Gaming approaches an in-game purchase tipping point

The vast global games industry is about to experience a new paradigm in which sales of in-game items and subscriptions have grown to roughly match the amount spent on games themselves.

Why the gaming shift matters

As the Financial Times observes, virtual goods are now worth around a third of the overall $61bn business of gaming, based on data from Ampere analysis.

The trend has much to do with free-to-download games with optional purchases like Fortnite and Roblox. These have grown steadily in popularity since 2017, sparking a broader interest in the idea of the metaverse.

What it means is that for major gaming companies, the economics of their business is shifting away from a movie-style world of big releases to games that act as platforms or as pay-for-access subscriptions. But this new trend indicates new opportunities for brands to market via gaming.

What’s going on

• The shift is an important driver behind Microsoft’s acquisition of Activision Blizzard, the games publisher, a move that is designed to strengthen the Xbox maker’s subscription offering. The deal remains under regulatory scrutiny.
• Selling and marketing strategies are shifting too. Game sales – either as physical discs or digital downloads – require a high-reach strategy capable of driving sales among heavy and light game buyers; free game titles typically make money from a minority of users.
• For brands, the expansion of access means that bigger audiences are increasingly available as the line between console and mobile gaming blurs, offering new opportunities in both creative and media.
• Recent examples include Nike and Fortnite’s partnership, Airphoria, an immersive experience to bring to life the Air Max brand.

Sourced from the Financial Times, WARC