The Monetization of Video Games

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Video Gaming is one of the world’s favorite pass times. Kids and adults alike can be transported to these magical worlds, where anything is a possibility. Video games are the next frontier of Mass Media as television slows. With companies making billions of dollars a year, and greedy business models. The Video game industry has branched very from its humble beginnings. The first game created. An extremely simple tennis like simulation, Utilizing just one ball and one player-operated “paddle” to hit the ball back. Created in October of 1958 by physicist William Higinbotham and presented at the Brookhaven National Laboratory open house, being played on an oscilloscope screen. (APS-NEWS, 2022)

This was only the beginning. The next few years lead to video games taking off, arcades became more predominant and video games were starting to be appreciated by the masses. Through in the 70s and 80s video games began to have a run. Some even call the 80s the “Golden age of video games.” And it’s a well-earned title, this period introduced us to some of our all-time favorites. Space Invaders in 78’, PacMan in 80’, Donkey Kong, and the introduction to Mario in 81’. (History.com, 2017) All titles that have made an ever-lasting impact on the gaming industry. 

Over the next 20 years, video game technology was able to reach a point of endless evolution. There comes a point in any new technologies life that decides where the technology will be headed. For video games, this point was decided with what I will refer to as personal game consoles. Up until the late 80s many people would go to arcades to play their games, wealthier families had Odysseys or NES systems but they weren’t prominent. From this period stemmed impactful developments, that allowed us to reach where we are today in gaming. With the creation of the game boy in 89’, The Sega in 95’, the N64 in 96’, and Sony’s fame-stealing release of the PlayStation in 1994. (History.com, 2017) Video games were now sitting in living rooms world wide. With Sony dominating for many years after. Credited to their use of 3-dimensional worlds and more advanced shapes for setting and character design. (Cantees, 2021) Continuing to dominate with the PlayStation 2 released in 1999, combated by Microsoft’s Xbox and Nintendo’s Game cube. (History.com, 2017) The grandparents of the modern video game industry. 

In the years after 2000 video gaming along with all other technology progressed at an unprecedented pace. Now video game consoles play games with ultra-high graphics, minimize loading screens, and boy are they expensive. Though what’s astonishing about video games is the vast adoption of these technologies. In 2020 there were over 2.69 Billion gamers worldwide. (Gilbert, 2022) Further, the number of people who still choose console gaming consoles is astonishing. With 1 in 5 global consumers having access to a gaming console, higher than comparable home entertainment like own PCs(14%), DVD players(15%), And home audio systems(16%). (YouGov, 2022) 

Today, video game production has seemed too have reached a point of success only paralleled by that of the movie industry. Video games have big actors, record-selling releases, millions of die-hard fans, and you can’t forget the multimillion-dollar budgets. In fact, some of the most expensive games cost over $100 million dollars to produce. Halo 2 Costs $120m, Call of Duty Modern Warfare costs $200m, and the most expensive video game produced GTA V costing $265 million dollars to produce. (Valente, 2020) Though these expenses do pay off on anticipated titles, GTA V for example makes over $15k dollars every 10 minutes and already made over $9 billion dollars to date. (Banerjee, 2022) While the most recent call of duty release, Ironically named Modern Warfare 2 as well. Bringing in more than $800 million dollars in the first weekend of release. It’s largest since the release of MW3 in 2011. (Plant, 2020 IGN) Though these crafty firms have been able to capitalize even further on their successful projects. The company best known for this has become Epic Games, the Creator of Fortnite.  The first way in which the firm drained more money from their consumers, is through game purchases. Transactions selling in-game items, bonuses, and even Virtual Currency. The most prominent example we’ve seen in recent times happens to be Fortnite.

While Fortnite was released as a “free to play” game, many things were locked behind paywalls or high-level requirements. OR. You could pay a little real money in exchange for these digital items, a win-win transaction. Though Epic Games was the true winner. Fortnite having been able to generate over $1 billion dollars from in-game purchases alone. (Valentine, 2018) 

Though it doesn’t end there. An unexpected and crucial part of the success of these games. Partnerships and steaming. In fact in a 2019 survey on people aged 16-24 results found that 44% of this group watched video game live streams online. And in 2020 1.2 billion people were recorded as watching video games online. (Yahoo, 2022) Though Fortnite remains a doozy. Making money at every turn. Added Marvel Character or John Wick. Having in-game live concerts from Marshmello or Travis Scott. These firms are able to make money at every turn, becoming power figure within the online world and making claim to every teenager. The recipe is simple. And man do they know how to cook.

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