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<span>Ongoing-based revenue model</span> </div> </a> <ul id="toc-Ongoing-based_revenue_model-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Ownership_versus_licensing" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Ownership_versus_licensing"> <div class="vector-toc-text"> <span class="vector-toc-numb">2.3</span> <span>Ownership versus licensing</span> </div> </a> <ul id="toc-Ownership_versus_licensing-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-Impact" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Impact"> <div class="vector-toc-text"> <span class="vector-toc-numb">3</span> <span>Impact</span> </div> </a> <ul id="toc-Impact-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Criticism" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#Criticism"> <div class="vector-toc-text"> 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class="vector-toc-numb">5.5</span> <span>2010s</span> </div> </a> <ul id="toc-2010s-sublist" class="vector-toc-list"> </ul> </li> <li id="toc-Historical_pricing_of_games" class="vector-toc-list-item vector-toc-level-2"> <a class="vector-toc-link" href="#Historical_pricing_of_games"> <div class="vector-toc-text"> <span class="vector-toc-numb">5.6</span> <span>Historical pricing of games</span> </div> </a> <ul id="toc-Historical_pricing_of_games-sublist" class="vector-toc-list"> </ul> </li> </ul> </li> <li id="toc-References" class="vector-toc-list-item vector-toc-level-1 vector-toc-list-item-expanded"> <a class="vector-toc-link" href="#References"> <div class="vector-toc-text"> <span class="vector-toc-numb">6</span> <span>References</span> </div> </a> <ul id="toc-References-sublist" class="vector-toc-list"> </ul> </li> </ul> </div> </div> </nav> </div> </div> <div class="mw-content-container"> <main id="content" class="mw-body"> <header class="mw-body-header vector-page-titlebar"> <nav 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class="mw-body-content"><div class="mw-content-ltr mw-parser-output" lang="en" dir="ltr"><div class="shortdescription nomobile noexcerpt noprint searchaux" style="display:none">Process of generating revenue from a video game product</div> <p class="mw-empty-elt"> </p><p><b>Video game monetization</b> is a type of process that a <a href="/wiki/Video_game_publisher" title="Video game publisher">video game publisher</a> can use to generate revenue from a <a href="/wiki/Video_game" title="Video game">video game</a> product. The methods of monetization may vary between games, especially when they come from different genres or platforms, but they all serve the same purpose to return money to the game developers, copyright owners, and other stakeholders. As the monetization methods continue to diversify, they also affect the game design in a way that sometimes leads to criticism. </p> <meta property="mw:PageProp/toc" /> <div class="mw-heading mw-heading2"><h2 id="Methods">Methods</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=1" title="Edit section: Methods"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Although there are several business models to monetize <a href="/wiki/Video_game" title="Video game">video games</a>, they can be categorized into six major models.<sup id="cite_ref-:1_1-0" class="reference"><a href="#cite_note-:1-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> A video game may use more than one of these models at once.<sup id="cite_ref-:0_2-0" class="reference"><a href="#cite_note-:0-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Retail">Retail</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=2" title="Edit section: Retail"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <figure class="mw-default-size" typeof="mw:File/Thumb"><a href="/wiki/File:Gamestop_Kingstowne_-_2.jpg" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/b/b3/Gamestop_Kingstowne_-_2.jpg/220px-Gamestop_Kingstowne_-_2.jpg" decoding="async" width="220" height="165" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/b/b3/Gamestop_Kingstowne_-_2.jpg/330px-Gamestop_Kingstowne_-_2.jpg 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/b/b3/Gamestop_Kingstowne_-_2.jpg/440px-Gamestop_Kingstowne_-_2.jpg 2x" data-file-width="3264" data-file-height="2448" /></a><figcaption>GameStop, a brick and mortar game retailer</figcaption></figure> <p><b>Retail purchase</b> is the traditional method by which games are sold from <a href="/wiki/Brick_and_mortar" title="Brick and mortar">brick and mortar</a> stores or online retailers.<sup id="cite_ref-:0_2-1" class="reference"><a href="#cite_note-:0-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> Customers pay for a physical copy of the game and any other game related peripheral devices required for play in-store. Retail purchasing has previously made up the bulk of game-related transactions, but it has been on the decline in recent years due to the rise of digital distribution and mobile gaming. However, the importance of brick and mortar game stores as a place for gamers to gather and show their passion still remains. Furthermore, some retail purchases may come with collectible boxes and possible in-game items to attract customers over digital download.<sup id="cite_ref-3" class="reference"><a href="#cite_note-3"><span class="cite-bracket">[</span>3<span class="cite-bracket">]</span></a></sup> The retail market also incorporates the second-hand market, the trading-in and resale of used games, such as through <a href="/wiki/GameStop" title="GameStop">GameStop</a>.<sup id="cite_ref-used_game_market_4-0" class="reference"><a href="#cite_note-used_game_market-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Digital_distribution">Digital distribution</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=3" title="Edit section: Digital distribution"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1236090951">.mw-parser-output .hatnote{font-style:italic}.mw-parser-output div.hatnote{padding-left:1.6em;margin-bottom:0.5em}.mw-parser-output .hatnote i{font-style:normal}.mw-parser-output .hatnote+link+.hatnote{margin-top:-0.5em}@media print{body.ns-0 .mw-parser-output .hatnote{display:none!important}}</style><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Digital_distribution_in_video_games" class="mw-redirect" title="Digital distribution in video games">Digital distribution in video games</a></div> <p><b>Digital distribution</b> or <b>digital download</b> is similar in practice to retail purchasing, but is different in venue. Instead of acquiring a game through a physical store, customers buy their games online and download the game's data directly to their devices. Many games sold through <a href="/wiki/Digital_distribution_in_video_games" class="mw-redirect" title="Digital distribution in video games">digital download</a> are distributed by means of a third-party service that functions in the same way as a physical store, selling a variety of games from many different developers in one location.<sup id="cite_ref-:0_2-2" class="reference"><a href="#cite_note-:0-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Valve_Corporation" title="Valve Corporation">Valve</a>'s <a href="/wiki/Steam_(service)" title="Steam (service)">Steam</a> is an example of digital distribution platforms for <a href="/wiki/PC_game" title="PC game">PC gaming</a>. </p> <div class="mw-heading mw-heading3"><h3 id="Subscription">Subscription</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=4" title="Edit section: Subscription"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Subscription_business_model" title="Subscription business model">Subscription business model</a></div> <p><b>Subscription model</b> is a business model where a game requires continuous, ongoing payments from customers in order to play the game. Games that utilize subscription often sell access in blocks of one-month increments or in multiples thereof. Once a subscription runs out or is canceled by a customer, their access to the game ceases or is reduced until they re-subscribe. This method is most often associated with games that <a href="/wiki/Always-on_DRM" title="Always-on DRM">require an online connection</a> or services that require capital to operate on the part of the publisher or developer. An example of games that use subscription model is <a href="/wiki/World_of_Warcraft" title="World of Warcraft">World of Warcraft</a>.<sup id="cite_ref-:0_2-3" class="reference"><a href="#cite_note-:0-2"><span class="cite-bracket">[</span>2<span class="cite-bracket">]</span></a></sup> </p> <figure class="mw-default-size" typeof="mw:File/Thumb"><a href="/wiki/File:PlayStationPlus_(No_Trademark).svg" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/e/e1/PlayStationPlus_%28No_Trademark%29.svg/220px-PlayStationPlus_%28No_Trademark%29.svg.png" decoding="async" width="220" height="223" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/e/e1/PlayStationPlus_%28No_Trademark%29.svg/330px-PlayStationPlus_%28No_Trademark%29.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/e/e1/PlayStationPlus_%28No_Trademark%29.svg/440px-PlayStationPlus_%28No_Trademark%29.svg.png 2x" data-file-width="512" data-file-height="520" /></a><figcaption>Sony's subscription-based gaming service</figcaption></figure> <p><b>Subscription service</b> is, on the other hand, not a direct subscription to a game but a subscription to gaming-related services.<sup id="cite_ref-5" class="reference"><a href="#cite_note-5"><span class="cite-bracket">[</span>5<span class="cite-bracket">]</span></a></sup> These services may include, but not limited to, monthly games such as <a href="/wiki/Humble_Bundle" title="Humble Bundle">Humble Bundle</a>, temporary access to game library such as <a href="/wiki/Origin_Access" class="mw-redirect" title="Origin Access">Origin Access</a>, and access to multiplayer online session such as <a href="/wiki/PlayStation_Plus" class="mw-redirect" title="PlayStation Plus">PlayStation Plus</a>.<sup id="cite_ref-6" class="reference"><a href="#cite_note-6"><span class="cite-bracket">[</span>6<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Microtransaction">Microtransaction</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=5" title="Edit section: Microtransaction"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Microtransaction" title="Microtransaction">Microtransaction</a></div> <figure class="mw-default-size" typeof="mw:File/Thumb"><a href="/wiki/File:Credit-cards.jpg" class="mw-file-description"><img src="//upload.wikimedia.org/wikipedia/commons/thumb/4/4f/Credit-cards.jpg/220px-Credit-cards.jpg" decoding="async" width="220" height="165" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/4/4f/Credit-cards.jpg/330px-Credit-cards.jpg 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/4/4f/Credit-cards.jpg/440px-Credit-cards.jpg 2x" data-file-width="1600" data-file-height="1200" /></a><figcaption>Credit cards are a popular payment method for digital distribution as well as microtransactions.