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Game-making for profit - Freemium, FIFA and Slot Machine Success

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Gaming is one of the fastest growing industries in the world. Figures indicate that in 2017, interactive entertainment - including games and its encompassing media - generated over $100bn around the world in revenue. As of June 2018, there were reportedly 2,261 active gaming companies in the UK, with approximately 32.4 million consumers purchasing and playing games.

Gaming

The US and Chinese gaming market is larger still. According to research, in 2018 alone China reached $37.9bn in revenue, with North America close behind at $32.7bn. Between consoles, desktop and mobile gaming (as well as cross-platform games that integrate with all of them) the modern gaming industry, as well as the availability of free games, is booming, making it increasingly difficult for companies to turn a profit. So how are the successful companies making it happen?

Who are the developers, creators and game-makers benefiting from this $100bn industry, and how are they achieving it?

Fortnite and the freemium phenomenon

YouTube Viewership over Past 12 months

On July 27th, 2017 the popular shooter game Fortnite was released. Created by American game and software developer Epic Games, Fortnite is a Battle Royale-style game that is free to play.

According to The Guardian, Fortnite has almost singlehandedly grown the company's valuation to $15bn. A cultural phenomenon, Fornite has dominated the gaming industry and made its profit through what's called a 'freemium' model', which is an increasingly popular way to monetise games, software and apps.

For Epic Games, this particular model has proven very successful. Players aren't required to pay to play Fortnite, but instead have the option to purchase an in-game currency called V-Bucks, which they can use to buy accessories, cosmetic skins, pre-released game modes and quirky dances for their character. While V-Buck purchases do not actually improve gameplay performance, the exclusivity of the accessories — which are often only available for limited blocks of time — is appealing to millions of the game's fans around the world. A study observing 1,000 players of Fortnite discovered that nearly 69 percent playing made in-game purchases using V-Bucks — which translates, in US dollars, to an average of $84.67 each.

An article released in The Express in July 2018 revealed over 125m people were playing Fortnite across all platforms. The sheer number of players, and the demand for V-Bucks purchases, is how Epic Games has profited from a freemium model. Fans become engaged with the game for free and make payments as they play.

The success of the game has also relied on its versatility – Fortnite is not just a multiplatform, but cross-platform game. Players can compete live against one another from PlayStation, PC, Mac, Nintendo Switch, X-Box and on iOS and Android systems. As the gaming industry grows, competitors can learn from the Fortnite model – sheer numbers from a freemium model and exclusive in-play purchases have driven engagement for the game and a profit for its makers.

The success of online gambling

2012-2021 Global Games Market

As the video game industry grows, so does the rise of its interactive gaming equivalent – online casinos. It's been reported that by 2020, the online gaming industry will account for more than 70% of the entire gaming industry put together. Much of this industry currently resides in Great Britain. According to the Gambling Commission, the UK had generated £4.7bn gross gambling yield by 2018, and it remains the largest regulated online gambling market in the world that could play an increasingly significant role in the UK economy after Brexit.

Their research shows that it's growing — in a participation survey from December 2017, 18.3% of respondents had gambled online in the past four weeks. Statistics from the same report showed that there were 23-million active accounts in 2017, equating to seven million individual consumers in Britain alone. As with their physical counterparts, many of the gamblers in the online space are choosing to try their luck and they're winning big payouts as a result.

As more casinos went online thanks to enhancements in digital technology, so did slot machines. In the beginning the online slot machine offering was mediocre and suffered from the in-house atmosphere of casinos. Software providers are now competing to develop interactive video slots with exciting bonuses — often themed around TV shows, films and other elements of pop culture.

The '243 way to win' feature is offered on slots such as The Dark Knight Rises, Playboy, Battlestar Galactica and Lord of the Rings slots. Other features include the 'win both ways' bonus (a both way scheme of winning), as well as 'free spins', which is offered on games like Dragon's Myth, Avalon and Game of Thrones slots.

Much more work goes into developing animations, security features and seamless game play. The complexity of the technology means that while playing some online slots, players can choose how much they want to bet per line using touchscreens and share their game play on social media. The appeal of the online slot machine goes further, as you'll find in this post about the secrets of slot machines which serves to illustrate why online slot machines will continue to play a crucial role in the growth of the gaming industry.

Creating more than just a game

When the developers at Take-Two Interactive Rockstar Games released their Western epic Red Dead Redemption 2, it was to instant fanfare. Reports show that during its opening weekend, the game earned Take-Two Interactive and Rockstar Games a total of $725 million. As of October 26 2018, over 23 million copies of the game have been shipped around the world.

There is a reason that thousands of players were riding horseback, virtually, through the Old American West hours after the game's release. According to an article by Fortune, Red Dead Redemption 2 was created by 2,000 developers working over seven years. The game's visual aesthetic, storyline and quality of play created hype and almost guaranteed its instantaneous success. For gaming fans, it was a must-have experience, that everyone — from their friends, to fellow gamers, to the press — was talking about.

However, in the UK chart of game releases, it couldn't beat FIFA 19. The best-selling game of 2018, FIFA19 is the 26th instalment of publisher EA Sports FIFA series. Its marketing line 'More Than Just a Game' is a bid to attract an international audience that includes football and sports fans (and its players) as well as video game enthusiasts — especially those that are young and tech-savvy.

Similar to Red Dead Redemption 2, the success, and profitability, of FIFA19 is a consequence of the game's aesthetic and quality of play. More than just a game, it is a top-class entertainment experience, that appeals to people around the world.

Summary

As the gaming industry continues to grow, so too will the competition between both commercial and independent publishers and developers. Ultimately, achieving a successful profit model is based on understanding, and responding to, consumer demand - whether that's free-to-play games, big win bonuses, impressive graphics or high-quality gaming experiences.

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