TOA: Activision Blizzard Results Get Boost From In-Game Spending
Link: https://www.wsj.com/articles/activision-blizzard-results-get-boost-from-in-game-spending-1525384027
Published: May 3rd, 2018
Summary: Activision Blizzard Inc. has seen huge profits over the years from their very popular video games. Such as Call of Duty, overwatch, and candy crush to name a few. They have seen a majority of their profits off in game spending by consumers. When the customers buy these games for the initial price they are usually not done there. They actually end up spending money on the game for extra perks that the game provides. This is a trend that video games have started incorporating into their products to see the most profit as possible, 'In Game Spending'.
Analysis: From a sales and marketing perspective, you can appreciate the brains behind decisions makers of these companies. You can imagine these corporations being in meetings asking the question, "How do we keep our sales the same, but make more money without raising the price?" Initially that question seems impossible to find a solution to until the topic of in game spending gets brought up. From a marketing perspective this is brilliant, because this allows the corporations to maintain their original price point, so it does not look as if these corporations are running up the price for profit. So to customers the price looks the exact same outside looking in, if the price was 60$, it will stay that price so everyone will continue to buy the game at the same rate. However once the game is actually played, there will be offers in the game that will give users perks or competitive advantages over others. For example, in the game there will be an offer of 15$ for an exclusive gun that you can unlock that is more powerful than the others. And nobody can get that gun unless they pay the 15$. Examples like that, is how the games make their money. In a lot of cases people will spend 60$ for the initial game and then another 60$ for in game perks. Its like individuals are buying the game twice. For sales this is awesome for the corporations as they keep their customers and make more money. The marketing does not take a hit because they maintain their original price point. This relates to our class in many ways, we can use these examples and learn how to improve business while keeping the optics the same to consumers.
I've noticed in games like Fortnite, since it is free to download, people don't mind paying money for ingame purchases. In fact, they probably spend more on microtransactions than the game itself would have cost.
ReplyDeleteIt's ridiculous but I've even heard of a very intense simulator in which gamers are willing to purchase over $1000 for in game content. It's an incredible strategy for these video game companies because after the purchase of a $60 the price for the actual game only declines. But to keep gamers around it's brilliant that they include ways in which gamers can stick around and play a game longer.
ReplyDelete