</figcaption></figure> <p><b>Microtransaction</b> (MTX) is a business model where aspects of a game's contents can be purchased to enhance the game experience for the player. These aspects may range among new playable contents, in-game currencies, cosmetic options, and otherwise unavailable or restricted gameplay advantages. Traditionally, these purchases tend to be relatively inexpensive but numerous in variety. <a href="/wiki/Microtransaction" title="Microtransaction">Microtransactions</a> are often common in social and mobile games where potential customers may be hesitant to purchase a full game, but more at ease with smaller, yet more numerous payments. </p> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Downloadable_content" title="Downloadable content">Downloadable content</a></div> <p><b>Downloadable content</b> (DLC) is a kind of microtransaction that expands the base game by providing additional contents. Depending on the game and publisher, a downloadable content may be a large expansion that greatly impacts the game, or a series of smaller expansions.<sup id="cite_ref-7" class="reference"><a href="#cite_note-7"><span class="cite-bracket">[</span>7<span class="cite-bracket">]</span></a></sup> These expansions can be either skins, maps, story, or even a new game mode based on the main game.<sup id="cite_ref-8" class="reference"><a href="#cite_note-8"><span class="cite-bracket">[</span>8<span class="cite-bracket">]</span></a></sup> </p> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Virtual_currency" title="Virtual currency">Virtual currency</a></div> <p><b>Premium currency</b> is a type of virtual currency used by many free-to-play games to support microtransactions, such as V-bucks used for <i><a href="/wiki/Fortnite" title="Fortnite">Fortnite</a></i> or Robux for <i><a href="/wiki/Roblox" title="Roblox">Roblox</a></i>. While many games have a virtual currency that is gained while playing the game and can be used to buy items and equipment, premium currency generally is acquired by exchanging real-world money for a fixed quantity of virtual currency, when then is used to purchase in-game items. Developers can opt to reward premium currency for playing the game, such as the ability to recoup the cost of a <i>Fortnite</i> battle pass by completing it, and can discount in-game store items. Most often, premium currency cannot be redeemed for real-world money, with one notable exception being <i><a href="/wiki/Second_Life" title="Second Life">Second Life</a></i>. Because of this limitation, premium currencies can be seen as predatory: these currencies are often only provided in packs of specific sizes, so that players cannot purchase the exact amount needed to acquire an in-game item, and thus some of the purchased premium currency will remain unspent.<sup id="cite_ref-9" class="reference"><a href="#cite_note-9"><span class="cite-bracket">[</span>9<span class="cite-bracket">]</span></a></sup> </p> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Loot_box" title="Loot box">Loot box</a></div><p><b>Loot box</b> is a variation of microtransaction of which the rewards are random. The player has no control over the rewards they receive for paying in-game or real world currencies although the game often shows a list of possible loots that the player may get from the loot box. The content of the loot box may range from purely cosmetic items with no effect on gameplay, such as skins in <i><a href="/wiki/Overwatch_(video_game)" title="Overwatch (video game)">Overwatch</a></i>, to powerful items with a gameplay advantage that otherwise the player has to grind to achieve.<sup id="cite_ref-10" class="reference"><a href="#cite_note-10"><span class="cite-bracket">[</span>10<span class="cite-bracket">]</span></a></sup> Some games may require the players to rely on loot box system to obtain characters and items more heavily than other games. They are sometimes referred to as a <a href="/wiki/Gacha_game" title="Gacha game">Gacha game</a>.<sup id="cite_ref-11" class="reference"><a href="#cite_note-11"><span class="cite-bracket">[</span>11<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-12" class="reference"><a href="#cite_note-12"><span class="cite-bracket">[</span>12<span class="cite-bracket">]</span></a></sup> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"></p><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Season_pass_(video_games)" title="Season pass (video games)">Season pass (video games)</a> and <a href="/wiki/Battle_pass" title="Battle pass">Battle pass</a></div> <p><b>Season passes</b> allow players to buy multiple pieces of downloadable content for a game as a single purchase, usually at a discount compared to purchasing each piece of content individually. Season passes may be offered before all piece of DLC that would be included are announced, though consumers are usually told of the general type of content they will get and how many pieces of content they will get. Season passes may be offered on annual or more frequent schedules, and later releases of the game may include all season pass material as part of the package offered at a discounted. A related concept is the <b><a href="/wiki/Battle_pass" title="Battle pass">battle pass</a></b> which provides access to a number of in-game cosmetics and other items for players as they either complete challenges for it or gain experience within the game. </p> <div class="mw-heading mw-heading3"><h3 id="Player_trading">Player trading</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=6" title="Edit section: Player trading"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/Blockchain_game" title="Blockchain game">Blockchain game</a></div> <p>Player trading is a business model where in-game items and digital currencies can be traded between players on the game marketplace that allows the publisher to get a cut on transactions that players made. Most of the times,<sup id="cite_ref-:1_1-1" class="reference"><a href="#cite_note-:1-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> The publisher can get a percentage from every transactions, like Steam community market,<sup id="cite_ref-13" class="reference"><a href="#cite_note-13"><span class="cite-bracket">[</span>13<span class="cite-bracket">]</span></a></sup> or from a difference between buying and selling price of the in-game currency, like World of Warcraft.<sup id="cite_ref-14" class="reference"><a href="#cite_note-14"><span class="cite-bracket">[</span>14<span class="cite-bracket">]</span></a></sup> However, player trading can lead to a <a href="/wiki/Gray_market" class="mw-redirect" title="Gray market">gray market</a> where through third-party websites, these virtual items can be bought and sold with real-world currency, which, for games that use gambling-like mechanisms, can violate regional laws. In one specific case, Valve took steps to shut down extensive use of <i><a href="/wiki/Counter-Strike:_Global_Offensive" title="Counter-Strike: Global Offensive">Counter-Strike: Global Offensive</a></i> items that were being used for <a href="/wiki/Skin_gambling" title="Skin gambling">skin gambling</a> after it was discovered that these items were being used to wager on <a href="/wiki/Game_of_chance" title="Game of chance">games of chance</a> by younger players.<sup id="cite_ref-15" class="reference"><a href="#cite_note-15"><span class="cite-bracket">[</span>15<span class="cite-bracket">]</span></a></sup> </p><p>Related to player trading is the incorporation of <a href="/wiki/Blockchain" title="Blockchain">blockchain</a> technology, which purports to provide an encrypted record of ownership and transfer for a digital item. This can be used trade digital items by treating them as <a href="/wiki/Non-fungible_token" title="Non-fungible token">non-fungible tokens</a> (NFTs). These blockchain transactions can also be set up to require that a percentage of the payments in a player-to-player transaction are diverted to the publisher.<sup id="cite_ref-16" class="reference"><a href="#cite_note-16"><span class="cite-bracket">[</span>16<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-17" class="reference"><a href="#cite_note-17"><span class="cite-bracket">[</span>17<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-18" class="reference"><a href="#cite_note-18"><span class="cite-bracket">[</span>18<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-19" class="reference"><a href="#cite_note-19"><span class="cite-bracket">[</span>19<span class="cite-bracket">]</span></a></sup> One of the first examples of a blockchain game was <i><a href="/wiki/Cryptokitties" class="mw-redirect" title="Cryptokitties">Cryptokitties</a></i> in 2017, a <a href="/wiki/Virtual_pet" title="Virtual pet">virtual pet</a> game where unique cartoon cats backed by blockchain (effectively NFTs)could be bred to make new ones that could be traded with others. <i>Cryptokitties</i> made headlines when one of these virtual cats sold for more than <span style="white-space: nowrap">US$100,000</span> via <a href="/wiki/Ethereum" title="Ethereum">Ethereum</a> cryptocurrency.<sup id="cite_ref-20" class="reference"><a href="#cite_note-20"><span class="cite-bracket">[</span>20<span class="cite-bracket">]</span></a></sup> As of 2021, the use of blockchain and NFT for monetization is limited. Some publishers have expressed interest in increasing their use of blockchain and NFT technology.<sup id="cite_ref-21" class="reference"><a href="#cite_note-21"><span class="cite-bracket">[</span>21<span class="cite-bracket">]</span></a></sup> The intersection of video games and blockchain financing is sometimes referred to as "<a href="/wiki/GameFi" class="mw-redirect" title="GameFi">GameFi</a>".<sup id="cite_ref-22" class="reference"><a href="#cite_note-22"><span class="cite-bracket">[</span>22<span class="cite-bracket">]</span></a></sup> Because players can earn money from these sales, such games can also be called "<a href="/wiki/Play-to-earn" class="mw-redirect" title="Play-to-earn">play-to-earn</a>", with limited cases reported of players earning a living salary from participating in these games.<sup id="cite_ref-23" class="reference"><a href="#cite_note-23"><span class="cite-bracket">[</span>23<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Advertising">Advertising</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=7" title="Edit section: Advertising"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p><b>Advertising</b> is a form of indirect monetization. Apart from aforementioned methods of monetization, indirect monetization generate revenue from other sources that does not directly come from the player. Most frequently, this is the placement of advertisements within a game; these may take the form of banner advertisements, commercial breaks in play, or product placement in the game.<sup id="cite_ref-:1_1-2" class="reference"><a href="#cite_note-:1-1"><span class="cite-bracket">[</span>1<span class="cite-bracket">]</span></a></sup> Games that rely on advertisement for returns usually are free-to-play or are cheaper than other games as their production cost has already been subsidized.<sup id="cite_ref-24" class="reference"><a href="#cite_note-24"><span class="cite-bracket">[</span>24<span class="cite-bracket">]</span></a></sup> Undesirable advertising monetization is when the advertisements are designed to look like something the user might click without realizing it is an advertisement.