©2013 Visa and Magid Associates Video Game Business Models and Emerging Trends Among Consumers Commissioned by: Presented at:
Nov 12, 2014
©2013 Visa and Magid Associates
Video Game Business Models and
Emerging Trends Among Consumers
Commissioned by:
Presented at:
1 ©2013 Visa and Magid Associates
Methodology
Frank N. Magid Associates conducted an online survey in December
2012 that focused on the attitudes and behavior among a broad range of
gamers.
Using a highly qualified sample provider, Research Now, Magid
surveyed a representative sample by gender, age (13-54 years old) and
ethnic background. A screening question (Which platform do you own
and use regularly for gaming?) was used to identify current gamers.
Those who did not select at least one of the platforms screened out.
The overall incidence (the chance of finding a gamer) of this study was
81%, up from 75% in the previous research. The incidence of gamers is
highest among 13-54 men (96%) and lowest among 45-54 women
(67%)
Therefore, within the United States population (13 -54 years old)
144,000,000 are playing games on some type of platform.
Among gamers, 52% are men and 48% are women.
Notes: Unless otherwise stated all data showed was sourced from this survey. Any references to specific game titles are used solely for representing the consumer provided information and does not imply product endorsement
2 ©2013 Visa and Magid Associates
Are You Prepared For This?
The current gaming model strongly favors Free-To-Play and the
momentum also favors Free-To-Play. Two-thirds of all gamers now prefer
the Free-To-Play model with only one in ten preferring Pay-To-Play.
Where is the momentum in your games? Are you using today or considering
moving towards a free to play game model or possibly a hybrid model
combining free to play with a subscription package premium option?
Pay-To-Play has the image of a “better experience” but is at parity on all
other game images. In fact Free-To-Pay games are as likely named over
Pay-To-Pay when it comes to:
Having a wide variety of games
Games that allow you and your friends to play
Games that are more fun
3 ©2013 Visa and Magid Associates
Are You Prepared For This? (continued)
Free-To-Play gamers named “money - value” as the top reason for
playing.
How can you make the gaming experience easier when it comes to
Free-To-Play transactions?
Quality is a unique trait for Pay-To-Play.
How can you maintain quality over increased competition from
Free-To-Play? Are your pay-to-play games competing by claiming better
graphics and quality? These are no longer differentiators - Storyline and
gameplay experience matter most – they always have.
4 ©2013 Visa and Magid Associates
Are You Prepared For This? (continued)
The time is rapidly approaching when gamers will spend more money on
Free-To-Play. This will happen when:
More consumers become gamers;
The number of Free-To-Play gamers increase;
These players increase in the number of micro-transactions;
An easy to purchase model in place that increases the average spend.
Based on the current assumptions, when the average spent on Free-
To-Play moves slightly from $10 to $17, then Free-To-Play “wins” on
the dollars spent per year.
What model are you exploring to make Free-To-Play an easy model to
connect to those not spending money?
5 ©2013 Visa and Magid Associates
The Gaming Market Continues Its Rapid Expansion – More Than 8 in 10 Consumers Are Now Gamers. This Growth Can Be Attributed To Growth In Smartphones As A Popular Gaming Platform.
Gamers exist in all
demographic groups, but are
slightly more likely to be
young, 13-34 years old males.
Demos
U.S.
Population
Total
Contacts (N=743)
Gamers (N=601)
Non-
Gamers (N=115)
% % % %
Ma
les
13-17 6 6 7 1
18-24 9 8 9 6
25-34 12 12 14 3
35-44 11 11 12 11
45-54 12 12 10 22
Fe
ma
les
13-17 6 6 6 3
18-24 8 8 8 7
25-34 12 12 12 9
35-44 11 11 11 15
45-54 13 14 11 24
Ra
ce
White 64 64 62 77
Hispanic 16 17 18 10
Black 12 11 12 4
Asian 5 5 5 3
Other 3 3 3 5
6 ©2013 Visa and Magid Associates
Smartphones Now Equal To Consoles As The Preferred Gaming Platform (Single mention – preferred gaming platform)
35% 34%
11% 6%
3%
Console Smartphone Tablet Computer Handheld
7 ©2013 Visa and Magid Associates
49%
25%
7% 9% 3%
18%
45%
15%
4% 4%
Console Smartphone Tablet Computer Handheld
Men Women
While The Console Still Reigns Top Game Platform For Men, Women Prefer The Smartphone And Tablet As Their Gaming Platform By Almost Double Over Men (Single mention – preferred gaming platform)
8 ©2013 Visa and Magid Associates
77% 72%
82%
Total Men Women
The Momentum In Gaming Is Towards Free-To-Play Games, 110 Million U.S. Gamers Are Now Playing More Free-To-Play Games, With Women Leading The Movement Towards This Model
Which of the following phrases best describes you?
