With over a decade in the market, Games as a Service has revolutionized the gaming industry, with more profits going to developers and players getting elevated gaming experience.
The onset of Covid-19 negatively impacted industries. Travel, retail, and gaming industries were severely hit by this global pandemic. People were to stay indoors to help reduce the spread of this life-threatening virus. This only meant the next best friend in the house were TVs and online services. Gaming subscriptions increased significantly during this time, giving video game developers exciting profits. In the monetary view, the unexpected demand for gaming might surge in 2021 and more years to come, thanks to Game as a Service.
What is Gaming as Service(GaaS)?
The Game as service is a revenue model that helps video game developers to monetize their games after releasing. Games as service-based- video games can be accessed without initial purchasing costs and generate revenue from in-game purchases and gamer’s subscriptions. EA is one of the gaming studios that continue to rip more profits from Gaas. Reportedly, the company’s market value moved from $ 4 billion to $ 33 billion in 6 years stay of GaaS in the industry.
Initially, gamers used to purchase games, play, get bored and repeat the cycle. Later, Software as service (SaaS) was introduced and took mobile game development to a whole new level. In both SaaS and GaaS, gamers stream the games on their devices through video codec. The gaming software is stored in the hosting company servers, allowing gamers to access multiple games through subscriptions. In GaaS, gamers make purchases through microtransactions and Downloadable Content(DLC).
What Differentiates Games as S Service from Traditional Video Games?
The gaming industry has undergone many changes over the years. It all started with the pay-to-play model, where gamers accessed the games once with no upgrades. GaaS-based games are updated weekly to allow gamers to access new missions, events, areas, assets, modes, and levels. Access to new features makes these games more enticing to gamers of various age groups. With more levels to pass, players find a reason to come back and accomplish the mission before progressing to others. This is quite the opposite in traditional video games, as players can easily pass all the levels at once.
What Were the First Gaming Companies to Employ GaaS?
Blizzard Entertainment was among the first companies to embrace this model. In 2004, the company released an MMO, World of Warcraft which had a monthly subscription of $ 14.99. Through the model, the Game recorded 5.5 million active subscribers in 2015 with a revenue of $ 82 million per year. With this insane revenue stream, the company could often update the Game with fresh content to increase the gamer’s experience. Epic Games also joined GaaS with Fortnite, a free-to-play game. The company gets revenue from microtransactions in its costume add-ons like animations, costumes, and accessories. Fortnite garnered more than 120 million users with $1.2 billion revenue in less than a year after its launch. Other Gaas -based games include Overwatch, Madden, Candy Crush, Hunt: Showdown, and destiny.
GaaS Payment Options
GaaS has provided revenue opportunities to many video game developers. In this model, gamers pay for services with two options including;
Here, gamers are charged at a flat rate weekly, monthly, or annually. For instance, Shadow players can buy the monthly entry-level Shadow boost for $ 12, Shadow Ultra for $25, and Shadow Infinite for $ 40.
In tiered billing, gamers are charged based on unit range. For instance, you can buy The Battle Pass in Fortnite for $ 9.50, the Game’s currency called V-bucks. The pass allows the gamers to buy tiers from the existing 100. Players can also pay for the gaming service they want through cryptocurrency.
Other Ways Of Monetizing Games in GaaS Model
Most video games can be accessed without payment. However, developers generate revenue from game content sales. In-app purchases allow gamers purchase every gaming content they want. This boosts the developer’s revenue and players’ involvement in the game.
Revenue from advertisements is determined by the quality and quantity of ads in the game. To get more revenue, the developers need to create ads and ad formats that are engaging, informative, innovative, and less disruptive. Most games feature interstitial ads that gamers find annoying because they cover the whole screen.
Pros And Cons of GaaS Business Model
Maintenance and support of Games –as-a-service titles come with pros and cons. With the ever-increasing acquisition costs, video game developers are battling to keep players around and maintain the revenue stream. Here are the advantages of on-game demand streaming to developers.
Increased GaaS-based game Lifespan
Players easily dropped traditional video games because they were boring. These games came with no updates, limiting players to the available features. With GaaS, gamers access new missions, events, modes, and assets that elevate their gaming experience. For this reason, gamers find themselves paying to access new features and upgrades that increase the game’s lifespan in their devices. Continuous subscription to the games also elevates the developer- players’ relationship.
Maintains The Revenue Stream
As discussed above, GaaS-based games generate revenue in multiple ways reducing dependence on in-app purchases. This allows developers to create plans that enhance long-term monetization for continuous revenue stream.
Requires frequent Update
GaaS-based games require weekly updates to give gamers a new gaming experience that keeps them around. With the growing number of hackers, the Game’s content can also be altered, resulting in losses. To avoid this, developers should keep track of updates. Nonetheless, they should avoid releasing updates to games in various languages once.
The Bottom Line
GaaS has stood in the gaming industry for a decade. With the onset of 5G connectivity, this trend can continue for the rest of 2021 and beyond. The development of 5G will allow gamers to play on low computing gadgets. Today, game top game developers partner with telecommunications giants to create cloud gaming services in the world. For instance, Microsoft cooperates with South Korea’s SKT to deliver better cloud gaming services to the Asian market. With this trend, we expect more video game developers to join GaaS for better gaming experiences for players globally.