Part of a series on the |
Video game industry |
---|
In the video game industry, games as a service (GaaS) represents providing video games or game content on a continuing revenue model, similar to software as a service. Games as a service are ways to monetize video games either after their initial sale, or to support a free-to-play model. Games released under the GaaS model typically receive a long or indefinite stream of monetized new content over time to encourage players to continue paying to support the game. This often leads to games that work under a GaaS model to be called "living games", "live games", or "live service games" since they continually change with these updates.
The idea of games as a service began with the introduction of massively multiplayer online games (MMOs) like RuneScape and World of Warcraft , where the game's subscription model approach assured continued revenues to the developer and publisher to create new content. [1] Over time, new forms of offering continued GaaS revenues have come about. A significant impact on the use of GaaS was the expansion of mobile gaming, which often includes a social element, such as playing or competing with friends, and with players wanting to buy into GaaS to continue to play with friends.
Chinese publisher Tencent was one of the first companies to jump onto this around 2007 and 2008, establishing several different ways to monetize their products as a service to Chinese players, who typically play on a phone or at internet cafés rather than on consoles or computers, and since has become the world's largest video game publisher in terms of revenue. [2] Another influential game establishing games as a service was Team Fortress 2 . To fight against a shrinking player-base, Valve released the first of several free updates in 2008, the "Gold Rush Update" which featured new weapons and cosmetic skins that could be unlocked through in-game achievements. Further updates added similar weapons which starting include monetization options, such as buying virtual keys to open in-game loot boxes. Valve began earning enough from these revenues to transition Team Fortress 2 to a free-to-play title. [3] Valve carried this principle over to Counter-Strike: Global Offensive and to Dota 2 , the latter which was in competition with League of Legends by Riot Games. League of Legends, which had already had a microtransaction model in place, established a constant push of new content on a more frequent basis (in this case, the release of a new hero each week for several years straight) to compete, creating the concept of lifestyle games such as Destiny and Tom Clancy's The Division . [4]
Some examples include:
Games may combine one or more of these forms. A common example are lifestyle games, which provide rotating daily content, which frequently reward the player with in-game currency to buy new equipment (otherwise purchasable with real-world funds), and extended by updates to the overall game. [6] Examples of such lifestyle games include Destiny , Destiny 2 and many MMORPGs like World of Warcraft .
The principal reason that many developers and publishers have adopted GaaS is financial, giving them the ability to capture more revenue from the market than with a single release title (otherwise known as "games as a product"). While not all players will be willing to spend additional money to gain new content, there can be enough demand from a smaller population of players to support the service model. For example, for World of Warcraft, it was estimated on the basis of average revenue per user (ARPU), that only 5% of the game's population paid 20 times more than the baseline ARPU, sufficient to continue ongoing development of the game. [2] GaaS further represents a means by which games can improve their reputation to critics and players by continued improvements over time, using revenues earned from GaaS monetization to support the continued development and to draw in new sales for the product. Titles like Diablo III and Tom Clancy's Rainbow Six Siege are examples of games offering GaaS which initially launched with lukewarm reception but have been improved with continued service improvements. [7]
Games as a service also impacts the development process for games. When developing a game as a product, there is generally a linear flow of tasks to assure that the product shipped is free of software bugs and other problems that may exist, which can be both time-consuming and costly to test for. If there are critical bugs found post-release, this can also be costly to develop, test and distribute software updates to rectify. In developing games as a service, where consumer expectation is already set to expect continual updates to the game, the rigor on software testing in the early stages of release may be forgone as to get the title out to players faster, accepting that software bugs may be present but will be fixed when the next update is released. [8] Further, games developed as a service are more commonly driven by player feedback, so initial iterations of a game's release may be lightweight to be used as a foundation to build upon based on the game's community. This can further shorten the initial development cycle of a game. [8] However, games as a service also increased overall development effort as there are usually two or more concurrent tracks to support a game; one working to support the current available release, and others that are working on the future content that will be added to the game. [8]
