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How does Gaming Industry makes money?



Let's start from the beginning, the revenue of the gaming industry is touching new milestones every year. Naturally, many new studios, startups are emerging at a fast pace and as for this; the need for highly skilled workers in the gaming industry is increasing.

Opportunities are plenty, from developer to artist, marketer, HR, project manager, etc.

With digital distribution on the rise, many companies are growing with this momentum and uploading their games on platforms like Steam. Thus Companies can monetize with ads and in-game purchases. In past, the games were sold separately.

Nowadays it is possible to be a gamer no matter what is the size of your pocket. Moreover, game studios are expanding towards mobile and social gaming providing a common platform for all to come and play the game together.

The game Industry was never been so lucrative and many experts say the boom for games will stay longer. So, let's dig into game studios and see how they make money!

Right from our childhood days, we all have been playing games like Pac-man, super Mario, road Rash, etc. Then, as gaming industry evolves, games like FIFA 98, Cricket 2002, Vice City, etc. started to come out and they became the greatest hits. Now, you can see, the quality and standards of the game started changing for good. Those were the times when we used to play snakebite games on mobiles and mobile companies made those games and it was not made for direct business.

These days you have to buy the games on mobile or at least you have to watch the advertisements to continue. These days the concept of gaming has changed a lot. Watching advertisements have become so common these days, that nobody complains.


Different Methods of Generating Revenue


· Conventional Method


Normally the gaming companies generate revenue or they usually, completely depend upon revenues by directly selling the game to the customers from the stores. It is as if you build the game and sell it to different stores from where the customers buy your games.

There is another convenient way of earning money by making publishing the game on Steam-like online platforms. Suppose you publish a game and then for every sale of the game you have to give some percentage of the amount to the platform (whichever platform you are using). For example, you build a game and you are selling it on the platform for 10,000 Rs. then you have to give 1000 Rs. to the platform as compensation for each sale.


· Mobile


When you upload your game on the store from where the people can download it, you can either charge them for downloading or by showing ads in the game

This is a new and interesting concept, I think. When you play the game after downloading it, you will see the in-between the game ads will be displayed.

Now take that concept the gamers have developed games such that by seeing ads you can get certain tools to continue the game. Like, when the game is widely played, the gaming company approaches the gamers to post their ads and also pays a huge amount of money for that.

Another exciting and intelligent way is to play the game and watch ads to earn more points in the game. So, whenever you are watching the ads, the gaming company is getting a small amount of money but when millions and billions of people are watching the ads, the amount takes a gigantic shape.


· Free to Play


During the late 2010s, a new concept arose that earned money by making F2P games that are free to play. The games like Call of Duty, Counter-Strike, League of Legends, etc. provides you a feature of buying various things from the games.

Buying and selling the latest, different, or fancy-looking Skins, Guns or tools are the biggest way to earn money in the gaming world.

Anyone who has played Fortnite is familiar with how quickly "V-Bucks" payments can add up. In fact, Fortnite ranked in $1.2 billion of revenue in July 2017, just after the year it was launched. By putting the in-app purchase of skins, avatars, and even more customized options let the game succeed in its genre.

Here the trick is simple, " if the costs are too high, players will start to question the point of downloading a "free" mobile game.


· Subscription


Though the subscription method of earning from games is very rare these days still some games use this method. In such games, you will have to pay a monthly or a yearly subscription amount which will go directly to the studios. A game like Run Escape works on the principles of this method.

They also offer a free version of a game at first and when you get addicted to it then you will end up subscribing to it. but nowadays I hardly see subscription-based games.

When you subscribe to it and become a member of these various games then you will be able to use various weapons and tools that are provided in the game also player will have many coins to play and compete in-game. Even in some games when you subscribe to it, the game will not show any ads to it. Hence, gamers will earn in some or other way.


Not All Games are Profitable


If you check the number of games that come out on market every year, that only 13% of them only become a success. Take the case of shooting games, there are plenty of successful shooting games in the market. The world has become obsessed with such kinds of games. People download these games and playing a lot. Even big companies also arrange tournaments on these games.

The main reason for failure for these games is that they change their Genre and category. EA has done a great job; they know their Genre and have maintained it from a long time. They have hardly made games on such fights rather than concentrated on FIFA, Need for Speed, etc.

It is very important to concentrate on your genre otherwise; it will not take much time for you to come into the category of failed games. In these shooting games, it is important to make and keep a character with some difference and should have something unique than your competitors.

If there is nothing unique about it then the gaming companies will never be able to earn money, as the customers will not like the game.