Players aren’t spending on Fortnite like they used to
For years, the sale of additional in-game content has been the lifeblood of revenue streams for premium and free-to-play games alike. A majority of total PC revenue (85%) and almost half of total console revenue (48%) was generated by in-game spending in 2018. However, only the mobile segment has seen a significant increase in additional content spending over the past two years. PC in-game spending revenue has remained static while console in-game spending revenue has slowly declined over the past year. This stagnation in additional content spending across the board is the result of a combination of several different factors:
1. Players are spending less overall money on in-game content but are proportionally spending more on one or two games.
In the past month, 8% of gamers spent money on in-game content in Fortnite compared to only 2% in games like Destiny 2, FIFA 20 and Madden NFL 20. However, the overall audience for games with a high spending audience is decreasing. Fortnite in-game spending has been mostly declining since the start of 2019 with PC, console and mobile combined revenue failing to break $100M in September 2019. Additionally, in-game conversion has dropped to 16% and 10% on PC and console respectively from 30% and 36% in September 2018. While gamers focus on the games they are willing to spend on, some titles are pushed to the sidelines. In order to avoid this, a steady stream of new content is critical to keep players engaged.
2. Additional content is failing to effectively convert players.
Despite generating $6.5B in PC revenue and $1.4B in console revenue in Q3 2019, in-game spending is failing to reach a sizeable portion of the gaming market. Half of gamers (51%) did not spend on additional in-game content in the past month despite major releases among microtransaction-heavy games such as FIFA 20 and NBA 2K20. Capturing the attention of those who do not spend on in-game content will require new and enticing solutions from publishers. Implementation is key, however, and game makers should be transparent in the ways they sell additional content.
3. Players are growing more and more wary of monetization tactics.
Gamers are fairly sensitive to the opinions of others. A significant share of gamers consider the influence of friends and family (54%) and social media (40%) important when deciding to purchase games. Additionally, over one-in-three are influenced by video game news websites (36%), technology websites (34%) and gaming forums (35%). Word spreads fast concerning games with perceived predatory microtransactions.
Many major video game companies have been the subject of scrutiny over the past two years due to the delivery or context of their monetization tactics. For example, players were upset by the microtransactions in Star Wars Battlefront 2, where the only option to unlock popular characters was to purchase them or play for dozens of hours. Other games have been accused of subtle player manipulation in order to encourage them to purchase more. In Call of Duty: WWII, players open loot boxes in a public hub, where obtaining high quality but improbable loot may inspire other players to purchase in hopes of obtaining it as well.
Meanwhile, both Middle-earth: Shadow of War and Assassin’s Creed Odyssey raised eyebrows for the presence of microtransactions in solely single-player titles. In Middle-earth: Shadow of War, players originally had the option to instantly purchase an allied character, bypassing the franchise’s signature gameplay mechanic of recruiting enemy characters. In Assassin’s Creed Odyssey, players could spend $10 to unlock a permanent experience boost, allowing them to level up faster and thus unlock higher-level equipment and progress through the world faster.
In-game spending as we know it has reached a saturation point. Between loot boxes, battle passes, one-time booster packs and individual cosmetic purchases, there is no shortage of in-game monetization tactics. These strategies, however, are not enticing everyone to purchase additional content. Developers must seek out and identify the best approach for converting players to spenders or earning back player trust that was lost due to poorly implemented microtransaction models. Understanding the state of additional content spending is imperative for game publishers looking to implement such models in their own games. The success of microtransactions depends on game makers constantly iterating tried-and-true methods. While innovation is necessary in order to revive the stagnant market, effective monetization should never come at the expense of an enjoyable and fair game experience.