<sup id="cite_ref-25" class="reference"><a href="#cite_note-25"><span class="cite-bracket">[</span>25<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Types">Types</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=8" title="Edit section: Types"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The above methods of monetization can be combined in multiple ways to produce various types of monetization schemes. As a result, games may be classified by the overall scheme used by consumers to pay for content in the game. </p> <div class="mw-heading mw-heading3"><h3 id="Upfront-based_revenue_models">Upfront-based revenue models</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=9" title="Edit section: Upfront-based revenue models"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>These models are based on where the publisher and developer anticipates the bulk of the revenue to be acquires from upfront purchases of the game's title. </p> <dl><dt>Premium<span class="anchor" id="Premium_game"></span></dt> <dd>Premium games are those where the consumer buys the game once through retail or digital distribution, and may purchase additional downloadable content for the game, but the game itself has limited content. This typically describes the bulk of games sold at retail prior to the availability of digital distribution or online functionality, and remains a key sales area for console and computer games, but less common for mobile games.<sup id="cite_ref-26" class="reference"><a href="#cite_note-26"><span class="cite-bracket">[</span>26<span class="cite-bracket">]</span></a></sup></dd></dl> <dl><dt><a href="/wiki/Freeware" title="Freeware">Freeware</a></dt> <dd>Games that are provided free of charge by their developer or publisher. These should not be confused with <a href="/wiki/Open-source" class="mw-redirect" title="Open-source">open-source</a> games, which are games developed and released under <a href="/wiki/Open-source_license" title="Open-source license">open-source</a> or <a href="/wiki/Free-software_license" title="Free-software license">free-software licenses</a>, regardless of whether the user is charged for playing them. Freeware games, on the other hand, are provided free of charge, but might be released under a <a href="/wiki/Proprietary_software" title="Proprietary software">proprietary license</a>.</dd></dl> <dl><dt><a href="/wiki/Shareware" title="Shareware">Shareware</a></dt> <dd>Games that typically follow the freemium model, offering a demo of the game and the ability to unlock the rest of the game with purchase of a code or similar unlocking mechanics. The intended use was for the game's files to be shared with other users, a means to distribute games prior to digital distribution.</dd></dl> <div class="mw-heading mw-heading3"><h3 id="Ongoing-based_revenue_model">Ongoing-based revenue model</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=10" title="Edit section: Ongoing-based revenue model"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In these ongoing revenue models, the publisher and developer may offer the game for free with the expectation that they will earn ongoing revenues from various transactions far along the lifetime of the game. This model is very common for many online games and in the mobile game marketplace. </p> <dl><dt><a href="/wiki/Buy-to-play" title="Buy-to-play">Buy-to-play</a></dt> <dd>Like premium games, the consumer buys the game once to play, but here, the game generally continues to be supported by the developer or publisher by maintaining online servers or producing new content regularly for the title. The player may need to buy access to this new content at times, such as through a season pass.</dd></dl> <dl><dt><a href="/wiki/Free-to-play" title="Free-to-play">Free-to-play</a></dt> <dd>Free-to-play games do not require the player to purchase the title to play, though access to some features and content may require purchase of a subscription or via microtransactions.</dd></dl> <dl><dt><a href="/wiki/Freemium" title="Freemium">Freemium</a></dt> <dd>Games that are free to play to start, but limit how far the player can progress before they must purchase the game.</dd></dl> <dl><dt><a href="/wiki/Subscription_business_model" title="Subscription business model">Subscription model</a> (Pay-to-play)</dt> <dd>Games that require the player to pay a regular subscription fee to maintain access to all parts of a game. The game is typically free-to-play to allow new users to try the game but full access requires the subscription to be paid.</dd></dl> <dl><dt><a href="/wiki/Adware" title="Adware">Advertising-based</a></dt> <dd>Games which are typically free-to-play but require the player to periodically see advertising before they can continue, with the developer or publisher earning revenue from the advertising.</dd></dl> <dl><dt><a href="/wiki/Play-to-earn" class="mw-redirect" title="Play-to-earn">Play-to-earn</a> or Pay-to-earn</dt> <dd>Games that typically incorporate blockchain elements such as NFTs. Players are incentivized to use NFTs to improve their value or create new NFTs, with their sale managed by the video game publisher or developer. The player then is paid by the company for their work towards the new and/or upgraded NFT. There is usually an upfront payment required by the player to get started, typically in the purchase of either cryptocurrency used by the game or in-game currency that they can later trade out, thus making these games "pay-to-earn", and have been considered the equivalent of <a href="/wiki/Ponzi_scheme" title="Ponzi scheme">Ponzi schemes</a>.<sup id="cite_ref-27" class="reference"><a href="#cite_note-27"><span class="cite-bracket">[</span>27<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-28" class="reference"><a href="#cite_note-28"><span class="cite-bracket">[</span>28<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-Ainsley_29-0" class="reference"><a href="#cite_note-Ainsley-29"><span class="cite-bracket">[</span>29<span class="cite-bracket">]</span></a></sup></dd></dl> <div class="mw-heading mw-heading3"><h3 id="Ownership_versus_licensing">Ownership versus licensing</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=11" title="Edit section: Ownership versus licensing"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>Games delivered on physical media which do not install content on a user's console or computer, such as most cartridge-based systems as well as earlier optical media games that simply read content directly from the disc, are generally considered to be products owned by the person that bought the game, and thus gives them the ability to give away or sell that game under principles like the <a href="/wiki/First-sale_doctrine" title="First-sale doctrine">first-sale doctrine</a> of U.S. law; once the person has given away their copy, they generally have no legal means to play it.<sup id="cite_ref-used_game_market_4-1" class="reference"><a href="#cite_note-used_game_market-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p><p>As video game grew popular and the second-hand market for video games became popular, the industry began to introduce methods to limit second-hand sales of games that were delivered on installation media.<sup id="cite_ref-used_game_market_4-2" class="reference"><a href="#cite_note-used_game_market-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> Such methods included labelling games with "Not for Resale" stickers to simply discourage resale, and using <a href="/wiki/Product_key" title="Product key">product keys</a> that could only be used once (through an online confirmation system), making the installation media valueless without a fresh product key.<sup id="cite_ref-used_game_market_4-3" class="reference"><a href="#cite_note-used_game_market-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> The industry has generally settled on using a software license that grants them the ability to install and play the game but restricts them from selling the game again. These licenses typically include <a href="/wiki/End_user_license_agreement" class="mw-redirect" title="End user license agreement">end user license agreements</a> (EULA) that limit what the user can do with the game, such as unlicensed <a href="/wiki/Mod_(video_gaming)" class="mw-redirect" title="Mod (video gaming)">modifications</a>. License transfers may be possible under the EULA, but typically require the original owner to fully divest themselves of all copies of the game and related materials along with the installation media, and assure that the second-hand recipient agrees to the same EULA terms.<sup id="cite_ref-vg_ip_enforce_30-0" class="reference"><a href="#cite_note-vg_ip_enforce-30"><span class="cite-bracket">[</span>30<span class="cite-bracket">]</span></a></sup> Coupled with increased use of digital distribution, the license approach significantly limited the used game market.<sup id="cite_ref-used_game_market_4-4" class="reference"><a href="#cite_note-used_game_market-4"><span class="cite-bracket">[</span>4<span class="cite-bracket">]</span></a></sup> </p><p>Within the United States, the use of software licenses is considered upheld by case law under the <a href="/wiki/Ninth_Circuit" class="mw-redirect" title="Ninth Circuit">Ninth Circuit</a> decision of <i><a href="/wiki/Vernor_v._Autodesk,_Inc." title="Vernor v. Autodesk, Inc.">Vernor v. Autodesk, Inc.</a></i>, which ruled that consumers of software products with licenses are licensees and bound by the EULA and are not owners of the software, invalidating any first-sale rights.<sup id="cite_ref-vg_ip_enforce_30-1" class="reference"><a href="#cite_note-vg_ip_enforce-30"><span class="cite-bracket">[</span>30<span class="cite-bracket">]</span></a></sup> A subsequent Ninth Circuit case, <i><a href="/wiki/MDY_Industries,_LLC_v._Blizzard_Entertainment,_Inc." title="MDY Industries, LLC v. Blizzard Entertainment, Inc.">MDY Industries, LLC v. Blizzard Entertainment, Inc.</a></i>, affirmed the <i>Vernor</i> decision to video games.<sup id="cite_ref-vg_ip_enforce_30-2" class="reference"><a href="#cite_note-vg_ip_enforce-30"><span class="cite-bracket">[</span>30<span class="cite-bracket">]</span></a></sup> </p><p>The situation is more complicated in Europe; in <i>UFC Que Choisir v. Valve Corporation</i> in 2015, a French court ruled against Valve for failing to offer the means for users to freely transfer game licenses between users, a requirement of European law.<sup id="cite_ref-31" class="reference"><a href="#cite_note-31"><span class="cite-bracket">[</span>31<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Impact">Impact</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=12" title="Edit section: Impact"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The video games industry continues to grow as it is expected to generate $138 billion U.S. dollars in 2018, showing a 13.3% increase in revenue from last year.<sup id="cite_ref-32" class="reference"><a href="#cite_note-32"><span class="cite-bracket">[</span>32<span class="cite-bracket">]</span></a></sup> In 2014, digital download model made up 52% of all game sales and overtook retail purchase, the long-time industry standard.