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Video Game Companies Relying on Live-Service Games and In-Game Purchases for Revenue

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Video Game,Live-Service Games,In-Game Purchases

Two of the largest video game companies in the United States, Electronic Arts and Take-Two Interactive, are now making the majority of their money from live-service games, subscriptions, and in-game purchases. This shift in revenue is due to the popularity of microtransactions, which are purchases made inside a game using real money. Game publishers are now focusing on providing updates and content through subscriptions and season passes to retain player attention.

In fact, two of the largest video game companies in the United States — Electronic Arts and Take-Two Interactive — now make the overwhelming majority of their money from live-service games, subscriptions and in-game purchases, according to their recent earnings reports. Microtransactions are purchases that users make inside a game using real money. They show up as subscriptions, virtual currencies, and character customization options, among other examples.

Popular live-service titles such as Fortnite, Call of Duty: Warzone, and Clash Royale were built around this revenue model. Game publishers must provide updates throughout certain game life cycles to retain player attention, which is where the term 'live service' comes from. Gamers pay for those updates through season passes or subscriptions. Gamer backlash from the early attempts at in-game purchases caused the video game industry to shift its approach to these subscriptions and bundling purchasable content

 

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