While the games as a service model is aimed to extend revenues, the model also aimed to eliminate legal issues related to software licenses, specifically the concept of software ownership versus license. Case law for video games remains unclear whether retail and physical game products qualify as goods or services. If treated as goods, the purchaser gains several rights, in particular those related to the first-sale doctrine, which allows them to resell or trade these games, and which can subsequently affect sales revenue to publishers. The industry has generally considered that physical games are a service, enforced through end-user license agreements (EULAs) to try to limit post-sale activities, but these have generally not been enforceable since they affect consumers' rights, leading to confusion in the area. [9] Instead, by transitioning to games as a service, where there is a clear service being offered, publishers and developers can clearly establish their works as services rather than goods. This further gives publishers more control over the use of the software and what actions users can do through an enforceable EULA, such as preventing class action lawsuits. [9]
GaaS can reduce unauthorized copying. Certain games can also be hosted in a cloud server, eliminating the need for installation in players' computers and consoles. [10]
Industry analysis firm Digital River estimated that by 2016,[ needs update ] 25% of the revenue of games on personal computers results from one form or another of GaaS. The firm argued that this reflects on consumers that want more out of games that are otherwise offered at full price (US$60 at the time of the report) or will look for discounts, thus making the market ripe for post-release monetization. [11] Several major publishers, including Square Enix, Ubisoft and Electronic Arts have identified GaaS as a significant focus of their product lines in 2017, while others like Activision Blizzard and Take-Two Interactive recognize the importance of post-release support of a game to their financial bottom lines. [7] GaaS is also seen as a developing avenue for indie video games, which frequently have a wider potential install base (across computer, consoles, and mobile devices) that they can draw service revenues from. [12]
A study by DFC Intelligence in 2018 found Electronic Arts' value rose from US$4 billion to $33 billion since 2012, while Activision Blizzard saw its value rise from $20 billion to $60 billion in the same period, with both increases attributed in part to the use of the GaaS model in their games catalog. Electronic Arts had earned $2 billion from GaaS transactions in 2018. [13]
Stella Chung, writing for IGN and using MultiVersus as an example, criticized the lack of access when live service games go offline, especially for those who invest money in it. She also pointed out the oversaturation of the market with free-to-play live service games, and that many live service games struggle, leading to them shutting down. [14]
A massively multiplayer online role-playing game (MMORPG) is a video game that combines aspects of a role-playing video game and a massively multiplayer online game.
The history of video games began in the 1950s and 1960s as computer scientists began designing simple games and simulations on minicomputers and mainframes. Spacewar! was developed by Massachusetts Institute of Technology (MIT) student hobbyists in 1962 as one of the first such games on a video display. The first consumer video game hardware was released in the early 1970s. The first home video game console was the Magnavox Odyssey, and the first arcade video games were Computer Space and Pong. After its home console conversions, numerous companies sprang up to capture Pong's success in both the arcade and the home by cloning the game, causing a series of boom and bust cycles due to oversaturation and lack of innovation.
A video game publisher is a company that publishes video games that have been developed either internally by the publisher or externally by a video game developer.
Free-to-play video games are games that give players access to a significant portion of their content without paying or do not require paying to continue playing. Free-to-play is distinct from traditional commercial software, which requires a payment before using the game or service. It is also separate from freeware games, which are entirely costless. Free-to-play's model is sometimes derisively referred to as free-to-start due to not being entirely free. Free to play games have also been widely criticized as "pay-to-win"— that is, that players can generally pay to obtain competitive or power advantages over other players.
A mobile game, or smartphone game, is a video game that is typically played on a mobile phone. The term also refers to all games that are played on any portable device, including from mobile phone, tablet, PDA to handheld game console, portable media player or graphing calculator, with and without network availability. The earliest known game on a mobile phone was a Tetris variant on the Hagenuk MT-2000 device from 1994.
Microtransactions (mtx) are a business model where users can purchase in-game virtual goods with micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers. While microtransactions are a staple of the mobile app market, they are also seen on PC software such as Valve's Steam digital distribution platform, as well as console gaming.
The video game industry in Mainland China currently is one of the major markets for the global video game industry, where more than half a billion people play video games. Revenues from China make up around 25% of nearly US$100 billion video game industry as of 2018, and since 2015 has exceeded the contribution to the global market from the United States. Because of its market size, China has been described as the "Games Industry Capital of the World" and is home to some of the largest video game companies. China has also been a major factor in the growth of esports, both in player talent and in revenue.
The PlayStation Portable system software is the official firmware for the PlayStation Portable (PSP). It uses the XrossMediaBar (XMB) as its user interface, similar to the PlayStation 3 console.