<sup id="cite_ref-33" class="reference"><a href="#cite_note-33"><span class="cite-bracket">[</span>33<span class="cite-bracket">]</span></a></sup> Recently, many video game publishers have adopted the <a href="/wiki/Games_as_a_service" title="Games as a service">games as a service</a> model where a game continues to generate revenue after its release. As a result, a game tends to get extended support and more contents post-launch so that it can be monetized via other methods in addition to retails and digital downloads, allowing the consumers to make the most out of their purchase.<sup id="cite_ref-34" class="reference"><a href="#cite_note-34"><span class="cite-bracket">[</span>34<span class="cite-bracket">]</span></a></sup> </p><p>However, since the method of monetization must be decided before the game production, it may affect the game's overall design and how players will interact with the game.<sup id="cite_ref-35" class="reference"><a href="#cite_note-35"><span class="cite-bracket">[</span>35<span class="cite-bracket">]</span></a></sup> Monetization trends like games as a service will shape how new games are designed, potentially making genre that are easy to monetize more popular than others.<sup id="cite_ref-36" class="reference"><a href="#cite_note-36"><span class="cite-bracket">[</span>36<span class="cite-bracket">]</span></a></sup> As a result, proper consideration of any strategy must be given during the design process. Improper consideration of balance between good game design and effective monetization can lead to either players feeling extorted by the game and its developers or a failure of the game to produce enough revenue for the game to turn a profit. In both scenarios, a game in question is likely to fail once on the market, the difference being whether it fails critically or financially.<sup id="cite_ref-37" class="reference"><a href="#cite_note-37"><span class="cite-bracket">[</span>37<span class="cite-bracket">]</span></a></sup> </p><p>In order to fund themselves, many independent game developers raise money by <a href="/wiki/Crowdfunding" title="Crowdfunding">crowdfunding</a>.<sup id="cite_ref-38" class="reference"><a href="#cite_note-38"><span class="cite-bracket">[</span>38<span class="cite-bracket">]</span></a></sup> They can also use <a href="/wiki/Crowdsourcing" title="Crowdsourcing">crowdsourcing</a> to break down the cost of development by distributing the workload to self-motivated individuals.<sup id="cite_ref-39" class="reference"><a href="#cite_note-39"><span class="cite-bracket">[</span>39<span class="cite-bracket">]</span></a></sup> Another way for independent developers to fund their games is to release an unfinished game as an <a href="/wiki/Early_access" title="Early access">early access</a> where the players may purchase the game at a discounted price before it is complete.<sup id="cite_ref-40" class="reference"><a href="#cite_note-40"><span class="cite-bracket">[</span>40<span class="cite-bracket">]</span></a></sup> </p><p>Microtransactions have recently become a popular monetization model in <a href="/wiki/Massively_multiplayer_online_game" title="Massively multiplayer online game">massively multiplayer online (MMO) games</a>. Previous to this development, the majority of MMOs relied on the subscription model, where users paid a monthly fee to the developer for continual access to the game. Some MMOs have had difficulty in turning a profit under this model however, thanks to too few subscriptions to cover operating costs. This has prompted several MMOs to experiment with alternative monetization strategies, ultimately leading to the adoption of microtransactions. While some MMOs continue to operate under the subscription model, many now have moved to microtransactions to ensure financial stability.<sup id="cite_ref-41" class="reference"><a href="#cite_note-41"><span class="cite-bracket">[</span>41<span class="cite-bracket">]</span></a></sup> With this shift, numerous virtual goods and services in MMOs that may have previously been available through normal play under the subscription model now can only be obtained through real currency transactions and it was expected that the microtransaction model would continue to be used under this model.<sup id="cite_ref-42" class="reference"><a href="#cite_note-42"><span class="cite-bracket">[</span>42<span class="cite-bracket">]</span></a></sup> However, overuse or improper application of microtransactions can make the player base feel forced to pay money and discourage them from playing, while the underuse may lead to too few microtransactions taking place to support the game and its developers.<sup id="cite_ref-:3_43-0" class="reference"><a href="#cite_note-:3-43"><span class="cite-bracket">[</span>43<span class="cite-bracket">]</span></a></sup> </p><p>Indirect monetization has undergone a recent surge in popularity as well. Through a combination of the propagation of both <a href="/wiki/Smartphone" title="Smartphone">smartphones</a> and Indie developers, the <a href="/wiki/Mobile_game" title="Mobile game">mobile games</a> market has flourished. Although it had only 18% share of the video games industry in 2012, mobile games account for 51% of the video games market in 2018.<sup id="cite_ref-44" class="reference"><a href="#cite_note-44"><span class="cite-bracket">[</span>44<span class="cite-bracket">]</span></a></sup> Due to generally lower development, marketing, and maintenance costs as well a large target audience of players, mobile games are able to survive on a smaller income than most other varieties of games. The process is risky, however, since mobile games may often be hit or miss in their success. Games that pull in large numbers of players do well thanks to their advertisement model while those that fail to garner wide appeal do not last long on the market.<sup id="cite_ref-:2_45-0" class="reference"><a href="#cite_note-:2-45"><span class="cite-bracket">[</span>45<span class="cite-bracket">]</span></a></sup> Some have also criticized games implementing the indirect model as many games are made under it that are of low quality, or are non-user friendly with their monetization methods so as to maximize their income at the expense of player enjoyment.<sup id="cite_ref-:2_45-1" class="reference"><a href="#cite_note-:2-45"><span class="cite-bracket">[</span>45<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="Criticism">Criticism</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=13" title="Edit section: Criticism"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style data-mw-deduplicate="TemplateStyles:r1251242444">.mw-parser-output .ambox{border:1px solid #a2a9b1;border-left:10px solid #36c;background-color:#fbfbfb;box-sizing:border-box}.mw-parser-output .ambox+link+.ambox,.mw-parser-output .ambox+link+style+.ambox,.mw-parser-output .ambox+link+link+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+style+.ambox,.mw-parser-output .ambox+.mw-empty-elt+link+link+.ambox{margin-top:-1px}html body.mediawiki .mw-parser-output .ambox.mbox-small-left{margin:4px 1em 4px 0;overflow:hidden;width:238px;border-collapse:collapse;font-size:88%;line-height:1.25em}.mw-parser-output .ambox-speedy{border-left:10px solid #b32424;background-color:#fee7e6}.mw-parser-output .ambox-delete{border-left:10px solid #b32424}.mw-parser-output .ambox-content{border-left:10px solid #f28500}.mw-parser-output .ambox-style{border-left:10px solid #fc3}.mw-parser-output .ambox-move{border-left:10px solid #9932cc}.mw-parser-output .ambox-protection{border-left:10px solid #a2a9b1}.mw-parser-output .ambox .mbox-text{border:none;padding:0.25em 0.5em;width:100%}.mw-parser-output .ambox .mbox-image{border:none;padding:2px 0 2px 0.5em;text-align:center}.mw-parser-output .ambox .mbox-imageright{border:none;padding:2px 0.5em 2px 0;text-align:center}.mw-parser-output .ambox .mbox-empty-cell{border:none;padding:0;width:1px}.mw-parser-output .ambox .mbox-image-div{width:52px}@media(min-width:720px){.mw-parser-output .ambox{margin:0 10%}}@media print{body.ns-0 .mw-parser-output .ambox{display:none!important}}</style><table class="box-Expand_section plainlinks metadata ambox mbox-small-left ambox-content" role="presentation"><tbody><tr><td class="mbox-image"><span typeof="mw:File"><a href="/wiki/File:Wiki_letter_w_cropped.svg" class="mw-file-description"><img alt="[icon]" src="//upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/20px-Wiki_letter_w_cropped.svg.png" decoding="async" width="20" height="14" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/30px-Wiki_letter_w_cropped.svg.png 1.5x, //upload.wikimedia.org/wikipedia/commons/thumb/1/1c/Wiki_letter_w_cropped.svg/40px-Wiki_letter_w_cropped.svg.png 2x" data-file-width="44" data-file-height="31" /></a></span></td><td class="mbox-text"><div class="mbox-text-span">This section <b>needs expansion</b>. You can help by <a class="external text" href="https://en.wikipedia.org/w/index.php?title=Video_game_monetization&action=edit&section=">adding to it</a>. <span class="date-container"><i>(<span class="date">February 2022</span>)</i></span></div></td></tr></tbody></table> <p>Video game monetization has been criticized by journalists who see it as video game publishers being excessively greedy, in particular with the implementation of microtransactions.<sup id="cite_ref-:3_43-1" class="reference"><a href="#cite_note-:3-43"><span class="cite-bracket">[</span>43<span class="cite-bracket">]</span></a></sup> Games such as 2017's <i><a href="/wiki/Star_Wars_Battlefront_II_(2017_video_game)" title="Star Wars Battlefront II (2017 video game)">Star Wars Battlefront II</a></i> have been criticized for gameplay elements that require extensive grinding which can otherwise be bypassed through loot boxes.<sup id="cite_ref-46" class="reference"><a href="#cite_note-46"><span class="cite-bracket">[</span>46<span class="cite-bracket">]</span></a></sup> The increasing adoption of loot boxes in gaming has led to some viewing the mechanic as a form of <a href="/wiki/Online_gambling" title="Online gambling">online gambling</a>, with many countries revising their laws in response.<sup id="cite_ref-47" class="reference"><a href="#cite_note-47"><span class="cite-bracket">[</span>47<span class="cite-bracket">]</span></a></sup> predatory monetization models are also criticized since they tend to target minors and may break child privacy laws.