• You are playing less free-to-play and more pay-to-play games
• You are playing more free-to-play and less pay-to-play games
• I play both types of games equally
9 ©2013 Visa and Magid Associates
The Majority Of Gamers Are Now Playing Free-To-Play Games
110 Million Gamers
13 Million Gamers
21 Million Gamers
Free-To-Play
Pay-To-Play
Equal
10 ©2013 Visa and Magid Associates
How much money did you spend on Free-to-Play games last month?
$13.38
$4.84
$0.00
$5.00
$10.00
$15.00
$20.00
Men Women
Men Spend Nearly Three Times More Than Women On Free-To-Play Games.
11 ©2013 Visa and Magid Associates
How much money did you spend on Free-to-Play games last month?
$12.85
$17.43
$6.91 $6.89 $6.26
$0.00
$5.00
$10.00
$15.00
$20.00
13-17 18-24 25-34 35-44 45-54
Young (13 – 24) Are Driving The Overall Average Money Spent On Free-To-Play Games.
12 ©2013 Visa and Magid Associates
How much money did you spend on Free-to-Play games last month?
$19.94
$30.54
$9.38 $8.60 $6.66
$5.03 $3.95 $4.04 $5.16
$5.93
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
13-17 18-24 25-34 35-44 45-54
Men Women
Young Men (13-24) Dominate Women In Average Money Spent On Free-To-Play Games
13 ©2013 Visa and Magid Associates
How much money did you spend on Free-to-Play games last month?
$30.54
$3.95
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
Men Women
18 – 24 Year Old Men Are Spending Nearly Eight Times What Women Do Per Month on Free to Play Games
14 ©2013 Visa and Magid Associates
How much money did you spend on ________?
$9.15
$28.86
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
Free-to-Play games Pay-To-Play Games
However, The Average Money Spent On Pay-To-Play Pay-To-Play Games Is Three Times Greater Than Free-To-Play (Based on those play each type of game)
Free-To-Play is skewed lower
by the 46% who currently are
spending zero.
15 ©2013 Visa and Magid Associates
How much money did you spend on pay-to-play games last month?
$34.53
$22.59
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
Men Women
Men Are Driving The Total Dollars Spent On Pay-To-Play Games
16 ©2013 Visa and Magid Associates
How much money did you spend on pay-to-play games last month?
Pay-To-Play Games Monthly Average Remains Steady Among 25 To 54 Year Old Gamers
$34.29
$46.69
$22.81 $23.79 $24.39
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
13-17 18-24 25-34 35-44 45-54
17 ©2013 Visa and Magid Associates
How much money did you spend on pay-to-play games last month?
18-24 Year Old Women Outspend Men On Average Money Spent On Pay-To-Play Games
$48.60
$37.52 $36.74
$27.29
$23.61
$13.24
$58.26
$8.27
$20.29
$25.18
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
$45.00
$50.00
$55.00
$60.00
13-17 18-24 25-34 35-44 45-54
Men Women
18 ©2013 Visa and Magid Associates
Little Differences In Imagery Exist Between The Types Of Games Other Than “Better Quality” Is Owned By Pay-To-Play. Parity Exists Between The Game Format On The Image Of “More Fun To Play”
13
13
19
20
21
22
26
35
17
19
18
25
41
40
52
49
41
40
20
13
13
12
19
13
Has the games that get better criticreviews
Has better quality games
Allows you to play with your friends
Has the games that are more fun to play
Has the games your friends are talkingabout
Has a wider variety of games
Free-to-play MMO/Pay-to-play Both equal Neither
Regardless of which gaming model you typically play (free-to-play and pay-to-play games,) we would like you to
compare each on the following elements. Please check the box that you feel the model the statement best
describes. You can also check both or neither. Which gaming models is best described by the following
statements?