Downloadable content (DLC) is additional content created for an already released video game, distributed through the Internet by the game's publisher. It can either be added for no extra cost or it can be a form of video game monetization, enabling the publisher to gain additional revenue from a title after it has been purchased, often using some type of microtransaction system.
In the video game industry, digital distribution is the process of delivering video game content as digital information, without the exchange or purchase of new physical media such as ROM cartridges, magnetic storage, optical discs and flash memory cards. This process has existed since the early 1980s, but it was only with network advancements in bandwidth capabilities in the early 2000s that digital distribution became more prominent as a method of selling games. Currently, the process is dominated by online distribution over broadband Internet.
The PlayStation 4 system software is the updatable firmware and operating system of the PlayStation 4. The operating system is Orbis OS, based on FreeBSD 9.
This list includes terms used in video games and the video game industry, as well as slang used by players.
"X as a service" is a phrasal template for any business model in which a product use is offered as a subscription-based service rather than as an artifact owned and maintained by the customer. Originating from the software as a service concept that appeared in the 2010s with the advent of cloud computing, the template has expanded to numerous offerings in the field of information technology and beyond it. The term XaaS can mean "anything as a service".
Video game monetization is a type of process that a video game publisher can use to generate revenue from a video game 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.
Buy-to-play (B2P) is a revenue model for video games where a game can be played after a one-time purchase, as opposed to a subscription model where the player must pay a subscription at regular intervals to continue having access to the game. Buy-to-play, while a form of premium games, generally apply to games where there is continued ongoing content or support from the developer or publisher well beyond the period of purchase, such as through maintenance of online servers or through the production of ongoing content and expansions, as often the case in massively multiplayer online games (MMO). This support is monetized through additional microtransactions or through an ongoing subscription fee. Microtransactions are becoming evermore entwined with the Buy-to-play revenue model as most recent games allow for some sort of additional purchase. For example, buy-to-play title Guild Wars 2 allows players to purchase additional in-game items with microtransactions, while Destiny 2 lets users purchase season passes for additional content.
Game Pass is a subscription service as part of Xbox and offered by Microsoft Gaming. Launched on June 1, 2017, the service allows users to download and play video games for Xbox video game consoles or Microsoft Windows PCs from a rotating library, with the games remaining accessible as long as the user has an active subscription. Game Pass subscribers also receive discounts on purchases of games from the service's library and their respective downloadable content (DLC).
In video games, a loot box is a consumable virtual item which can be redeemed to receive a randomised selection of further virtual items, or loot, ranging from simple customization options for a player's avatar or character to game-changing equipment such as weapons and armor. A loot box is typically a form of monetisation, with players either buying the boxes directly or receiving the boxes during play and later buying "keys" with which to redeem them. These systems may also be known as gacha, which is popular in Japan, and may be integrated into gacha games.
Video games can include elements that use blockchain technologies, including cryptocurrencies and non-fungible tokens (NFTs), often as a form of monetization. These elements typically allow players to trade in-game items for cryptocurrency, or represent in-game items with NFTs. A subset of these games are also known as play-to-earn games because they include systems that allow players to earn cryptocurrency through gameplay. Blockchain games have existed since 2017, gaining wider attention from the video game industry in 2021. Several AAA publishers have expressed intent to include this technology in the future. Players, developers, and game companies have criticized the use of blockchain technology in video games for being exploitative, environmentally unsustainable, and unnecessary.
In the video game industry, a battle pass or rewards track is a type of monetization approach that provides additional content for a game usually through a tiered system, rewarding the player with in-game items for playing the game and completing specific challenges. Inspired by the season pass ticketing system and originating with Dota 2 in 2013, the battle pass model gained more use as an alternative to subscription fees and loot boxes beginning in the late 2010s. Battle passes tend to offer free passes, which are available to all users, and premium passes that require annual or seasonal charges in exchange for enhanced items and cosmetics.
The popularisation of mobile games began as early as 1997 with the introduction of Snake preloaded on Nokia feature phones, demonstrating the practicality of games on these devices. Several mobile device manufacturers included preloaded games in the wake of Snake's success. In 1999, the introduction of the i-mode service in Japan allowed a wide variety of more advanced mobile games to be downloaded onto smartphones, though the service was largely limited to Japan. By the early 2000s, the technical specifications of Western handsets had also matured to the point where downloadable applications could be supported, but mainstream adoption continued to be hampered by market fragmentation between different devices, operating environments, and distributors.