<sup id="cite_ref-48" class="reference"><a href="#cite_note-48"><span class="cite-bracket">[</span>48<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading2"><h2 id="History">History</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=14" title="Edit section: History"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/History_of_video_games" title="History of video games">History of video games</a></div> <div class="mw-heading mw-heading3"><h3 id="Before_the_1980s">Before the 1980s</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=15" title="Edit section: Before the 1980s"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>The tradition of video game monetization can be traced back to the monetization of real life games, before the existence of the computer. A <a href="/wiki/Game" title="Game">game</a> is usually constructed with players, tools and rules. The tools for the game were made by skilled craftsman, usually with valuable materials, as described in the <a href="/wiki/History_of_games" title="History of games">history</a>. Thus, selling game tools for money became an understandable business long before the development of video games. </p><p>The history of video games leads back to the 70's and 80's, when <a href="/wiki/Arcade_games" class="mw-redirect" title="Arcade games">arcade video games</a> become popular worldwide. Following the precedents from the first arcade game to cost a quarter per play, <a href="/wiki/Periscope_(arcade_game)" title="Periscope (arcade game)">Periscope (arcade game)</a>,<sup id="cite_ref-49" class="reference"><a href="#cite_note-49"><span class="cite-bracket">[</span>49<span class="cite-bracket">]</span></a></sup> from the 60s, most arcade game machines are coin-operated. Players have to insert coins to play for certain time or certain lives. This can be classified as a type of microtransaction, and was highly successful during the golden years of arcade games. One of the most popular and influential arcade games, Taito's <a href="/wiki/Space_Invaders" title="Space Invaders">Space Invaders</a> was reported to cause a shortage of 100-yen coins in Japan, 1978.<sup id="cite_ref-50" class="reference"><a href="#cite_note-50"><span class="cite-bracket">[</span>50<span class="cite-bracket">]</span></a></sup> By 1982, the game grossed $2 billion in quarters<sup id="cite_ref-51" class="reference"><a href="#cite_note-51"><span class="cite-bracket">[</span>51<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-Executive_52-0" class="reference"><a href="#cite_note-Executive-52"><span class="cite-bracket">[</span>52<span class="cite-bracket">]</span></a></sup> (equivalent to $7.26 billion in 2015), with a net profit of $450 million.<sup id="cite_ref-Executive_52-1" class="reference"><a href="#cite_note-Executive-52"><span class="cite-bracket">[</span>52<span class="cite-bracket">]</span></a></sup> When the Namco released <a href="/wiki/Pac-man" class="mw-redirect" title="Pac-man">Pac-man</a> in Japan on May 22, 1980, it became immensely popular from its original release to the present day. Later, it became one of the <a href="/wiki/List_of_highest-grossing_arcade_games" class="mw-redirect" title="List of highest-grossing arcade games">highest-grossing video games</a> of all time,<sup id="cite_ref-Kent-143_53-0" class="reference"><a href="#cite_note-Kent-143-53"><span class="cite-bracket">[</span>53<span class="cite-bracket">]</span></a></sup> having generated more than $2.5 billion in quarters by the 1990s . </p> <div class="mw-heading mw-heading3"><h3 id="1980s">1980s</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=16" title="Edit section: 1980s"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>With the development of computer technology, the home computer industry has been packed with competitors from 1980. The home computers started to prove their gaming capability not long after they were introduced to the public, since they are able to run multiple game programs, and release the full potential of the hardware. Compared with arcade machines, people are able to switch between games and play at their homes. Although early computers were weak in compatibility, the IBM PC compatible platform began to take over the fragmented market and ruled the <a href="/wiki/PC_game" title="PC game">PC game</a> platform. On the other hand, the <a href="/wiki/Third_generation_of_video_game_consoles" title="Third generation of video game consoles">Third generation of video game consoles</a>, represented by the <a href="/wiki/Nintendo_Entertainment_System" title="Nintendo Entertainment System">NES console</a> released in 1983, was able to help the North American game console market recover from the <a href="/wiki/North_American_video_game_crash_of_1983" class="mw-redirect" title="North American video game crash of 1983">major crash</a> during 1983 to 1985. From the 1980s, video games on the market were mostly sold in the way of retail purchase. Although the home computers were not specialized in gaming, gaming consoles were. Most games had to be sold in physical mediums, such as a <a href="/wiki/ROM_cartridge" title="ROM cartridge">ROM cartridge</a>, a <a href="/wiki/Floppy_disk" title="Floppy disk">floppy disk</a> or even a <a href="/wiki/Compact_Cassette" class="mw-redirect" title="Compact Cassette">Compact Cassette</a>. For the game console users, buying the hardware costs extra money, but they had more choices on games and suitable input/output device designed for gameplay. </p> <div class="mw-heading mw-heading3"><h3 id="1990s">1990s</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=17" title="Edit section: 1990s"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>While old retail selling kept strong at 1990s, new way of game monetization emerged. The <a href="/wiki/CD-ROM" title="CD-ROM">CD-ROM</a> and other <a href="/wiki/Optical_disc" title="Optical disc">optical discs</a> were taking the place of the cartridge, became the major medium of retail games. The development of web technology and bandwidth in the late 90s made many online games possible. The web based game <a href="/w/index.php?title=Adventure_Games_Live&action=edit&redlink=1" class="new" title="Adventure Games Live (page does not exist)">Adventure Games Live</a> revealed the possibility of the game running purely on a webpage, ever free of charge. </p><p>The handheld gaming devices were invented long before 1990s, but the <a href="/wiki/Game_Boy" title="Game Boy">Game Boy</a> was a milestone on portable game history. The remarkable game innovation<sup id="cite_ref-Didi_Games_54-0" class="reference"><a href="#cite_note-Didi_Games-54"><span class="cite-bracket">[</span>54<span class="cite-bracket">]</span></a></sup> in this decade created a series of game consoles and devices. Handheld game devices with no changeable cartridges were also widely sold. In those cases, buying the hardware and software went together. An example can be the <a href="/wiki/Tamagotchi" title="Tamagotchi">Tamagotchi</a> sold by <a href="/wiki/Bandai" title="Bandai">Bandai</a> from 1996. </p><p>In the early 1990s, online gaming was only starting to emerge as consumer use of the <a href="/wiki/Internet" title="Internet">Internet</a> had yet to gain wide traction, and Internet service plans were typically based on time-limited charges. This effectively gated access to online games which were being offered in subscription model form. However, when <a href="/wiki/America_On-Line" class="mw-redirect" title="America On-Line">America On-Line</a> introduced flat-rate Internet access packages, that gate disappeared, allowing players to play online games indefinitely, which impacted revenue from these titles. One of the first examples of a <a href="/wiki/Massively-multiplayer_online_game" class="mw-redirect" title="Massively-multiplayer online game">massively-multiplayer online game</a> (MMO) was <i><a href="/wiki/Achaea,_Dreams_of_Divine_Lands" title="Achaea, Dreams of Divine Lands">Achaea, Dreams of Divine Lands</a></i>, a text-based <a href="/wiki/Multi-user_dungeon" title="Multi-user dungeon">multi-user dungeon</a> (MUD), released in 1997. Instead of launching with subscription fees to cover operating costs, its creator Matt Mihaly sought other ways to earn revenue, and after offering a few high-quality in-game items for real-world money at an auction, realized a way to make additional revenue. From that, Mihaly programmed into <i>Achaea</i> what is believed to be the first microtransaction, "dual currency" system, where two pools of in-game currency are available, those that are earned in-game, and those that are converted from real-world purchases into the premium currency, which was the only currency that could be used to purchase "virtual goods" in the game.<sup id="cite_ref-55" class="reference"><a href="#cite_note-55"><span class="cite-bracket">[</span>55<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="2000s">2000s</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=18" title="Edit section: 2000s"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1236090951"><div role="note" class="hatnote navigation-not-searchable">See also: <a href="/wiki/History_of_massively_multiplayer_online_games" title="History of massively multiplayer online games">History of massively multiplayer online games</a></div> <p>In the first decade of the century, the game monetization was affected by the booming of the <a href="/wiki/E-commerce" title="E-commerce">e-commerce</a>, as well as hardware, software and other information technology developments. All kinds of online games and multiplayer games were connected through the faster Internet. The craze of <a href="/wiki/MMORPG" class="mw-redirect" title="MMORPG">MMORPG</a> by made the subscription model a profitable way to support the game developers. Many <a href="/wiki/Browser_game" title="Browser game">browser games</a> became free to play in order to attract more visits. At the early age of smartphones, <a href="/wiki/Mobile_game" title="Mobile game">mobile games</a> were paid to download because there was usually no interface for a smartphone to install a physical copy. Standardization and the ubiquity of mobile platforms that allowed for easy purchases by customers, brought on initially by the iPhone App Store and followed closely by the Android Marketplace and other competitors, resulted in a wide spread move towards microtransactions and indirect monetization. After the social network became a big part of the Internet, more games started to take this platform as a way to sell or promote the game. </p><p>The 2000s also introduced the concepts of <a href="/wiki/Microtransaction" title="Microtransaction">microtransactions</a> and <a href="/wiki/Downloadable_content" title="Downloadable content">downloadable content</a> (DLC). The late 1990s saw the emergence of the <a href="/wiki/AAA_(video_game_industry)" title="AAA (video game industry)">triple-A industry</a>, video game developed by large studios with multi-million dollar budgets. These games typically were aimed at a core market of gamers with the latest consoles or high-end personal computers, and at the time, these games would only see most sales in the first few months after the game's initial release. DLC was seen as a means to extend the potential revenue from these games.<sup id="cite_ref-56" class="reference"><a href="#cite_note-56"><span class="cite-bracket">[</span>56<span class="cite-bracket">]</span></a></sup> In 2005, <a href="/wiki/Microsoft" title="Microsoft">Microsoft</a> envisioned the ability to buy digital add-ons for <a href="/wiki/Xbox_360" title="Xbox 360">Xbox 360</a> games through the <a href="/wiki/Xbox_Live_Marketplace" class="mw-redirect" title="Xbox Live Marketplace">Xbox Live Marketplace</a>, allowing players to purchases specific content they wanted at a low price ($1-$5) rather than having to buy a more expensive complete expansion.