the same time.
The video game business has the potential for enormous expansion in the future, creating artistic and original games. Many technology experts expect a tectonic shift where video games will become an integral part of daily life, with a major number of games available for free.
As people in the digital age seek meaningful interactions through virtual platforms, the potential for competitive multiplayer gaming is growing at a much faster pace. The integration of many new technologies and strong network infrastructures will enable players to communicate with one another in virtual spaces, providing real-time interactions as well as the capacity to do various tasks, earn rewards, and explore immersive environments.
Crypto gaming and esports are already on the rise, and these trends will likely acquire even more traction in the future. Furthermore, high-fidelity graphic gaming experiences are also rising in demand, as gamers prefer high quality games regardless of the cost. These developments ensure gamers a realistic and enjoyable experience in the upcoming days.
In conclusion, video games are breaking traditional standards by offering real world experiences in a virtual space. By integrating technologies such as cloud gaming, 5G, and AR/VR combined with successful revenue models, video games are revolutionizing the entertainment industry.
While certain technical limitations now prevent the complete implementation of these technologies in video games, there is hope that advances in AI and machine learning may overcome these obstacles in the next few years, bringing about an era of seamless gaming experiences.
Juego Studios is one of the best game development companies in the world. We offer various game development services, including full-cycle development, cross-platform support, game porting, and art outsourcing services. Apart from that, you can also hire game developers at reasonable rates who can help in making successful video games.
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