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Quiz Society SRCC

The New Era of Gaming

“Changes call for innovation, and innovation leads to progress”~ Li Keqiang.

Despite the widespread economic disruption due to the Covid-19 Pandemic, the global gaming industry is thriving through innovation. In the age of social distancing where all business and consumer activities have minimized, gaming has provided people with an engaging distraction and a way to seek social interaction. The gaming industry has been able to perform remarkably well during this period of work from home. One of the major reasons for such an exponential growth of the industry is the change in the business model from selling games “as a product” to selling games “as a service”.

This new trend is transforming the industry to make it much more lucrative and profitable. So the question is, how are games being sold as a service? In this practice, the publishers are not just developing a game and selling it for a single revenue generating fee, instead they are monetizing the games using different building mechanisms to keep players playing as well as paying for as long as possible. This expands a game’s lifespan making it more of a service. There are several examples of such a practice such as the sport franchise titles of EA. EA has Fifa points and similar currencies in its games like Fifa and Madden which can be bought separately after buying the game as in-game purchases. Such currencies can be used for the Ultimate Team platform that it has made and therefore, it generates revenue on a continuous basis. According to their financial reports, EA has reported record numbers in the year 2020. Across all sports franchise titles, including FIFA and Madden, EA generated a total of $1.49 billion through the Ultimate Team platform. And this amount is on top of the $60 or Rs.4000 which is the price of buying these games. Such a practice has not only helped to generate such revenues but has also helped in keeping a stable and consistent player base for a longer period.

There are other ways to implement this practice as well which is the way that games like Apex Legends and Fortnite do. These games also use in-game purchases or microtransactions for a continuous generation of revenue like Season Pass which is an amount that can be paid to receive skins, accessories, etc in the game for a specified period. But what is different is that the publishers have made these games “Free to Play”. What that means is that there is no price for buying the game and it can be played by anyone without paying anything. That is one of the main reasons why these games are incredibly popular and their player base is vast and expanding. Anyone can hop on and try the game and if interested, they can spend money on the in-game purchases. In the game's first month of release, Apex Legends reportedly made over $90 million from in-game spending across all platforms. The majority of the revenue came from console gamers. While Epic games, the developer of Fortnite, made $400 million in revenue from in game purchases in April of 2020 alone due to the pandemic.

But these games were majorly focused on multiplayer and making a service is relatively easier when compared to linear story driven games. But even games like GTA 5 which is linear story driven open world game, its developer, Rockstar, introduced a multiplayer feature which gained immense popularity as well and has had a consistently high player base for over 7 years. GTA 5 is third on the list of the best-selling video games of all time, only behind Minecraft and Tetris. Reports from Business Insider suggest that Rockstar Games made upwards of $6 billion from GTA 5 which includes both the sale of the game and the microtransactions. Therefore this new trend has made the industry much more profitable.

These games were just sold as a service individually but now Microsoft has introduced an even larger scale of selling games as a service which is very consumer friendly. Microsoft introduced Xbox Game Pass which is a subscription based service that makes playing games similar to using Netflix. It is a service that gives Xbox players access to a huge and diverse library of over 100 high quality games to download and play for as long as they continue to pay for the service. Currently the subscription price is about Rs.500 per month. This service is not only lucrative for Microsoft but also offers many benefits to the players like the huge collection of games which will keep on increasing as new games come out, exclusive discounts and deals, free perks including in game content and other offers. The popularity of this service by Microsoft has made such an impact that Sony is already in the works to make something similar. In an interview with TASS, the CEO of Sony Interactive Entertainment, Jim Ryan, was asked how Playstation will respond to the Xbox Game Pass. While not giving away exactly what it will be, he said that, "There is actually news to come, but not today".

Cloud gaming is also a trend that is coming up as the future of this industry where there would be no requirement for any complex hardware. It’s a technology that will change the way we look at gaming since it will allow players to access any high-end gaming title with just a basic machine. The only major requirement would be a stable internet connection. This concept is already catching up in some developed countries like the UK and is expected to be introduced in India as well in the upcoming years. It is a method of playing video games using remote servers in data centers, so there would be no need to download or install games on a PC or console. Instead, these games would be streamed to an app or browser installed on the recipient device. There are already some cloud gaming platforms present like Nvidia, GeForce Now, PlayStation Now, Jump, Google Stadia, etc. and similar platforms are expected to come in India as well.

In Conclusion, it is evident that there is a huge scope of innovation and growth in the Gaming Industry and new technologies and ideas like cloud gaming and gaming services are the future of the industry. With the successful launch of the new consoles and gaming services in India, the market for the industry is vast here.


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