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Gaming monetization - Statistics & Facts

Revenue within the video gaming industry has exploded in recent years, with the mobile gaming market alone worth over 77 billion U.S. dollars in 2020. The gaming software industry depends on three monetization models to make such mammoth profits: consumers may simply buy games, revenues can be generated via in-game advertising, or gamers spend money on micro-transactions and downloadable content (DLC) within the game. Each of these models can be exploited individually however, in many cases, gaming companies choose to combine at least two of the three models to boost income prospects. The combined models function mostly in free-to-play (F2P) games, where gamers are encouraged to pay for enhancements, such as additional lives, currency, personalized avatars, an ad-free experience, or unrestricted playing time. Those playing for free may face in-game advertisements, timers, a lack of customization options, or other annoyances.

In the United States, the average annual expenditure on gaming software in 2019 amounted to approximately 11.94 U.S. dollars per consumer, a vast increase from less than two dollars per consumer in 2011. The biggest spenders on mobile gaming were those aged 25 to 44, although there has been a recent trend of children spending money on video gaming, with or without their parents' permission. In fact, during a 2020 survey, almost 15 percent of parents revealed that their children spent between 50 and 100 U.S. dollars each month on in-app purchases in smartphone games, while over two-thirds of parents expressed concern that their kids were overspending on mobile games. These concerns do not seem to be unfounded as three-quarters of 10-12 year-olds admitted to buying in-game content, while 62 percent had bought paid games.

In terms of specific models used in mobile games, in-app advertising is a popular choice among developers. However, the reception for this form of advertising is decidedly more mixed among the gamers themselves. Gamers generally want to feel rewarded for being exposed to advertising within games, with 76 percent of Millennials in the United States stating that they preferred opt-in rewarded ads over interstitial ads. Game developers also rely on the competitive spirit of gamers in order to maximize profits. Downloadable content (DLC) and microtransactions are a way of enhancing the video gaming experience for the players by giving them access to exciting new content, which can range from the purely aesthetic changes to upgrades to characters and items. In the United States, 87 percent of gamers admitted to purchasing downloadable content, with some of the main purchases including in-game currency, cosmetic upgrades, and weapon upgrades. Some of the most popular games that employ this gaming monetization tactic include Fortnite, League of Legends, and Overwatch.

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