E-commerce in the gaming industry

If you talk about attractive industries in e-commerce, it usually comes out of the pistol: Fashion, do-it-yourself or furniture. Of course, these industries affect everyone and are much easier to advertise than the eternal nerd topic of “gaming”. And yes, people are often ridiculed – even by alleged digital natives – for their hobby of “computer gaming”.

It’s worth taking a look at what’s going on in e-commerce within the gaming industry: whether it’s the different business models that have developed over the last few years, the digitalisation of purchasing processes or the entry of big players – the gaming industry is changing and Amazon, Google and Co. also want their piece of the pie… a fact that other industries can sing a song about.

Differentiation of business models

At the latest with the breakthrough of mobile games, terms such as toa teams,  Free2Play, Buy2Play or Freemium are no longer completely foreign words for the majority. However, the gaming industry has not only developed business models for itself, but is also experimenting successfully with ideas of the pay what you want model around and without social control on the part of the seller.

FREE2PLAY & PAY2WIN

Free2Play is basically the free playing of a title. The game is financed by microtransactions of virtual goods, which can be purchased through an in-game currency – which is purchased for real money. Online games and mobile games in particular rely on the Free2Play model. The difficulty that has to be overcome by the game designers is the balance between paying and non-paying customers. If paying customers have an extreme advantage over non-paying players, this is called Pay2Win. In order to avoid this, virtual goods often only give a temporal advantage or serve as a pure optical advantage.

FREEMIUM & BUY2PLAY

Freemium is in a way what the elderly gamer still knows as a demo version. You have free access to certain areas of the game, but you have to pay for the entire game – be it one-time or via subscription fees. Buy2Play is the classic variant: Buy once and play all the time.

PAY WHAT YOU WANT

The Humble Bundle project has made the Pay what you want model particularly popular. So Humble Bundle offers different game packages in time intervals. The smallest package contains up to 5 full price titles. The price is determined by the user – i.e. customer A pays 5 dollars for the games and customer B only 1 dollar. The customer can decide who gets the money: the developers or a charitable organization.

MIXING MOULDS

Current developments in the gaming industry indicate a mixture of the presented business models. For example, there are titles that mix Buy2Play and Microtransactions within the game. On the Steam gaming platform, gamers can also purchase early access games, i.e. early versions of the game. The purchase primarily finances the further development of the projects. In this context, there are also start-up packages or pre-ordered bonuses.

Bye, Bye CD drive

By the way, not only the business models within the games change, but also the purchase of the games themselves. Similar to the music industry, people are slowly moving away from physical data carriers and “only” buy keys or tokens with which computer games can be activated and downloaded on platforms such as Steam, Origin or uPlay.

The last game I bought from Media Markt was Diablo 3 – released in 2012. Buying Keys is simply easier and thanks to a good internet connection, downloading is also a short matter. The most interesting thing is the price drop: While you still pay the full price for a game in stationary stores after weeks, keys can often be purchased from providers such as G2A, Kinguin or MMOGA before the release for significantly less money.

Despite various advantages for the customer, gaming online shops like G2A did not have it easy from the beginning. The founder Bartosz Skwarczek complains that especially in the first years after the foundation (2010) the willingness of Tripla-A developers – the manufacturers of the gaming industry – to cooperate went to zero. However, according to G2A’s own figures, the company now has 250,000 new customers per month. The reason for this is a constant persistence and the goal to offer the customer the best possible online shopping experience.

Also the Big Players are there

While G2A and Kinguin are probably only known to industry insiders, the major e-commerce players are also increasingly looking to the gaming scene. For example, Amazon acquired the streaming portal Twitch for almost a billion US dollars – even for the e-commerce primus no peanuts. Amazon Lumberyard, a runtime environment based on Cryengine, was also released at the beginning of 2016, marking a further step towards the development of its own games. The fact that Amazon can successfully realize media content itself is shown in series such as “Mozart in the Jungle” or “The Man in the High Castle”.

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