Like many other creative industries, the games industry is not just about helping people have fun. It’s an industry, made up of businesses, and those business exist to make money.
In the post Ad-Supported Gaming, I described three different models for using advertising as a way of making computer games pay. In this post, and the ones that follow it in the topic, we’ll consider some of the other business models that support games and gaming, and look at how the distribution models for different sorts of games compares with the distribution of other digital media such as music, movies and even books.
But for now – let’s consider casual games, which in many cases need to (appear to) be “free” to the end-user, or they won’t play them… And if they are being sold, then they need to be affordable (which means they need to be sold in volumes large enough to cover the cost of development and distribution, though not played in such large volumes as if they were purely ad-supported).
The following opinion piece – The Future For Casual Game Revenue Growth? – that appeared on the GamaSutra news site tries to identify the different ways in which the developer of a casual game can make a living. Try to answer the following questions based on your reading of it:
- what are the three main ways of covering the development costs of, and ideally securing a profit from, casual games that are identified in the article?
- how does the use of advertising in casual games compare with advertising on television?
The article identifies three main ways of raising revenue:
- In-game advertising, in which advertising space is sold within a game; the developer uses ad-revenue to provide them with an income;
- “the direct route”, whereby “a direct connection [is made] between independent developers and gamers”; here, the developer tries to sell direct to the end-user. This position is contrasted with ‘selling out’ to a publisher who is likely to market the game in a traditional way;
- “increase the perceived value of their games by upping the price”: that is, sell the game as a “superior product”, a counter-intuitive and potentially risky strategy in which differentiation of the game is achieved by pricing it above that of competitors, some of which are made to look cheap, and – one hopes – of lower perceived quality!
Several other approaches are mentioned in passing in the closing section: “promotional contests to award points to those who purchase new games, thereby increasing sales and loyalty. In-site ads, merchandising and game trailers, which are sold as advertising elsewhere”.
Casual games are seen to be similar to television sitcoms in that “…in exchange for the ability to play and be entertained for a short period of time, people are willing to watch ads” (these ads correspond to the interstitial or pre-roll ads that were described in Ad-Supported Gaming). However, it is also possible “to integrate dynamic in-game advertising platforms into the game. [That is, in-game advertising.] With the constant connection, the adverts can be altered based upon a player’s moves, or even their geographic location, providing targeted and more effective advertising. … It wouldn’t be surprising if in-game ads soon become integral to the content of a game, offering clues, extra levels or other hidden rewards for the player who clicks through.” In-game advertising, even in casual games, offers the potential for interaction. By engaging the player emotionally in the game, they may well be forced to pay more attention to the promotional message or advertised goods (for example, if you have to go in search of the missing Nuvo Cola can…!)
Can you think of any other “routes to free” for casual games? Post your thoughts back as comments… Here are some ideas to get you started: Lions, Tigers, Free Games… Oh My!.