Digital River, a monetization service company, has found that games as a service has tripled the industry’s value in their report titled “Defend Your Kingdom: What Game Publishers Need to Know About Monetization & Fraud”
The report states that developers of all sizes are benefiting from “steady stream of in-game content that both serves player expectations and increases their revenue per user.”
This does not just apply to free-to-play titles: In 2016, a quarter of all digital revenue from PC games with an upfront cost came from additional content.
Consumers are less willing to pay $60 for a boxed game and instead choose titles with a steady stream of new content. Publishers seek to meet these expectations and have adopted a ‘games as a service’ model, releasing fewer titles over time while keeping players engaged longer with regular updates and add-ons.
According to Digital River, this change from a one-time-cost game to partial payments will boost the growth of revenue per user. It is expected to grow twice as fast than the rest of the market. The fact that backs up this claim is that PC players in the US wait 21 days after they decide they want content before buying in the hopes they can take advantage of a sale.
Digital River concluded that “gamers are gaming the games market.” This allows space for third-party sellers to meet the ever-growing demands of the consumers for discounts. Digital River also noted that these resellers often buy keys from game publishers with stolen credit cards and then sell them in the gray market. A practice that is harmful to everyone.
When the fraud is detected, publishers who sold the keys are hit with chargeback fees. Game makers can deactivate illegitimate keys, but the players who bought them do not usually know they are part of a scam. Gamers may believe their keys have been deactivated for no reason, and this can cause a negative backlash.
Grey market resellers like G2A have always been involved in controversy. They have recently been banned from sponsoring League of Legends tournaments because of that. It is not an unknown fact that publishers and developers must invest in proper payment safeguards.
This way, they can stop fraud at the point of sale and deprive markets of illegitimate game keys. Publishers should also clearly state which third-party sites are authorized to sell their products, since hardcore gamers are becoming aware of the issues with grey market fraud.
Previously, publishers simply lost revenue from a pirated boxed game. Now, many developers prefer piracy over credit card fraud so they don’t end up with negative revenue.
According to Digital River, this can all be avoided if the publishers turned to safeguards like trade-waiting periods and restrictions on new accounts. Being transparent about which third-party sites are authorized to sell their products would also help a lot.
A full report can be found here.