The ‘new’ pricing strategy of console games

1

October

2020

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Even though the freemium pricing strategy has been around some time (‘Fremium’, 2020, it is starting to make its entry in the bigger mainstream games. Some of the most known examples of this are most likely Fortnite, Apex and Warzone. Those games are free to download and offer access to basically everything the game offers. They make revenue by selling cosmetic items and through a subscription based ‘Battle pass’. In the past, games like these would cost around 60 euros and you would still have the ability to buy downloadable content.

More and more games are adopting a similar style of releasing big games for free, or at least part of it. Warzone for example, is part of a Call of Duty game. If you start up Warzone, you see the menu that would go to the other part of the game but it is locked if you haven’t bought the entire game.

It makes perfect sense for Call of Duty to release Warzone separately for free. As it is a digital good, the marginal cost is almost zero as it is already existing in the PlayStation or XBOX stores and it only has to be downloaded by the user. Usually, the fixed costs are rather high for informational goods. Even though that may be the case with Warzone as well, I think that they could use a lot of the programming work of the actual game. So the core was already made for the actual game and they only had to change and add some smaller things for Warzone. This may have lowered the fixed costs for Warzone.

By releasing it for free, a lot more people download it compared to when it would’ve been a game that had to be bought (Takashi, 2020). Because of this, there are some positive network externalities like better matchmaking and the possibility to play with your friends. This increases the value the game gives for the users which leads to a higher willingness to pay. As the game is free, the users may decide to buy those battle passes. It could even lead to buyers buying the entire game because they liked the free-playable part of it.

In conclusion, I think that the freemium pricing strategy is one that we will see more often in the higher end of the game industry. The main reason for this is that they could leverage the knowledge and functionality of the actual game, to create a sub-game at a relatively low cost which attracts new customers and new revenue to the game (Their, 2020). In that sense, the free to play ‘sub-games’ could even be seen as a disruptive innovation as they are good enough for a lower market.

References
Freemium. En.wikipedia.org. (2020). Retrieved 1 October 2020, from https://en.wikipedia.org/wiki/Freemium.

Takahashi, D. (2020). Call of Duty: Warzone hits 60 million downloads in less than 2 months. VentureBeat. Retrieved 1 October 2020, from https://venturebeat.com/2020/05/05/call-of-duty-warzone-hits-60-million-downloads-in-52-days/.

Thier, D. (2020). Call Of Duty: Modern Warfare’s Battle Royale ‘Warzone’ Is Free-To-Play, Here’s When You Can Play. Forbes. Retrieved 1 October 2020, from https://www.forbes.com/sites/davidthier/2020/03/10/ps4-xbox-one-pc-download-call-of-duty-modern-warfares-battle-royale-warzone-is-free-to-play-heres-when-you-can-play/.

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Will people accept Neuralink?

7

September

2020

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Elon Musk. A name a lot of us BIM students most likely are familiar with. He has some respectable companies behind his name such as Tesla, SpaceX and the BoringCompany. Perhaps a company of his which you haven’t heard of yet, is Neuralink.

The thing they’re developing over there is, as they say so themselves, a breakthrough technology for the brain. It could possibly defeat diseases such as paralysis, deafness, blindness, memory loss and strokes in the future.

The Neuralink itself is basically a small chip that would be implanted into the brain, as can be seen in the video referenced below. Besides that chip, they’re also building a robot which would be capable of performing the entire operation of getting the actual chip into the brain. This would mean that no doctor would be needed in the surgery.

Although all of this sounds rather promising, a promising story is not enough to get your product or technology to the masses. The people also have to be willing to adopt to the technology. Even though most people might say that the resistance to such a technology is high, try to think of the following situation. You love being outdoors and doing all sorts of activities. One day, you’re driving down the highway and the person in the car behind you isn’t paying attention and doesn’t see that you’re braking. He crashes into you which results in you having a whiplash. You’re paralyzed from your neck down. When you’re in that situation, it may be more compelling to have a chip implanted into your brain so that you could use your body again.

It depends on the relative advantage you get compared to the old situation. If you’re healthy, sure, you would oppose such a science-fiction thing. But when you’re in a position in which your daily life is almost unbearable, something like the Neuralink could be like a miracle.

Two other salient points in whether people accept a certain technology are visibility and the ability to communicate benefits. Neuralink is already giving presentations like the one I mentioned in the beginning of this blog. This helps to get people familiarize with this technology. In the future, Neuralink could also release examples of people that have been cured from their diseases with Neuralink. So I think there’s a great potential for Neuralink to communicate their products’ benefits to the people that would need it.

The complexity of the new technology also plays a pivotal role for people to decide whether or not they have the intention to adopt to a technology. As can be seen in the video, Neuralink can be implemented into the brain in less than an hour and you could leave the hospital within a day. They also show you that there are no visible signs of the Neuralink, so one could have it without someone else knowing it. As people are already sometimes ashamed of something as banal as glasses or hearing aids, I think that’s also very important. The only drawback I saw in the video regarding complexity, is the charging process. It’d have to be charged like you would charge your smartwatch. So you would still have to put something on your head at night for it to charge. They did not elaborate on this further so a proper opinion on this, can’t be giving yet. All we can do is imagine how we would have to charge it and none of those ways seem really attractive or practical to me.

Compatibility in regard to culture should also not be overseen and I think that this is perhaps the biggest hurdle Neuralink should overcome to really convince people. Numerous potential fears that people might have could be thought of. Such as Neuralink controlling your brain instead of yourself controlling it. But perhaps the biggest concern is just the overall thought of having a chip implanted into your brain.

Some other technologies that may have the same general concerns are genetic manipulation, deep fakes and advanced AI programs. These technologies are all very different from a new type of phone for example. So the adaptation of these technologies might also be very different. These are technologies that maybe need a lot of public discussion and regulations before such technologies even go to the possible adaptation phase. I think that for technologies like these, a new way of looking at the adaption cycle of technologies is needed as these are vastly different from the technologies we used to encounter. They also propose more severe potential dangers and resistance from people even though the implementations of them, when used properly, could be tremendously.

Concludingly, I think that Neuralink will eventually be accepted and adopted by the people, but that it will follow a different adaptation cycle than the type of technologies we’ve had before. This also emphasizes the importance of looking at the adaptation cycle differently for such new and controversial technologies as Neuralink isn’t the only technology that belongs to that category.

 

 

References:

https://www.youtube.com/watch?v=CLUWDLKAF1M

neuralink.com

Li, T. 2020, Session 1 – Digital Disruption, Information Strategy BM01BIM, Erasmus University Rotterdam, 07-09-2020.

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