Cloud gaming monetization continues to evolve

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Cloud gaming technology There is great potential for upheaval Video game monetization model established.. It is completely similar to established streaming models, such as the music and video on demand (VOD) industry. The story shows how Spotify changed the way Spotify listens to music on freemium and premium models, but Netflix has done the same with VOD. Cloud gaming providers are embarking on a perfect business model that will keep gamers happy while saving resources.

With that in mind, find out how leading players and creative cloud gaming tech start-ups are making money right now to determine their best business model.

Open new sources of revenue for publishers

While hardcore gamers often buy games on Steam or Epic for a fixed price and can afford to pay for expensive hardware, most gamers (casual and intermediate) play hundreds of gigabytes of games on their PCs and consoles. . Or hesitate to download to your smartphone.

On the flip side, hundreds of millions of casual and middle-of-the-road gamers don’t want to pay for hardware or buy games. Most publishers are already taking advantage of the new revenue streams offered by cloud gaming, especially in untapped markets. They understand how this innovative, hardware-independent, out-of-the-box solution attracts new customers. They understand that cloud gaming is a new opportunity to improve the monetization of video game content, without tackling traditional sales.

By licensing branded content to cloud gaming companies, publishers can publish it to a much wider audience. Many of your spectators do not normally play the game. There is certainly a desire for this. Recent research It is clear that 80% of current game subscribers accept multiple game subscriptions. And with subscription offerings that include titles that cater to the tastes and abilities of both casual and full-fledged gamers, the most innovative publishers quickly compare to the stellar success seen in the VOD market, like Disney Plus. We are already exploring the creation of cloud gaming solutions. , Netflix, Amazon Prime, Apple + and HBO Max.

Subscription model

Above: Xbox Game Pass is Microsoft’s game subscription service.

Image Credit: Microsoft

Video game fans are ready for the subscription model they already use for music and video content. In these two industries, it was initially difficult for IP owners to switch from the traditional business model (formerly a music CD or DVD that sold for around $ 20 each) to a subscription model of pennies per user. . has been. On a much larger scale. The change has dramatically changed these two industries, but the overall size of the market has grown and the value of majors has never been higher.

Video game publishers are in exactly the same situation as music publishers 15 years ago and are interested in a continuous and stable source of revenue. With the incredible amount of data cloud gaming services collect, they can also gain more insight into fan usage and expectations.

We also believe in a future prosumer approach that will allow game fans to not only sign up for cloud gaming services that feature their favorite games, but also connect with their favorite development team.

Self-published cloud game monetization model

Above: Uplay + is Ubisoft’s game subscription service.

Image credit: Ubisoft

Publishers are starting to realize that cloud gaming provides easy access to key segments of the fanbase with limited IT resources, or segments that don’t normally invest in hardware like PCs and consoles. . .. More and more publisher partners are exploring cloud gaming strategies to reach new untapped viewers, creating new lines of direct communication and engagement with their fans.

It is still an early model, but it is slowly but steadily gaining momentum. Looking at the world of VOD, the success of Disney + is testament to its ability to create almost successful dedicated channels. 104 million subscribers 18 months after its release. There are few reasons why gaming brands have failed to achieve similar success by building their own cloud gaming channels.

Ubisoft is an example of a leading global publisher questioning its own cloud gaming strategy. This “more inspired” Ubisoft Uplay + The cloud gaming solution will be available through the Amazon Luna and Google Stadia platforms, but its beta service will provide access to a select range of Ubisoft games on platforms such as PCs, laptops, mobiles and smart TVs. is.

Advertising model

Some service providers are working on cloud gaming advertising, despite their current low usage. For example, the retro gaming cloud platform Antstream introduced a free-to-play hierarchy earlier this year to improve its paid plans.

Looking ahead, there are a few early AdTech in-game advertising solutions. These are transparent ads that don’t disrupt the gaming experience, provide discreet in-game ads, and potentially monetize your gaming experience by. cloud. One of the pioneers of in-play advertising, Admix uses rendering technology to digitally inject digital advertising creations into the 3D world without affecting game performance. Brands and advertisers are at scale.

Tappx is another AI powered solution. Contextualize itIn theory, this could allow publishers, brands and advertisers to contextually analyze large amounts of audiovisual content, such as that found in video games. However, this model is boring for gamers even though it is free.

While the advertising model has seen impressive success in other streaming industries, its adaptation by the cloud gaming industry to provide “free play” services is a long list of legal and business challenges. Turned out to be difficult. And most importantly, adoption by the general public has not been proven at this stage.

Microtransaction model

Mercenaries are in a new mode of Hearthstone.

Above: Mercenaries are in a new mode in Hearthstone.

Image Credit: Blizzard

When it comes to making money in games, microtransactions are an important part of the puzzle. Developers are actively seeking cash. For example, Blizzard Entertainment $ 1.2 billion From 2020 microtransactions.

For enthusiastic gamers, there are several microtransactions that must be done within the virtual economy to truly be successful in the game. Without them, it is impossible to stand out from the crowd or even compete with the best.

Well-informed cloud gaming providers take advantage of this sentiment by offering in-game virtual currencies that can be used to change the gaming experience. Depending on the game in question, that currency can be used to improve performance (purchase of games). ‘competitive perks / abilities) or appearance changes (premium skins, characters, weapons). For a service provider who is also a game publisher, there can no longer be a cash cow. Users can exchange real money for virtual currency. Cryptocurrencies can be used in native gaming microtransactions.

Conclusion

It’s a well-known fact that the cloud gaming ecosystem is booming. There’s a lot going on about un-deciphered monetization, but these models, or their combinations, have been shown to be effective in generating revenue and dramatically increasing customer loyalty. .. We can say that cloud gaming is still in its infancy and is in the process of maturity. However, there is one thing that is clear. It’s a major turning point in cloud gaming, providing agile tech companies with a great opportunity to take advantage of this exciting new wave of technology.

With 25 years of experience in video and technical games, Ivan founded Gamestream to democratize the enjoyment of video games for all thanks to the power of cloud gaming.

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