video games

video games

1.0 Introduction.

In all decades, video games have shown a high rise in entertainment for diverse people. Publishers of the video games have for so long relied on a dubbed revenue model pay to play (P2P); this is before the advent rise of the internet. Dubbed revenue relies a customer to pay for a single running game. Product retail entails a sum of money for a physical trade, (Osathanunkul, 2015).  Internet introduction to video gamers brought a revolution in the industry. It did not only bring multiplayer via online play mode but provided a platform for publishers to sell their invented games and after sales support. Internet has really helped game publishers. The publishers can now sell digital copies in out of selling their physical copies and development of new revenue models; free to play revenue model (F2P). This model requires one to pay no upfront fee to have a fully functional copy but have an embedment of multiple streams of revenues. This revenue is mostly based on the purchase of consumers of in-game digital content (Osathanunkul, 2015).

League of Legends is on the popular free to play (F2P). The developers of thisgame made it in such a way that developers derive their revenues mainly by selling skin textures for characters and items within the game. In 2016, every month there was a rise in revenue of an average of 100million active League of Legends players (Volk, 2016). That same fiscal year (2016) the game generated $1.7 billion in revenue (Garreffa, 2016).

The industry of gamers has adopted a new model revenue which has been dubbed ‘games as a service’. Big giants publishers such as the Electronics Arts(EA) and Square Enix seems to be accepting and producing games that do function as an on-going process service experience for their consumers (Schreier, 2017a). the transition has elevated the video game industry globally revenue that has reached $100 billion. In 2017, the industry has protected its gross income to approximately $116 billion (Wijman, 2017). Although discussion has led to not officiating definition for ‘ games as service’, generally, the consensus seem to be that such video games offer development of continuity of the video game after the launch of the game.

2.0 Background.

            It all started back in the 70’s and early 80’s. Video game all started when players used big machine like sized refrigerators. These machines were mostly used to be found in big institutions and arcade halls. Monetization was a high demand where a player was required to insert a coin into the machine to play. It was at frequent interval (Kekkonen, 2014).

Arcade games share slight features with the current trendy games with micro transactions. In 2000, there was video game revolution that occurred with better broadband adoption internet and network system available locally. The network adoption allowed video game players to connect multiple computers and play against each other or with each other. Video gamers had a breakthrough through online with players role-playing games (MMORPG) where thousands of gamers could have online interaction through themselves and even compete against each other on one platform. (WoW) World of War craft, a familiar video game to most players became successful after its release in 2004. The game has been designed in such a way that it offers its players to playing a free and fairly- tale virtual world with players. It only requires time and hard work; this enables one to rise over leadership and ranks faster and easier and acquire virtually great wealth in the game.

(WoW) uses P2P and service that is a subscription based; point where video players buy the game itself for a price that’s fixed and monthly fee. Players have the advantage of using real time coins to purchase virtual token and unlock in-game items, sell those tokens in the (WoW) house of auctioneers or they can add 1 month to their game subscription (Kollar, 2015). Playing a video game nowadays is no longer just a niche hobby, but a focal mainstream entertainment (Purcaru, 2014).

2.1 Micro transactions business.

            Basically, micro transactions are simply small virtual items and goods purchased inside a certain game that has already been purchased or acquired for free. The basis of this research will target micro transactions within purchased video games and not acquired for free. Business model is employed by all businesses. The model breaks down value creation architecture, capture and delivery mechanisms that are employed (Teece, 2010). A model will define how the customer needs are responded, how value is delivered and how it encourages customer to pay for that value (Teece, 2010).

2.2 Micro transactions.

It is simply defined as ‘ a very small transaction of finance conducted on an online platform’. In the virtual online games they are defined as in-game virtual goods purchase (Agarwal, 2017).  The referred virtual goods are functional weapons, decorative items; accessories and clothes, content download; unlocking new maps and advantage tactical in-game (Hamari et al., 2017).

3.0 Methods

A qualitative case study will be used or more specifically an explanatory (Baxter & Jack, 2008). It will be imperative to understand the perspectives of the communication. A qualitative study will be used in seeking to explore a phenomenon in context using data sources variety. As cited in Baxter & Jack, 2008, this research will be used to seek “… to answer a question that is explaining presumed links interventions in life that has complexity for the research or experimental strategies”. A few methods will be used to gather information for the results.

3.1 Video game reviews.

There are many video game critics on the internet. A few chosen selected reviews will be collected to explore the critical reception of the virtual games.

3.2 Interviews

Interviewed will be taken with critic who has experience in virtual games. Professional developers that work on monetizing video games will be interviewed. Both interviews will be semi-structured interviews in person. Semi-structured are non- standardized, with questions that can be reordered and differently worded but depending on the situation and the possibility to ask for a follow-up questions.

3.3 Forum discussions

Based on video game forums there are a lot of comments based on the games and micro transactions in general. A few chosen comments will be selected on different forum platforms on loot boxes and on micro transactions.

References

$60 in 2006 → 2016 | Inflation Calculator. (n.d.). Retrieved from http://www.in2013dollars.com/2006-dollars-in-2016?amount=60

5575685. (2017, October 10). Re: With all the controversy over them lately, I’d like to praise Overwatch for doing loot boxes right [Online forum comment]. Retrieved from https://www.reddit.com/r/Overwatch/comments/75dhc4/with_all_the_controversy_ov er_them_lately_id_like/

Admiral_Petty. (2017, November 11). Re: It Takes 40 hours to Unlock a Hero. Spreadsheet and Galactic Assault Statistics [Online forum comment]. Retrieved from https://www.reddit.com/r/StarWarsBattlefront/comments/7c6bjm/it_takes_40_hours_t o_unlock_a_hero_spreadsheet/

Agarwal, P. (2017, November 19). The Economics of Microtransactions in Video Games [Blog post]. Retrieved from https://www.intelligenteconomist.com/economics-ofmicrotransactions/

Alexandra, H. (2017, November 17). Star Wars: Battlefront II: The Kotaku Review. Retrieved from https://kotaku.com/star-wars-battlefront-ii-the-kotaku-review1820477183

anduin1. (2016, May 25). Re: Overwatch – Review Thread [Online forum comment]. Retrieved from https://www.reddit.com/r/Games/comments/4kysym/overwatch_review_thread/

Artz, B., & Kitcheos, A. (2016). Microtransactions: A Study of Consumer Behavior and Virtual Goods/Services Among Students at Linköping University in Sweden. Retrieved from http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-129603