<sup id="cite_ref-57" class="reference"><a href="#cite_note-57"><span class="cite-bracket">[</span>57<span class="cite-bracket">]</span></a></sup> Though some content was offered before, this concept was cemented with the release of "horse armor" pack for <a href="/wiki/Bethesda_Softworks" title="Bethesda Softworks">Bethesda Softworks</a>'s <i><a href="/wiki/The_Elder_Scrolls_IV:_Oblivion" title="The Elder Scrolls IV: Oblivion">The Elder Scrolls IV: Oblivion</a></i> in 2006, and subsequently followed by many similar content packs over the next few years. While many player expressed outrage at the cost of what was decorative elements in-game, the horse armor pack was one of the top ten expansions that Bethesda sold for the game by 2009.<sup id="cite_ref-58" class="reference"><a href="#cite_note-58"><span class="cite-bracket">[</span>58<span class="cite-bracket">]</span></a></sup> <i>Oblivion</i><span class="nowrap" style="padding-left:0.1em;">'</span>s microtransaction model was considered extremely successful, and was replicated in many other games that followed,<sup id="cite_ref-usgamer_history_59-0" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> with the "horse armor" establishing player acceptance of microtransactions in non-mobile games.<sup id="cite_ref-60" class="reference"><a href="#cite_note-60"><span class="cite-bracket">[</span>60<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="2010s">2010s</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=19" title="Edit section: 2010s"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <p>In the second decade of the century, game monetization models using microtransactions and indirect monetization, moved rapidly towards becoming a mature market. Game production moved from focusing purely on monetization models after competition for player attention became more intense. As a result, the industry has widely moved from a direct focus on monetization metrics in game design to focus on metrics such as player retention and daily active users. This can be visibly seen in the decline in valuations of several prominent free-to-play companies, as well as by studying the differences in game design for top free-to-play to games. </p><p>This approach is considered "<a href="/wiki/Software_as_a_service" title="Software as a service">games as a service</a>", as analysts have found that players put more value in games that provide a regular stream of new content than a title that does not receive updates.<sup id="cite_ref-gibiz_2017_report_61-0" class="reference"><a href="#cite_note-gibiz_2017_report-61"><span class="cite-bracket">[</span>61<span class="cite-bracket">]</span></a></sup> This model helps to assure a long revenue stream from the publisher as well as to allow them to publish fewer games and reduce development costs while still providing new content to players, with the potential to profit twice as fast from the traditional model.<sup id="cite_ref-gibiz_2017_report_61-1" class="reference"><a href="#cite_note-gibiz_2017_report-61"><span class="cite-bracket">[</span>61<span class="cite-bracket">]</span></a></sup> This approach also helps to insulate publishers from impacts of discounts and sales on digital game redemption keys from third-party sellers by requiring additional purchase of content as part of their services to gamers.<sup id="cite_ref-gibiz_2017_report_61-2" class="reference"><a href="#cite_note-gibiz_2017_report-61"><span class="cite-bracket">[</span>61<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Digital_River" title="Digital River">Digital River</a> estimated that the industry's value in 2017 had tripled from previous years due to the use of the "games as a service" model.<sup id="cite_ref-gibiz_2017_report_61-3" class="reference"><a href="#cite_note-gibiz_2017_report-61"><span class="cite-bracket">[</span>61<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Take-Two_Interactive" title="Take-Two Interactive">Take-Two Interactive</a>, in an investor call in November 2017, reported that 42% of their revenues were from "recurrent <a href="/wiki/Consumer_spending" title="Consumer spending">consumer spending</a>" in their latest financial quarter, obtained through the <i><a href="/wiki/Grand_Theft_Auto_Online" title="Grand Theft Auto Online">Grand Theft Auto Online</a></i> component of <i><a href="/wiki/Grand_Theft_Auto_V" title="Grand Theft Auto V">Grand Theft Auto V</a></i>, and the "MyCareer" mode of <i><a href="/wiki/NBA_2K18" title="NBA 2K18">NBA 2K18</a></i>, both which offer players additional content and activities over time. Take-Two anticipates they will be using this model going forward for future games.<sup id="cite_ref-62" class="reference"><a href="#cite_note-62"><span class="cite-bracket">[</span>62<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Ubisoft" title="Ubisoft">Ubisoft</a>, around the same time, reported that revenue from microtransactions and other in-game sales exceeded their revenue from direct digital sales of games during the first two quarters of their financial year for the first time.<sup id="cite_ref-63" class="reference"><a href="#cite_note-63"><span class="cite-bracket">[</span>63<span class="cite-bracket">]</span></a></sup> </p><p>The use of <a href="/wiki/Online_pass" title="Online pass">online passes</a> emerged in 2010, primarily as a means to combat the used game market. While publishers could not prevent players from selling and buying used games such as through the retailer <a href="/wiki/GameStop" title="GameStop">GameStop</a>, they discovered that providing a one-time code within a new game that was needed to access online features, they were able to secure more revenue from selling these online passes to players that had bought the game used.<sup id="cite_ref-usgamer_history_59-1" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Electronic_Arts" title="Electronic Arts">Electronic Arts</a> (EA) had developed the idea of "Project Ten Dollar", attaching content to a code packaged with the game for its upcoming titles for that year, <i><a href="/wiki/Mass_Effect_2" title="Mass Effect 2">Mass Effect 2</a></i>, <i><a href="/wiki/Dragon_Age:_Origins" title="Dragon Age: Origins">Dragon Age: Origins</a></i>, and <i><a href="/wiki/Battlefield:_Bad_Company_2" title="Battlefield: Bad Company 2">Battlefield: Bad Company 2</a></i>.<sup id="cite_ref-64" class="reference"><a href="#cite_note-64"><span class="cite-bracket">[</span>64<span class="cite-bracket">]</span></a></sup> Successful in this area, EA transitioned this towards limiting a player from online play without either having purchased the game new or purchasing its online pass for a used copy, adding this into their popular <a href="/wiki/EA_Sports" title="EA Sports">EA Sports</a> titles, starting with <i><a href="/wiki/Tiger_Woods_PGA_Tour_11" title="Tiger Woods PGA Tour 11">Tiger Woods PGA Tour 11</a></i>.<sup id="cite_ref-usgamer_history_59-2" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> EA justified this as necessary to support their online servers for these titles.<sup id="cite_ref-65" class="reference"><a href="#cite_note-65"><span class="cite-bracket">[</span>65<span class="cite-bracket">]</span></a></sup> <a href="/wiki/Ubisoft" title="Ubisoft">Ubisoft</a> followed suit with "UPlay Passport" system, followed by several other publishers.<sup id="cite_ref-usgamer_history_59-3" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> However, due to changes in <a href="/wiki/Digital_rights_management" title="Digital rights management">digital rights management</a> for the upcoming <a href="/wiki/Eighth_generation_of_video_game_consoles" title="Eighth generation of video game consoles">eighth generation of video game consoles</a> and player complaints, EA ended its online pass program by 2013, with other publishers following within the next few years.<sup id="cite_ref-usgamer_history_59-4" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> </p><p>Simultaneously, the use of <a href="/wiki/Season_pass_(video_gaming)" class="mw-redirect" title="Season pass (video gaming)">season passes</a> to assure access to a large number of downloadable content items that were to be doled out several months after the release of a game become popular. Season passes were priced to offer the items at a total discount than buying them separately, aiming to draw in players to purchase the passes who would unlikely desire to buy all the content separately. This can be seen as equivalent as pre-ordering the downloadable content, often without knowing exactly what that content might be.<sup id="cite_ref-usgamer_history_59-5" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> Publishers were able to gain another retail revenue by selling "deluxe editions" of games that included the season pass as well as other bonus features.<sup id="cite_ref-usgamer_history_59-6" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> The first such season passes arose from 2011 with <a href="/wiki/Rockstar_Games" title="Rockstar Games">Rockstar Games</a>' <i><a href="/wiki/L.A._Noire" title="L.A. Noire">L.A. Noire</a></i>, offering additional cases and costumes, and <a href="/wiki/Warner_Bros._Interactive_Entertainment" class="mw-redirect" title="Warner Bros. Interactive Entertainment">Warner Bros.</a>'s <i><a href="/wiki/Mortal_Kombat_(2011_video_game)" title="Mortal Kombat (2011 video game)">Mortal Kombat</a></i>, providing access to all fighters to be added to the game. Activision followed a similar approach with its "Call of Duty Elite membership" for <i><a href="/wiki/Call_of_Duty:_Modern_Warfare_3" title="Call of Duty: Modern Warfare 3">Call of Duty: Modern Warfare 3</a></i> that provided access to all of its maps planned for the following year.<sup id="cite_ref-usgamer_history_59-7" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> </p><p>Another monetization approach developed in the 2010s was the use of <a href="/wiki/Loot_box" title="Loot box">loot boxes</a>. Loot boxes, which go by many different names, are earned by players as part of progressing in a game, can be purchased with in-game money or through real-world funds, or otherwise offered as promotional items; when opened (either freely or by purchase of a special "key"), they contain a fixed number of random in-game items, doled out based on a rarity system, and which may include both cosmetic items as well as gameplay-affecting equipment.<sup id="cite_ref-usgamer_history_59-8" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> Since loot boxes are designed as part of a <a href="/wiki/Compulsion_loop" title="Compulsion loop">compulsion loop</a> in video game design, some players will be enticed to purchase more loot boxes with real-world funds, providing a further revenue stream to publishers.<sup id="cite_ref-usgamer_history_59-9" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> While loot boxes had been present in games prior to 2016, specifically from the Chinese game market and introduced to Western audiences through a 2010 update in <a href="/wiki/Valve_Corporation" title="Valve Corporation">Valve</a>'s <i><a href="/wiki/Team_Fortress_2" title="Team Fortress 2">Team Fortress 2</a></i>, they were most visible as a result of the popularity and success of <a href="/wiki/Blizzard_Entertainment" title="Blizzard Entertainment">Blizzard</a>'s <i><a href="/wiki/Overwatch_(video_game)" title="Overwatch (video game)">Overwatch</a></i> in 2016.