The video game industry has undergone many changes over the past few years, which has been a boon for investors, but not so great for those who play the games themselves.
A major factor driving revenue growth for companies such as Microsoft (Microsoft) – Get Microsoft Corporation reports and Sony (SNE) – Get the Sony Corp. report is the era of microtransactions in video games, also known as downloadable content or DLC.
These digital items range from clothing to new parts of the game, and typically cost less than $10.
These are also popular in the mobile gaming world, where free-to-play games such as King’s (king) “Candy Crush Saga” makes big bucks by letting users try the game and then conveniently sell in-game currency and items that make the game easier.
Gamers complained about the nickel-and-dime nature of DLC when it started to get huge in the Xbox 360 era under Microsoft’s promotion, but those numbers tell a different story.
The NPD Group’s Q4 Market Dynamics report found that nearly 60 percent of money spent in the gaming industry in 2021 was on DLC, and those numbers are expected to continue to climb.
But now that Sony is considering new initiatives that Microsoft is officially announcing it is exploring, if gamers hate the idea of DLC, they will real will hate this.
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What is Sony’s move after Microsoft?
Microsoft’s plan is to place ads in video games.
You won’t get them in the big-budget editions where you pay full price, like the recent wildly successful adventure “Elden Ring.” At least, not yet.
But they could be in Microsoft’s stable of free-to-play games, such as the hugely popular “Fortnite” and “Roblox.”
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Business Insider reports that Microsoft doesn’t plan to take a cut of the revenue from advertising, but instead to benefit game developers and ad tech companies.
And now, a new report says Sony is considering doing the same.
The software giant is reportedly testing the advertising program, and it has not yet been decided whether it will cut revenue if it goes ahead.
Microsoft has gone down this path before
Microsoft has long struggled to find a way to bring in-game advertising to games. It acquired advertising firm Massive Inc in 2006 with the goal of delivering third-party advertising to Xbox users.
But by 2010, it decided to shut down the brand and move all operations inside what was then Xbox Live.
Microsoft is treading carefully and considering less intrusive ways to insert ads into games, such as displaying ads on roadside billboards in racing games.
It could also create a private marketplace for advertisers, keeping the ads themselves out of the game, while allowing them to play the game before or during a break. No decision has been officially announced yet.
People who enjoy free games on mobile devices are used to this formula on the platform. Many games require users to watch advertisements for rewards that are useful in the game, such as extra coins or special items. This is one of the ways that developers earn revenue from their products rather than charging for games up front.
Introducing ads in free-to-play games ensures that even players who don’t spend money on microtransactions will have some revenue while playing, because if ads appear in the game, they’ll have no choice but to avoid playing the game entirely.
people furious at the idea On social media, they even said they would stop buying games from both companies if in-game advertising became a reality.
Others tagged PlayStation Studios head Hermen Hulst on Twitter to express their feelings on the matter.
