How Games Earn? Case Study on Gaming Industry
How Games Earn? A Complete Case Study on Gaming Industry
You may hear the name of Popular games Such as PUBG, GTAV vice City and Candy Crush.
Do you think about how these popular games make money?
The gaming industry is growing rapidly in India and worth 90 billion In 2019
So let’s start a detailed blog on how games earn and how big is the gaming industry?
What’s in it for me?
Gaming Industry Overview
Gaming Industry is the economic sector involved in the development, marketing and monetization of games. Gaming Industry In India is valued at 60 Billion in 2019 and is expected to reach 250 Billion in 2024.
The gaming industry is growing in India with a very high growth rate because India has the world’s largest youth population and embracing the new generation’s interest in digital sports and entertainment.
More than 60% of gamers in India are below the age of 24. Mobile Gaming is also growing very fast in India due to the affordability of smartphones. India is one of the tops of Gaming markets in the world by no. of users. PUBG Mobile is the most popular game in India. In 2020, India becomes PUBG’s market in the world and the only reason behind this is India has the largest youth population.
Why Gaming Industry Is Growing
The gaming industry is growing with 14% CAGR. Following are some reasons for the growth of the Gaming Industry in India and worldwide
- India has the world’s largest Youth Population and the games are mostly played by youth. That’s why this gaming industry is growing in India very fast.
- The world’s second-largest internet population is the second big opportunity for the gaming industry in India.
- There are big Gaming centers in India that are developing games in India such as Microsoft, Nvidia, UbiSoft, Zynga, Electronic Arts, Disney, Playdom, Sony, Digital Chocolate, etc.
- India has the creative talent, huge IT Skill and World-class infrastructure & advanced technology.
- Another reason for the growth of the gaming industry is the affordability of smartphones.
How Games Earn? (Business Model of Games)
The growth of every industry is always measured by revenue generated by it. There are a lot of ways to make revenue in the Gaming Industry, Here we will discuss some popular Business models of Games.
- Advertising Model
The first business model is advertising which is very popular and used by most of the games. Advertising business models are not new in the digital industry and very common. In this model, games show Display ads, Interstitial ads & Incentivized ads, etc to earn money. There are various platforms available to monetize your games Such as Google Admob which is owned By Google.
If you want to monetize your app or Games you can use Google Admob to monetize your game or App. There are some other monetization platforms too but mostly used google Admob. In this model games company earns revenue by the impression seen on their ads. So the first business model of games is the Advertising model.
- Upfront Payment Model
The second business model is the Upfront Payment model in which games charge a flat fee to download this game. This model is used by many big games that are very popular.
The Biggest example of Upfront Payment is Grand Auto Theft (GTA) Vice City.
- Subscription Model
The third business model used by Games is a subscription model in which games charge a continuously small fee. This model is used mostly by video games who used massively multiplayer online games (MMOs).
The reason for charging recurring fees is there are high server and maintenance costs of these games and they do not rely on Advertising and upfront payment to cover this cost That’s why they charge a recurring fee.
- Free 2 Play- Next
This is another business model used by the various games. In this model, games are free to download but require dees for various upgrades.
- Freemium Business Model
Freemium Business Model is another most popular business model used by games. In this model, games are free to download and play but there are a lot of various purchase games called microtransactions.
For example, In the Ludo game, you will earn some coins when you win or lose some coins when you lose and if you’re out of coins you can buy coins by paying someone you can pay a flat fee for ads free experience and thy also use microtransactions in their games. Thus who used 2-3 businesses model together money.
- Hybrid Model
The another business model used by games is a hybrid model in which games used 3-3 types of business models. For Example, they used Advertising businesses in which they display ads but if you want an ad-free experience called a hybrid business model.
