Video games first appeared in the second half of the 20th century with very few examples and very simple mechanics. The games were played in arcades until the first home console was released in 1972.

space invaders(1978)

Since then, video games have kept pace with the ever-evolving technology and became more sophisticated. Today, it is possible to encounter video games on many different platforms such as computers, mobile phones and tablets. 

Some describe video games as just a waste of time, while others define video games as the 8th art. The most important criterion here is the art of cinema. The main reason why video games are accepted as the 8th art is that cinema is accepted as art. Video games may also be considered as an upper art model to the cinema because it contains all the dynamics of cinema and adds interactivity as a new characteristic.

According to SuperData 2018 Year in Review(Nıelsen Company) Games and related media earned $119.6B in 2018.  The total revenue from digital games is $ 109 billion, while the revenue from interactive media(gaming video content, cross-reality) is $ 11 billion. ‘Digital games’ is divided into 3 sub-categories: Mobile games, PC games and console games. The mobile game category with $ 60 billion, has the highest revenue share among those categories, while PC games have a revenue share of $ 35 billion. Console games have the least amount of share with $ 12 billion. 

Pricing Strategies

A)Micro-transactions

“Micro-transaction is a term that applies to small value financial transactions that happen within digital games and apps. These transactions are usually under about $10 and frequently involve the sale of in-app or in-game virtual good or digital content. The simplest form of micro-transactions within an app is through a store in which users can purchase a virtual good by sharing their credit card information. In many cases, this transaction is a purchase of virtual currency (gold coins or something like that) which can then be used to acquire goods or premium content.”(www.superrewards.com/micro-transaction) “Micro transactions are most popular in mobile games such as ‘Candy Crush’, ‘Dead Trigger’ and ‘Clash of Clans’. A study in 2013 found that over 90% of all revenue generated by iPhone and Android app stores came from free-to-play games with micro-transactions.”(Brian Lloyd, www.entertainment.ie)  

B) One time payment(pay-to-play)

Once, this was the common pricing strategy. Most games are sold once at a retail location, or ordered through a website, the pricing strategy behind this is borrowed from book publishing, and it’s hundreds of years old.(Tom Hunter, Gamasutra.com, 2005) Most of the console games still use this way of pricing but they also include micro-transactions.

 C) Subscription(monthly or annual payments) 

A subscription-based pricing model is a payment structure that allows a customer or organization to purchase or subscribe to a vendor’s IT services for a specific period of time for a set price. Subscribers typically commit to the services on a monthly or annual basis. (searchcloudcomputing.techtarget.com, 2015) World Of Warcraft, a very popular -massively multiplayer online role-playing- game developed by Blizzard Entertainment, Inc is a significant example of this pricing model.

D) DLC(Downloadable content)

The difference between DLC and Micro-transaction can often be confusing. The term DLC refers to a content that needs to be downloaded to play, micro-transaction refers to a payment system which might not need a process of downloading. While, DLC expands the content which has a certain effect on game-play, micro-transactions mainly affect the cosmetics.  

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