Does the name ‘Super Mario’ ring a bell? Probably, it’s a game you’ve known for many years. It features two brothers, Mario and Luigi, who are on a mission to save Princess Peach. Currently, many are enjoying it online on gaming consoles. However, when it was first released in 1981, people had to buy it in video stores. They would play it for several days or weeks and after completing the challenge, one had to wait until the next level was produced. In the meantime, all that was left is to repeat the game. Sounds boring, right?
Thanks to technological advancements, gaming has experienced rapid growth. Instead of purchasing games in stores, enthusiasts go online for real-time action. Young people spend hours on the screen trying to complete levels or defeat competitors. Nowadays, gamers have more exciting challenges and features, therefore, improving user experience.
Developers are also cashing in billions annually. For example, EA games have earned over $30 billion since it introduced GaaS. Analysts say that gaming companies will continue having increased market value as more individuals move to online gaming. And of course, where there are many people, who else are we likely to find? Marketers. They also want a share of the screen time. As the game loads, players are entertained by short videos. This method of product promotion is effective because people’s attention is easily captured.
If you are wondering what GaaS is, how it works and its effect on the industry, you are on the right page. We will discuss these points and hopefully, you’ll understand what they are all about.
Meaning of GaaS
Games as a service (GaaS) is the provision of video games online. Instead of gaming companies depending only on initial purchase sales, they can continue earning revenue by monetizing the games. This model is similar to SaaS (Software as a service) where developers receive money as long as users are on the applications.
The games are streamed, hence the name ‘live games’ Gamers are hooked as their characters navigate dangerous terrains when on a mission. When they want to move to the next level, they have to make purchases. Money might also be needed to upgrade or unlock new features. Enthusiasts easily make payments so that their fun remains uninterrupted. Besides, who wants a lag at the peak of the game because of having an outdated version? As players are seeking a better gaming experience, gaming companies are all smiles since that means more money in their accounts.
Popular games include Destiny, Overwatch, Fortnite, just to mention a few.
How gaming companies earn revenue
The GaaS model is aimed at helping developers have a continuous stream of income as long as gamers are logged in. They have unique billing systems which have ultimately changed the industry. They vary across different games but offer accessibility to whichever services gamers are looking for. Below are monetization methods.
Selling In-App features
When in the app stores, you are quick to download free games. However, as you continue playing, you will realize that you can only get new players or features after making purchases. Since winning is your goal, you purchase the desired character. The more the products are sold, the more developers earn. These profits motivate them to improve their gaming sites to a higher quality. These upgrades are intended to attract more gamers and retain loyals. In some games, players buy their desired items using their earned rewards like points, gold coins or tokens.
Microtransaction is another avenue of in-game purchases. As the name suggests, players only require a small amount to access more features. It may be the fastest car or a stronger character. It may only be $ 1 but if 20 million gamers worldwide make the purchase, how much does the company earn in total? A significant amount, don’t you agree?
In this model, players gain access to their favorite games after paying a certain amount. The pay-to-play rule applies. Payment recurs every month for gamers to continue enjoying the services. Extra costs may be incurred for more features if the subscription price was exclusive of them. Popular games include Wizard101 and World of Warcraft.
Marketers target popular sites that customers visit. When millions are gaming online, they often have adverts popping on their screen. In-game advertising generates revenue for developers since companies want to promote their goods and services to as many people as possible. Most adverts short, creative and appealing therefore many prefer watching to completion instead of skipping.
Impact on the industry
Cloud computing has revolutionized gaming. The speed and efficiency it offers have made it the leading platform in the industry. The staggering billions earned by gaming companies are largely as a result of this technology. Instead of producing new games, developers simply make improvements by adding new features. This approach not only saves funds but also maximizes existing game elements.
Thanks to cloud services, games are accessed from anywhere at any time. Players can stream their preferred games even from remote servers. They can game on any device; smartphones, tablets or PCs. Daily, weekly or monthly updates are availed to enable a high-end experience. The new content is meant to keep gamers engaged so that they can stay longer on the sites. These rapid changes are coming at an unprecedented rate. This is indeed a space to watch out for.
Gaming is getting better and better. The advancements have improved the user’s experience. Players can enjoy high-quality games across different devices from anywhere at any time. With multiple player options, participants enjoy sharing the fun. The more the merrier, right?
Developers are beneficiaries of the games as a service model. With in-app advertising, loot boxes and subscriptions, gaming companies continue to post high sales amounting to billions annually. The shift to GaaS monetization has contributed to these impressive figures. Undoubtedly, there is so much potential in this industry. We just have to wait and see what’s more in store.