Making games is an art, and it should be profitable. Money has become a measure of success in many industries, including the industry of video games. At the same time, putting too much effort into getting revenue can spoil the playing experience; art should be the foremost priority, with business second.
Throughout the years, game development companies have tried out various monetization schemes for their products. One of them is adding virtual items and selling them for real-world money. Such a strategy has proved its effectiveness and created a huge area of the virtual economy.
Why Do Games Require an Economy?
A decent revenue from a gaming project brings the satisfaction of making something right, and also, it’s the possibility to move forward and create even better products. The traditional scheme of selling a complete gaming experience for a specific price is still one of the best for both developers and players. Companies offer a full-fledged product, and customers know perfectly well what they are paying for.
A problem arises with games as a service. Their production is not closed after the release; it’s just the start of a long process. It depends on the chosen monetization scheme on how successful this process will be.
Gamers want new content now and then to make their multiplayer matches enjoyable again and again. Delivering this content is a huge amount of work. How do businesses make it possible? The initial money from selling the product covers the production stage. Only regular income can make a game as a service living and breathing for many years to come.
Here the video game economics become crucial. They should be interwoven with the art of creating games to make the whole miracle possible. Big games released on all the popular platforms need their own virtual economy. The same is true even for rather small but ambitious projects, which want to show themselves in among their multiple competitors.
Sustainable Virtual Economy with In-Game Items
Of course, adding virtual items to a game is not the only method to support its economy and allow the product to exist for many years. For instance, other methods are:
- Paid DLCs. Providing players with a fresh portion of downloadable content and charging a reasonable amount of money is an effective method to build a video game economy.
- Monthly subscription payment. Players may get access to some special modes, locations, or specific advantages for just a few bucks regularly.
- In-game advertisements. Interrupting the playing process to show ads is a method for small and medium-sized games, usually on the mobile market (Subway Surfers).
So, why do you need in-game items? In which aspects is this monetization method is better?
In fact, virtual items do not contradict the mentioned methods but complement the game economy with them.
- In-game items may be a part of paid DLCs and give players additional motivation to purchase such updates.
- Developers may include nice in-game items in the benefits from monthly subscriptions. Many successful companies do this, making limited edition collectibles prizes in time-limited events (Fortnite, Apex Legends).
- Items may become an additional reward for watching advertisements. It’s nice to give players a choice: to watch or skip ads. Many people choose to watch not only to support the developers but also to get something in return. In-game items are quite significant for players.
To sell or give for free?
It’s not a big deal to add virtual items to a game. It’s much harder to do this properly, without ruining the whole playing experience. Businesspeople who think only about money risk losing their business. Customers should come first. Without them, nothing is possible. In the area of the game industry, those customers are players.
And players want to have fun in a game. They are not ready to pay for unnecessary items. But they are ready to pay if those items give additional fun in one way or another.
The question “to sell or not to sell” becomes secondary for good games with a virtual economy. The primary one: what do the players get?
Some developers choose a seemingly effective way of giving more practical value to their items. Like, “you can get this sword only in our store, and it’s twice as powerful as the standard sword.” (cue an annoying “ding” and someone yelling “Wrong!”) This is not a good idea, and some companies have proven this. (EA with their Star Wars Battlefront II, for example.)
Players are ready to have some advantages over others, but they can’t accept if someone has advantages over them because of having more money to invest in their gaming entertainment. Such a strategy for virtual economy games with items leads to the death of gaming projects.
Another strategy seems to be odd. Nevertheless, it is super effective. In-game items should be strictly cosmetic, with no direct influence on the playing process. “Who needs them?” Gamers do, in fact, need cosmetic items. They are:
- Proof of skills, because you can get them mostly from special achievements or after spending many hours in the game and playing successfully all that time.
- Proof of involvement in the game and the community. Virtual items become a kind of special attribute, like diamonds in some layers of society.
- A way to express your style and personality. Multiplayer games are often a powerful social experience, and beautiful skins become equally important as fashionable clothes.
So, it’s time to return to the initial question – “To sell or give for free?”
Direct sales are not popular in existing products and among players. In-game items should become part of the playing process, part of the gameplay. Even if developers charge for them, they usually do this in a multi-step way: buy our diamonds, choose an item.
Virtual items often become the basis for the gambling-like system of loot-boxes. Players purchase not a particular item but rather a case with various assets and different chances of their drop. Like other types of gambling, this one is addictive for players: “The next case will definitely bring me that super rare and expensive thing.” Still, the moral aspect of adding such a mechanic into the virtual economics of video games causes lots of arguments. That’s up to developers whether to build such an economic model around their products or not.
The Best Game Economies with Virtual Items
Let’s take a look at some practical examples of successful implementations of economies with in-game items. These are not examples of games but rather schemes:
- Fortnite is a free-to-play game that sells cosmetic items to players. Some of them are available only after purchasing the Season Pass and completing special tasks. The game earns lots of money on assets that have no influence on the gameplay. Fortnite skins even build an internal hierarchy in the community; that’s how popular and important they are.
- Pokemon Go is a free-to-play mobile game that sells practical in-game assets. They give substantial revenue for the developers too. This is a typical example of mobile game monetization, where you can play without purchasing items, but with them, your progress will be faster. Some developers ruin this scheme by becoming too greedy and making playing without paying an annoyingly slow and limited.
- Dota 2 gives cosmetic items that change the appearance of weapons and heroes. This usage of in-game items is interesting because of the possibility of players to exchange and trade them. This feature allows the economy to come beyond the game itself and create specialized marketplaces. The International is the main tournament of Dota 2 with the biggest prize pool in esports (more than $34 Mln in 2019), and the money comes from special Battle Passes. Cosmetic items are part of this offer.
Let people trade
One of the most innovative features in the economy of in-game items is providing players with the possibility to trade things from their inventories. It may be a kind of scary moment for the developers because the secondary market means people will not always buy directly from the company. Also, it’s quite scary to allow third-party services to exist for trading items outside the game. Still, some brave companies have taken this step, and they have succeeded immensely, like Valve, the developer of Dota 2.
Another product of this corporation is an even better example: Counter-Strike: Global Offensive. This game contains some of the most expensive cosmetic items in the industry. The price of the unique AWP Dragon Lore reaches $61,000(!).
The main benefit of developers from allowing trades and exchanges is the boost of interest to their product from the gaming community. People become so thrilled by the possibility to sell virtual items for real money (for example, through such services as DMarket) that they invest much more time and energy into a particular game. The possibility to just buy those amazing skins without spending lots of hours with uncertain results attracts another type of players: those who want to look cool and are ready to pay for this. As a result of adding cosmetic items and making them tradeable, CS:GO has remained one of the most popular games in the world for quite a few years already.
The virtual economy in games with real money can take various shapes, but if the developers keep their greediness out of business, they will benefit from such an addition to their products. Also, it’s nice to make getting in-game items a part of the playing process, not only an offer in the internal store.
Virtual items help developers to make and support great games. Still, they should be made for gamers to enjoy; this is a thought to keep in mind while developing a game economy with items.