<sup id="cite_ref-usgamer_history_59-10" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> Loot boxes started becoming more common in full-price games, leading to several titles released in 2017 to be criticized for egregious implementations of loot boxes that were seen as anti-consumer, including Microsoft's <i><a href="/wiki/Forza_Motorsport_7" title="Forza Motorsport 7">Forza Motorsport 7</a></i>, Warner Bros. <i><a href="/wiki/Middle-earth:_Shadow_of_War" title="Middle-earth: Shadow of War">Middle-earth: Shadow of War</a></i>, and EA's <i><a href="/wiki/Star_Wars_Battlefront_II_(2017_video_game)" title="Star Wars Battlefront II (2017 video game)">Star Wars Battlefront 2</a></i>.<sup id="cite_ref-usgamer_history_59-11" class="reference"><a href="#cite_note-usgamer_history-59"><span class="cite-bracket">[</span>59<span class="cite-bracket">]</span></a></sup> Because of their random nature, loot boxes are seen by some as a form of gambling, and several national governments have banned or regulated loot boxes under gambling legislation, or are looking to implement such legislation in wake of the loot box controversy arising from <i>Star Wars Battlefront 2</i>. </p><p>The fatigue over loot boxes led to a new monetization approach in the form of <a href="/wiki/Battle_pass" title="Battle pass">battle passes</a>. Initially used by Valve's <i><a href="/wiki/Dota_2" title="Dota 2">Dota 2</a></i>, the battle pass concept was popularized by <i><a href="/wiki/Fortnite_Battle_Royale" title="Fortnite Battle Royale">Fortnite Battle Royale</a></i> in early 2018 and began to be used in other popular games. Battle passes provide a tiered approach to providing in-game customization options, all visible at the start as to avoid the randomization of the loot box approach, and requiring the player to complete various challenges and early in-game experience to unlock these tiers to gain the rewards; some games also provide means for players to use microtransactions to purchase tiers. Battle passes allow developers to roll in new content, encouraging players to purchase a new battle pass to obtain this content.<sup id="cite_ref-66" class="reference"><a href="#cite_note-66"><span class="cite-bracket">[</span>66<span class="cite-bracket">]</span></a></sup> <i>Fortnite</i> had proved a successful model, as while the game is free-to-play, microtransactions to purchase battle passes or to directly buy certain items have brought in hundreds of millions of dollars per month in revenue following their introduction.<sup id="cite_ref-67" class="reference"><a href="#cite_note-67"><span class="cite-bracket">[</span>67<span class="cite-bracket">]</span></a></sup> </p> <div class="mw-heading mw-heading3"><h3 id="Historical_pricing_of_games">Historical pricing of games</h3><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=20" title="Edit section: Historical pricing of games"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <div class="thumb tright" style=""><div class="thumbinner" style="width:402px"><div class="thumbimage noresize" style="width:400px;"> <link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1251242444"><table class="box-Notice plainlinks metadata ambox ambox-notice" role="presentation" style="width:100%;margin:0;"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><span><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/40px-Information_icon4.svg.png" decoding="async" width="40" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/60px-Information_icon4.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/80px-Information_icon4.svg.png 2x" data-file-width="620" data-file-height="620" /></span></span></div></td><td class="mbox-text" style="text-align: left;"><div class="mbox-text-span">Graphs are unavailable due to technical issues. There is more info on <a href="https://phabricator.wikimedia.org/T334940" class="extiw" title="phab:T334940">Phabricator</a> and on <a href="https://www.mediawiki.org/wiki/Extension:Graph/Plans" class="extiw" title="mw:Extension:Graph/Plans">MediaWiki.org</a>.</div></td></tr></tbody></table><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1251242444"><table class="box-Notice plainlinks metadata ambox ambox-notice" role="presentation" style="width:100%;margin:0;"><tbody><tr><td class="mbox-image"><div class="mbox-image-div"><span typeof="mw:File"><span><img alt="" src="//upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/40px-Information_icon4.svg.png" decoding="async" width="40" height="40" class="mw-file-element" srcset="//upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/60px-Information_icon4.svg.png 1.5x, //upload.wikimedia.org/wikipedia/en/thumb/1/1d/Information_icon4.svg/80px-Information_icon4.svg.png 2x" data-file-width="620" data-file-height="620" /></span></span></div></td><td class="mbox-text" style="text-align: left;"><div class="mbox-text-span">Graphs are unavailable due to technical issues. There is more info on <a href="https://phabricator.wikimedia.org/T334940" class="extiw" title="phab:T334940">Phabricator</a> and on <a href="https://www.mediawiki.org/wiki/Extension:Graph/Plans" class="extiw" title="mw:Extension:Graph/Plans">MediaWiki.org</a>.</div></td></tr></tbody></table></div><div class="thumbcaption">Average cost of top-end video games by year, with cartridge-based games shown in red, and disc-based games in green.<br />Top: unadjusted for inflation. Bottom: adjusted to 2020 dollars.<sup id="cite_ref-arstech_prices_68-0" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup></div></div></div> <p>The pricing of video games historically has not be set by any fixed price point though the markets will tend to average to a common price for a top-end game made by a first-party studio or a <a href="/wiki/AAA_(video_game_industry)" title="AAA (video game industry)">"triple-A" (AAA)</a> developer, with games of lesser quality ("bargain-bin games"), or those made by smaller developers, such as indie games, sold under this point.<sup id="cite_ref-bloomberg_nov2020_70_69-0" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> Uncommonly, a game may ask for a higher price than the average but typically due to additional hardware or features sold. For example, Sega released <i><a href="/wiki/Virtua_Racing" title="Virtua Racing">Virtua Racing</a></i>, originally an arcade game, for its <a href="/wiki/Sega_Genesis" title="Sega Genesis">Sega Genesis</a> system by including the Virtua Processor used in the arcade machines within the cartridge itself, bringing the cartridge to a <span style="white-space: nowrap">US$100</span> <a href="/wiki/MSRP" class="mw-redirect" title="MSRP">MSRP</a> compared with the average <span style="white-space: nowrap">US$60</span> for most Genesis games.<sup id="cite_ref-arstech_prices_68-1" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup> </p><p>Pricing of games is based on numerous factors beyond development costs. It includes publisher payments including their marketing fees, manufacturing and printing costs, licensing fees for consoles, distribution, and retailer cuts, as well as accounting for possible returned inventory. An estimate from <i><a href="/wiki/The_Los_Angeles_Times" class="mw-redirect" title="The Los Angeles Times">The Los Angeles Times</a></i> of the costs behind a <span style="white-space: nowrap">US$60</span> game in 2010 showed that only <span style="white-space: nowrap">US$27</span> of that price, approximately 45%, was based on the publishers' costs which included development costs.<sup id="cite_ref-70" class="reference"><a href="#cite_note-70"><span class="cite-bracket">[</span>70<span class="cite-bracket">]</span></a></sup> Some of these costs remain unchanged over time, but technology improvements can see factors like manufacturing and distribution costs drop due to new media types and distribution, while more advanced game features will require greater development and publisher budgets. </p><p>Historically, the pricing of video games follows the trends of the industry. Initial cartridge-based games for the second generation in the early 1980s were around <span style="white-space: nowrap">US$30−40</span>. After the 1983 crash and the rapid technology advance of consoles over the third, fourth, and fifth generation, cartridge costs also rose due to added costs of ROM storage and <a href="/wiki/Coprocessor" title="Coprocessor">coprocessors</a> within cartridges, bringing prices up to <span style="white-space: nowrap">US$70</span> around the late 1990s.<sup id="cite_ref-arstech_prices_68-2" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-bloomberg_nov2020_70_69-1" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> </p><p>The fifth generation of consoles as well as personal computer games brought the introduction of optical media for game distribution, which was cheaper to produce. Initial games introduced on optical media were often priced comparable with cartridge games at around <span style="white-space: nowrap">US$60−70</span> but after a few years, the price of these games settled to around <span style="white-space: nowrap">US$50</span>.<sup id="cite_ref-bloomberg_nov2020_70_69-2" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> Upon the introduction of the seventh generation of consoles in the mid-'00s, publishers started pushing at a <span style="white-space: nowrap">US$60</span> price point for games, corresponding with ongoing economic growth at that time.<sup id="cite_ref-bloomberg_nov2020_70_69-3" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> The <span style="white-space: nowrap">US$60</span> price remained a constant for fifteen years through the seventh- and eighth generations of consoles.<sup id="cite_ref-arstech_prices_68-3" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup> However, these costs represent the initial purchase retail costs, and as described above, since around 2010, post-release monetization through DLC, season passes and other forms have become the common market practice with most AAA games to obtain additional review after the initial sale, in addition to collector's editions for initial sales.<sup id="cite_ref-arstech_prices_68-4" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup><sup id="cite_ref-bloomberg_nov2020_70_69-4" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> </p><p>There were industry indicators that another price bump was expected to occur up to <span style="white-space: nowrap">US$70</span> with the introduction of the new generation of consoles, the <a href="/wiki/PlayStation_5" title="PlayStation 5">PlayStation 5</a> and <a href="/wiki/Xbox_Series_X_and_Series_S" title="Xbox Series X and Series S">Xbox Series X and Series S</a> in November 2020.