The gaming industry is experiencing heavy competition and changed a lot the last 30 years. Originally, games were not sold as true information goods, but more as material goods such as arcade consoles. Today, many games are sold through digital stores such as the Playstation Store, the Xbox Live Store, the Nintendo eShop and Steam. The video focuses on Steam, as it does not require any dedicated gaming consoles besides a computer. It is especially innovating the gaming industry by its pricing structure. It allows multiple pricing methods, such as one-time purchases, bundling, personalized promotions, in-app purchases and gifts. There is also the advantage of having zero capacity constraints, in order to extend the long-tail of sales.
Also, cloud gaming is increasing in popularity. With cloud gaming, the game is played from a server in the cloud. The only thing a player needs, is an internet-connected device such as a computer, tablet or mobile phone. This makes expensive hardware unnecessary. Cloud gaming providers use different pricing strategies as well, but subscription based models are most common. Cloud gaming is still developing itself a lot.
In the video, we compare both digital game stores and cloud gaming, and explain how these innovations changed the gaming industry. We expect the revenue tail of games getting longer and longer, and a high rate of adoption for cloud games the coming years. Enjoy the video!
