Quarter Up: The Evolution of the Video Game Business Model

I hate the concept of free-to-play games. As someone who has grown up mostly buying boxed copies of video games at the store, I greatly dislike the idea of being given a game for free and then constantly harassed to pay later in exchange for cosmetic items or other things that directly impact my enjoyment of the experience. The fact that these games are wholly designed to maximize profits rather than to fully-realize a great gameplay experience is something I find rather gross.

Having said that, it’s easy to lose sight of the big picture. Video games have always been influenced by the business model behind them. Even if you go back to the arcade days where the monetization of the medium began, there was a business model driving that experience, too.

Back then, most of the technology for video games was too large and unwieldy for home use. In order to sell games, developers and publishes created arcade machines to sell to public venues, from arcades to convenience stores. In exchange, these public outlets would gain their return on investment from the quarters they’d collect from players. As such, games were bite-sized experiences that were designed to eat your quarters as quickly as possible. From Space Invaders, to Street Fighter II and everything in between, that goal holds true. Gamers of that era (myself included) didn’t know any better because there wasn’t another way.

Eventually, the home console would evolve to a point where it became the dominant force in the marketplace. Gamers could get arcade-like experiences at home, or whole new experiences that were much deeper in nature. You may not get the graphics of Dragon’s Lair at home, but you couldn’t play an adventure as long or as intricate as The Legend of Zelda at an arcade, either. As such, the cost went from a quarter a session to a much larger upfront investment in exchange for full use of the game. Many arcade games ported over to home platforms struggled with tailoring the experience for home platforms because they weren’t designed to be played that way.

As time, technology and our gaming habits have evolved, so has the business model. For awhile, subscription-based MMOs were a thing. Then, as people grew weary of that, they moved to free-to-play MMOs. Console games have also dove deep into the world of downloadable content as a means of generating more revenue off of an existing game. In the right context, such as Rock Band, DLC is a great way of extending the experience in an inexpensive manner.

Though I’ll be the first to complain about the free-to-play model, I’m cognizant of the fact that the industry goes where the money is. Based on past history, it always has. Free-to-play is where it is because companies are generating a meaningful amount of money from it. As a gamer, the most important thing I can do is vote with my wallet. Until a free-to-play game can earn my trust, they definitely won’t get my hard-earned money.

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One thought on “Quarter Up: The Evolution of the Video Game Business Model

  1. jsicktheslick February 26, 2014 / 2:12 PM

    Though I’ve not thought about it all too much, I agree that the Free-to-Play model really just eats up your cash. You mentioned cosmetic changes that come with paying for the “Premium” content in these types of games, but even worse are the paid games that lock away ACTUAL content from the player until they pay more. I think that practice is even worse and should be done away with altogether.

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