The term monetization in gaming refers to the many different ways the companies that make console video games generate revenue. There are several different monetization models used by most game development studios today, and the most traditional is when players spend money, typically a set price per game, to download and install those titles onto their preferred console. Here is a closer look at the main monetization models commonly used by developers to bring in money from gamers and how these models have evolved over the years.
What are the main monetization models used by developers in their console games?
The video gaming industry is constantly evolving, and the companies that make digital gaming content for the global entertainment sector are always looking for innovative new ways to generate revenue. As mentioned, the most traditional monetization model still used by game developers today to generate a significant portion of their revenue is via the actual purchase of their games. Back in the day, the only way these companies could make one was by selling physical copies of their games in a land-based gaming store.
Today, things have completely changed, and any game development company can sell its content online and make money using several other monetization models. However, the primary way these companies make money is still each time a player decides to spend money on downloading and installing their favorite titles onto their preferred console, whether it’s an Xbox Series S/X (Microsoft) or PlayStation 4/5 (Sony).
Each video game has a set price, although it may vary slightly depending on the region. There are six monetization models that game developers commonly use to generate revenue, and while some developers rely on just one of these models, others use several to boost earnings.
The main video gaming monetization models commonly used by companies today include the following:
- Premium or subscription model – where players can pay a one-off/one-time fee to gain access to one game or a rolling subscription fee (per month or year) to gain access to entire libraries
- In-game advertising model – there are countless in-game advertising options for companies who pay developers enormous amounts of money to display their brands via ads
- In-game purchases model – also known as “purchasables” and consumables, where players can download/install games for free but spend money on additional features and content while playing
- Sponsorship model – where companies pay significant sums to sponsor game developers and have their brands featured in the console games
The main in-game advertising strategies include banner ads, interstitial ads, playable ads, integrated ads, and rewarded video ads. The most profitable way for developers to maximize their revenue stream is to combine as many monetization models as possible.
Will companies that make video consoles and games ever team up with iGaming operators to tap into a new source of revenue?
These entities are always looking for new, untapped avenues to explore so that they can get that edge on the competition. One of the other potential revenue streams for companies like Microsoft and Sony is to team up with leading iGaming operators to bring sports betting and casino apps to consoles. After all, iGaming represents one of the most profitable ‘limbs’ of the gaming sector, with billions of dollars up for grabs – provided you can stand out from other developers and brands.
In other words, the next-generation consoles could very well feature applications that allow users who are of legal age in their country to place sports bets and play thousands of computer-generated and live dealer online casino games. iGaming is a global multi-billion-dollar industry that would reach new audiences and grow exponentially if we started seeing leading betting and casino apps arriving on traditional gaming consoles. Market-leading companies would pay millions for their sports betting and casino apps to be available on video gaming consoles, but is there a demand for this right now?
What types of casino games can I play on consoles?
The only casino games people can play in console games today are the mini-games that can be found in several blockbuster titles, such as Red Dead Redemption 2 (RDR2) and Grand Theft Auto V. However, instead of playing online slot machines, poker, blackjack, and roulette using real money, players use in-game currency that has no monetary value in the real world. Adding these casino simulation mini games into today’s hit titles (which are all typically PEGI-18-rated) increases player enjoyment and adds a new dimension to gaming from a console.
Besides RDR2 and GTA V, some of the other hit video games that also feature casino simulation games include the following:
- Far Cry 3
- Hard West II
- The Witcher 3: Wild Hunt
- Dragon Quest 11
- Tales of Vesperia
- Yakuza Kiwami
- Watch Dogs
It might never happen, but some experts have already predicted that it won’t be long before we see major iGaming companies’ apps arriving on consoles.
Final thoughts
Over the coming years, we will likely see many new monetization models arriving as the gaming and iGaming industries rapidly evolve and forward-thinking companies develop new ideas to generate revenue to get their brands promoted.
Virtual reality (VR) will no doubt play a significant role in the monetization of future games, and it will be interesting to see which other new innovations, trends, and technologies will take the monetization of console games to the next level.