<sup id="cite_ref-arstech_prices_68-5" class="reference"><a href="#cite_note-arstech_prices-68"><span class="cite-bracket">[</span>68<span class="cite-bracket">]</span></a></sup> This was primarily due to the more advanced technology that the new consoles offer that can run more impressive games but require greater developer resources to commit to supporting those features. The price bump had also been one that some in the industry believed should have happened sooner, but there had been strong resistance to move off the <span style="white-space: nowrap">US$60</span> price point without good reason.<sup id="cite_ref-71" class="reference"><a href="#cite_note-71"><span class="cite-bracket">[</span>71<span class="cite-bracket">]</span></a></sup> The <span style="white-space: nowrap">US$60</span> price point was a minimum <a href="/wiki/Resale_price_maintenance" title="Resale price maintenance">resale price maintenance</a> that distributors of the high-end games set for retailers as it gave distributors and retailers an assurance of how much take of each sale they got and could plan their businesses around that, and moving away from that model without other market forces at play would be risky.<sup id="cite_ref-72" class="reference"><a href="#cite_note-72"><span class="cite-bracket">[</span>72<span class="cite-bracket">]</span></a></sup> </p><p>Prior to September 2020, some individual games had been marked at the higher price tag, with <a href="/wiki/Take-Two_Interactive" title="Take-Two Interactive">Take-Two Interactive</a>'s <i><a href="/wiki/NBA_2K21" title="NBA 2K21">NBA 2K21</a></i> being the first such game.<sup id="cite_ref-bloomberg_nov2020_70_69-5" class="reference"><a href="#cite_note-bloomberg_nov2020_70-69"><span class="cite-bracket">[</span>69<span class="cite-bracket">]</span></a></sup> Upon announcement of the pricing and release date of the PlayStation 5 in September 2020, Sony confirmed that it was adopting the <span style="white-space: nowrap">US$70</span> price point for some of its first party games for the platform.<sup id="cite_ref-73" class="reference"><a href="#cite_note-73"><span class="cite-bracket">[</span>73<span class="cite-bracket">]</span></a></sup> Sony Interactive Entertainment president Jim Ryan said that this increase reflected the entertainment value of the game, stating "If you measure the hours of entertainment provided by a video game, such as <i><a href="/wiki/Demon%27s_Souls" title="Demon's Souls">Demon's Souls</a></i> compared to any other form of entertainment, I think that's a very straightforward comparison to draw."<sup id="cite_ref-74" class="reference"><a href="#cite_note-74"><span class="cite-bracket">[</span>74<span class="cite-bracket">]</span></a></sup> Tim Stuart, the chief financial officer for Microsoft's Xbox division, also suggested that prices for their first-party games on the Xbox Series X/S will increase from <span style="white-space: nowrap">US$60</span> after the console's launch.<sup id="cite_ref-75" class="reference"><a href="#cite_note-75"><span class="cite-bracket">[</span>75<span class="cite-bracket">]</span></a></sup> Ubisoft stated in September 2022 that its AAA games going forward will likely carry the <span style="white-space: nowrap">$70</span> price.<sup id="cite_ref-76" class="reference"><a href="#cite_note-76"><span class="cite-bracket">[</span>76<span class="cite-bracket">]</span></a></sup> By the end of 2022, both Sony and Microsoft had committed to $70 games from their first-party studios,<sup id="cite_ref-77" class="reference"><a href="#cite_note-77"><span class="cite-bracket">[</span>77<span class="cite-bracket">]</span></a></sup> while Nintendo began offering select games at $70 in 2023, making the pricing decision on a case-by-case basis going forward.<sup id="cite_ref-78" class="reference"><a href="#cite_note-78"><span class="cite-bracket">[</span>78<span class="cite-bracket">]</span></a></sup> </p> <div style="clear:both;" class=""></div> <div class="mw-heading mw-heading2"><h2 id="References">References</h2><span class="mw-editsection"><span class="mw-editsection-bracket">[</span><a href="/w/index.php?title=Video_game_monetization&action=edit&section=21" title="Edit section: References"><span>edit</span></a><span class="mw-editsection-bracket">]</span></span></div> <style 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a{background:url("//upload.wikimedia.org/wikipedia/commons/a/aa/Lock-red-alt-2.svg")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-ws-icon a{background:url("//upload.wikimedia.org/wikipedia/commons/4/4c/Wikisource-logo.svg")right 0.1em center/12px no-repeat}body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-free a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-limited a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-registration a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .id-lock-subscription a,body:not(.skin-timeless):not(.skin-minerva) .mw-parser-output .cs1-ws-icon a{background-size:contain;padding:0 1em 0 0}.mw-parser-output .cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;color:var(--color-error,#d33)}.mw-parser-output .cs1-visible-error{color:var(--color-error,#d33)}.mw-parser-output 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Retrieved <span class="nowrap">November 17,</span> 2020</span>.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=Seeking+Alpha&rft.atitle=Microsoft+Corporation+%28MSFT%29+Management+Presents+at+Jefferies+Interactive+Entertainment+Virtual+Conference+%28Transcript%29&rft.date=2020-11-13&rft.aulast=Transcripts&rft.aufirst=SA&rft_id=https%3A%2F%2Fseekingalpha.com%2Farticle%2F4388809-microsoft-corporation-msft-management-presents-jefferies-interactive-entertainment-virtual&rfr_id=info%3Asid%2Fen.wikipedia.org%3AVideo+game+monetization" class="Z3988"></span></span> </li> <li id="cite_note-76"><span class="mw-cite-backlink"><b><a href="#cite_ref-76">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFIvan2022" class="citation web cs1">Ivan, Tom (September 12, 2022). <a rel="nofollow" class="external text" href="https://www.videogameschronicle.com/news/ubisoft-says-70-price-tag-will-now-be-the-norm-for-its-big-aaa-games/">"Ubisoft says $70 price tag will now be the norm for its 'big AAA games'<span class="cs1-kern-right"></span>"</a>. <i><a href="/w/index.php?title=Video_Games_Chronicles&action=edit&redlink=1" class="new" title="Video Games Chronicles (page does not exist)">Video Games Chronicles</a></i><span class="reference-accessdate">. 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December 5, 2022.</cite><span title="ctx_ver=Z39.88-2004&rft_val_fmt=info%3Aofi%2Ffmt%3Akev%3Amtx%3Ajournal&rft.genre=article&rft.jtitle=Eurogamer.net&rft.atitle=Xbox+will+join+other+publishers+in+selling+games+for+%2470+next+year&rft.date=2022-12-05&rft_id=https%3A%2F%2Fwww.eurogamer.net%2Fxbox-will-join-other-publishers-in-selling-games-for-70-next-year&rfr_id=info%3Asid%2Fen.wikipedia.org%3AVideo+game+monetization" class="Z3988"></span></span> </li> <li id="cite_note-78"><span class="mw-cite-backlink"><b><a href="#cite_ref-78">^</a></b></span> <span class="reference-text"><link rel="mw-deduplicated-inline-style" href="mw-data:TemplateStyles:r1238218222"><cite id="CITEREFBonthuys2023" class="citation web cs1">Bonthuys, Darryn (February 9, 2023). <a rel="nofollow" class="external text" href="https://www.gamespot.com/articles/nintendo-says-70-switch-game-pricing-will-be-evaluated-on-a-case-by-case-basis/1100-6511366/">"Nintendo Says $70 Switch Game Pricing Will Be Evaluated On A "Case-By-Case" Basis"</a>. <i><a href="/wiki/GameSpot" title="GameSpot">GameSpot</a></i><span class="reference-accessdate">. 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href="/wiki/Template:Video_game_monetization" title="Template:Video game monetization"><abbr title="View this template">v</abbr></a></li><li class="nv-talk"><a href="/wiki/Template_talk:Video_game_monetization" title="Template talk:Video game monetization"><abbr title="Discuss this template">t</abbr></a></li><li class="nv-edit"><a href="/wiki/Special:EditPage/Template:Video_game_monetization" title="Special:EditPage/Template:Video game monetization"><abbr title="Edit this template">e</abbr></a></li></ul></div><div id="Video_game_monetization" style="font-size:114%;margin:0 4em"><a class="mw-selflink selflink">Video game monetization</a></div></th></tr><tr><th scope="row" class="navbox-group" style="width:1%">General concepts</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Digital_distribution" title="Digital distribution">Digital distribution</a></li> <li><a href="/wiki/Downloadable_content" title="Downloadable content">Downloadable content</a></li> <li><a href="/wiki/Games_as_a_service" title="Games as a service">Games as a service</a></li> <li><a href="/wiki/Microtransaction" title="Microtransaction">Microtransactions</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Types</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Adware" title="Adware">Advertising-based</a></li> <li><a href="/wiki/Blockchain_game" title="Blockchain game">Blockchain game</a></li> <li><a href="/wiki/Buy-to-play" title="Buy-to-play">Buy-to-play</a></li> <li><a href="/wiki/Free-to-play" title="Free-to-play">Free-to-play</a></li> <li><a href="/wiki/Freemium" title="Freemium">Freemium</a></li> <li><a href="/wiki/Freeware" title="Freeware">Freeware</a></li> <li><a href="/wiki/Premium_game" class="mw-redirect" title="Premium game">Premium</a></li> <li><a href="/wiki/Shareware" title="Shareware">Shareware</a></li> <li><a href="/wiki/Subscription_business_model" title="Subscription business model">Subscription-based</a> <ul><li><a href="/wiki/Pay-to-play" title="Pay-to-play">Pay-to-play</a></li></ul></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Approaches</th><td class="navbox-list-with-group navbox-list navbox-odd" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Loot_box" title="Loot box">Loot box</a> <ul><li><a href="/wiki/Gacha_game" title="Gacha game"><i>Gacha</i> games</a></li></ul></li> <li><a href="/wiki/Season_pass_(video_games)" title="Season pass (video games)">Season pass</a> <ul><li><a href="/wiki/Battle_pass" title="Battle pass">Battle pass</a></li></ul></li> <li><a href="/wiki/Skin_gambling" title="Skin gambling">Skin gambling‎</a></li></ul> </div></td></tr><tr><th scope="row" class="navbox-group" style="width:1%">Related topics</th><td class="navbox-list-with-group navbox-list navbox-even" style="width:100%;padding:0"><div style="padding:0 0.25em"> <ul><li><a href="/wiki/Advertising_in_video_games" title="Advertising in video games">Advertising in video games</a></li> <li><a href="/wiki/Digital_rights_management" title="Digital rights management">Digital rights management</a></li> <li><a href="/wiki/Intellectual_property_protection_of_video_games" title="Intellectual property protection of video games">IP protection of video games</a></li> <li><a href="/wiki/Video_game_industry" title="Video game industry">Video game industry</a></li></ul> </div></td></tr></tbody></table></div>    </div><noscript><img src="https://login.wikimedia.org/wiki/Special:CentralAutoLogin/start?type=1x1" alt="" width="1" height="1" style="border: none; position: absolute;"></noscript> <div class="printfooter" data-nosnippet="">Retrieved from "<a dir="ltr" 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