Online gaming is fast becoming recognized as one of the most effective e-commerce business models on the internet. The reasons for this are vast, yet incredibly simple in their explanation and execution.
Some concern the lack of a physical presence that is needed by an online games provider, unlike a high street video games store; while others play on the fact that it is easier than ever to deliver rich multimedia experiences online without the need for a gamer to own a dedicated games console. The ways in which gamers can pay for their electronic media, in the form of cash, credit or points, is also making games a huge industry for e-commerce.
Drilling down into these two areas in more detail can make even the completely uninitiated understand why online gaming naturally lends itself to being a money-spinner online.
No strings attached
Unlike with an internet retailer, there are no physical products to ship when it comes to online gaming. Platforms like Zynga, OnLive and Steam, purely act as gateways to the virtual product: the game.
As a gamer pays for their own hardware and internet connection, these suppliers have very few overheads, unlike other internet retailers. Apart from paying for a data center which offers game server hosting, they will never find themselves in a position where they have to pay for a bricks and motor high-street store, complete with staff – nor will they ever have to mail anything to a customer.
The majority of an online game provider’s customer service should be provided in-game, or electronically, thus also negating the need for leasing phone lines and recruiting large customer support teams.
Even marketing an internet game doesn’t require a Hollywood-style film budget. Thanks to the proliferation of smart devices and the resulting ubiquity of social networking, a gamer can promote a game to his or her friends, simply by clicking a banner advert on the internet. They can also actively choose to share their in-game experiences to their social networks, rather than have this enforced by the game system, posting their latest position, rank, points or other achievements online.
Ease of access
Online games aren’t just easy to deliver to customers – over our increasingly fast internet connections – but they make it easy for publishers to receive payments as well.
Subscription-based gaming models for example offer the safest kinds of return for publishers. This is because they know that payments are guaranteed by credit card on a monthly-basis. For this cash, gamers also confidently know how much time they’re entitled to on the game.
However, for an online game to retain its audience, developers have to remember to offer their customers something new at least once every few months. Patches and expansions can keep in-game content fresh for players at very little cost to the development team. New content can also reinvigorate a series that is losing fans, as seen by Blizzard’s magnum opus ‘World of Warcraft’ time and time again.
Enabling in-game purchases is another way in which video game designers can make money; albeit on a less-regular and more risky basis.
Free-to-play online gaming models are riding on the crest of a wave today for example, because not only do they bring in these sorts of micro-payments – facilitated by in-game purchases – but they also offer vital marketing intelligence to developers and advertisers in return.
For each gamer that has an account with an online games provider or social network, such as Facebook, they’re relinquishing information about themselves. This personal data can be used to not only make a game better, more addictive and more appealing to the gamer, but give precious insight into what works when a developer moves onto their next big project.
This same information of course can be auctioned, but never revealed to advertisers who can place appropriate in-game ads designed to appeal directly to a gamer. No doubt in future there will be many more ways in which e-commerce can find a place in the ever-popular world of online gaming.