Anson Wong

What are the different monetization models that work in the video game industry? How are they applied successfully?

Started Mar. 7, 2024

Abstract or project description

This paper analyzes the diverse business models prevalent in the growing video game industry and the examples of how video games successfully apply them across different genres and platforms. By performing reviews of industry data through Statista, examples of successful games like Marvel Snap, comparing and contrasting models across genres, and a dive into the recent trend of the battle pass. We investigate how free-to-play, pay-to-play, and subscription models work, and specific applications in games. We found that free-to-play with its various microtransactions and battle passes is the dominating monetization method for mobile game developers. The top 20 most successful mobile games are all free-to-play. This model is particularly effective for player-versus-player games and those with lower initial development costs compared to story-driven titles. The battle pass is popular because of its consistency, value, and flexibility. There is little discourse around this compared to lootbox mechanics, especially lootbox mechanics in pay-to-play games. Pay-to-play is successful especially for story-based games, and remains popular for PC and console games. The choice of monetization model significantly impacts a game’s success, influencing player engagement, revenue generation, and long-term sustainability.