Top 5 Games Company
- Sony Interactive Entertainment (SCEI)
Sony Interactive Entertainment is a Japanese-American gaming company that is a subsidiary of Sony Corporation. Sony Interactive Entertainment was founded by Sony Computer Entertainment Inc in Tokyo, Japan in November 1993. Popular games by Sony Interactive Inc are Bloodborne, Shadow of Colossus, Dreams and many more.
|Legal Name||Sony Interactive Entertainment|
- Tencent Games
Tencent Games are subsidiary Tencent holdings which are a Chinese multinational conglomerate company. Tencent launched its first game named QQ tang in 2024. Popular games by Tencent are League of Legends, PUBG Mobile and Crossfire.
|Parent Company||Tencent Holdings|
- Nintendo Company
Nintendo is a Japanese multinational video game company based in Kyoto. Nintendo is the world’s largest video game producer by market capitalization. Nintendo was founded by Fusajiro Yamauchi on 23 September 1889. Nintendo created some of the most selling and well-known games such as Mario, The Legend of Zelda and Pokemon, etc.
|Industries||Gaming, Video Games|
|Founded Date||23 September 1889|
- Microsoft (Xbox Games)
Xbox is another popular Video game company created and owned by Microsoft. Some of the Popular games by Microsoft Xbox is Grand Auto Theft Vice City, The King of fighters and Miami Vice
- Activision Blizzard
Activision Blizzard is an American Video Game Company based in Santo Monica. The company was founded in 2008 through the merger of Activision. Call of Duty Black ops, Call of Duty WWII and Pitfall are popular games by Activision Blizzard.
|Industries||Gaming, Video Games|
Top 5 Games
PUBG is an online multiplayer company published by PUBG Corporation. The game first launched for Microsoft window but now available for Android also. PUBG Corporation is a subsidiary of South American game Company Bluehole. The blowhole is a roughly 40% stake in the company. PUBG has more than 50 million users. PUBG is the second most selling game with more than 24 million copies.
|No. PUBG Players||$227 Million Monthly Users|
|PUBG Copies Sold||$60 Million|
|Total No. of People Played PUBG||$400 Million|
|PUBG Revenue||$920 Million|
|PUBG Profit||$311 Million|
Fortnite is another popular video game launched in 2017 by Epic Games. In 2019, Fortnite has an overall 250 Million users. The game is free to play and a wide of in-app purchases available. The Game has huge success since the launch that brings millions of dollars to its creators. Fortnite reaches 100 Million ISO users in 5 months.
|Total Players||250 Million|
|Revenue Generated Through the App Store||455 Million USD|
- Clash of Clans
Clash of Clans is a multiplayer online game developed by Finnish game developer Supercell. The game uses a freemium mobile strategy. The game clash of clans is downloaded 621 million times. The game clash of clans earned $722 in 2019.
|Total Downloads||621 Million|
|Daily Earning||$1 Million|
|Annual Revenue||$722 Million|
|Total Earning||$6.4 Billion|
- GTA Vice City
GTA Vice City was an action-adventure game in 2002. There are more than 200 million copies sold in this game. GTA Vice City is the most popular game in the world. The company uses Upfront payment for downloading it from Google Play Store
- Candy Crush
Candy Crush is a puzzle video game developed by King. Candy crush has more than 247 million active users. Till now Candy crush has earned more than $2 billion in terms of revenue. There are more than 5000 levels in this game.
|Monthly Active Players||247 Million|
|Total Revenue||$2 Billion|
|Total Downloads||1.34 Billion|
|Monthly Revenue||$391 Millon|
Future of the Gaming Industry
The gaming industry has massive success in the future because of upcoming technology. Let’s deep dive into the future of the gaming industry
- Future Virtual Reality will come in the Gaming Industry.
- Companies Life Sony & Microsoft are developing Second Screening Device for gaming like Wii U and Sony Cross-Play
- The next big thing in the gaming Industry is Open Source Platform which can help games developer not to buy extensive SDK software. By the use of this open-source software, they can make their games at very less cost and sell them at a cheap cost.
- They’re also coming Augmented Reality in Games which can be fed with additional information or data overlay, digitally, in real-time
- The other big thing is coming in the games industry is cloud gaming in which user needs only a stable internet to access games as easy to access music and movies.