19 ©2013 Visa and Magid Associates
Over Half Of Free-To-Play Gamers Feel Their Games Are As Good As Pay-To-Play Games
Using the scale of 1 to 5, where “5” is “strongly agree” and “1” is “strongly disagree,” how much do you agree with each
of the following in your decision to play more free-to-play and less pay-to-play games?
16
16
35
41
35
39
42
35
35
37
20
17
11
5
2
4
2
3
1
3
The free-to-play games are as good aspay-to-play games now
The free-to-play games are moreavailable now on all your gaming
systems
You can control your spending better onfree-to-play games
Money is more of a concern to you now
Strongly agree Agree Neutral Disagree Strongly disagree
20 ©2013 Visa and Magid Associates
The Image Of “A Better Experience” Is Drawing Gamers To Pay-To-Play Games
Using the scale of 1 to 5, where “5” is “strongly agree” and “1” is “strongly disagree,” how much do you agree with each
of the following in your decision to play less free-to-play and more pay-to-play games?
9
13
18
24
22
25
31
35
40
44
40
33
16
9
7
4
13
9
4
5
You have more money now to spend ongames
You need pay-to-play games on thedevices you own
The best games are always pay-to-play
The gaming experience is better on pay-to-play games
Strongly agree Agree Neutral Disagree Strongly disagree
21 ©2013 Visa and Magid Associates
Key Factors In The Purchasing Decision When Buying Games
Using a scale of 1 to 5 where “5” is “a major consideration” when you buy a game and “1” is “not at all a consideration,”
how much do each of the following effect your purchase decision?
10
12
13
15
23
31
39
34
30
42
39
47
39
36
30
29
25
28
20
20
17
12
12
9
8
4
4
2
13
16
10
9
6
6
5
The ranking of a game you see or readabout
Whether I can play it with my friends
User reviews
The ease of buying the game
Friends’ recommendations
The genre of the game
The price
Major consideration A consideration
Neutral Not a consideration
Not at all a consideration
22 ©2013 Visa and Magid Associates
Which of the following video game genres do you play on _______?
16%
17%
20%
21%
24%
26%
27%
27%
29%
31%
33%
38%
43%
Music / Rhythm Games
Simulation Games
Games on social networking sites
Free web based casual games
Sports Games
Action/Fighting Games
RPG
Racing Games
Adventure games
First or Third Person Shooter
Games on a smartphone or tablet
Arcade Games
Strategy
Top Genres Played
23 ©2013 Visa and Magid Associates
Which of the following video game genres do you play on _______?
47%
35% 37% 33% 35% 33%
13%
23% 15% 21%
15% 13%
First Or ThirdPerson Shooter
Adventuregames
RPG Racing Games Action/FightingGames
Sports Games
Men Women
Men Play Shooters Three Times More Than Women And Over Twice As Much Play Time On RPG, Action And Sports Genres Than Women
24 ©2013 Visa and Magid Associates
Which of the following video game genres do you play on _______?
32% 25%
16% 9%
46% 43%
27% 31%
Arcade Games Games on asmartphone or tablet
Free web basedcasual games
Games on socialnetworking sites
Men Women
Women Are More Than Three Times More Likely To Play Games On Social Networking Sites Compared To Men
25 ©2013 Visa and Magid Associates
Robert M. Crawford, Ph.D.
Vice President, Research
One Research Center
Marion, IA 52302
playspan.com/gdc2013
Download Report -
Robb Lewis
Director of Marketing and
Consumer Products
PlaySpan
[email protected] @robblewis
26 ©2013 Visa and Magid Associates
Extra Slides
27 ©2013 Visa and Magid Associates
Are You Prepared For This?
Gamers are becoming more mainstream each day. Currently more than
eight in ten consumers can be classified as a gamer. Gamers exist
within all demographics groups – this is not a 13-34 year old male
experience.
Does your game account for the changing demographics of the gamer?
The mobile platform is beating the more traditional platforms (computer
and consoles) for a gamer’s primary play. Women have fueled this
growth.
Are you in the business of selling games or selling the platform and the
game?
Gamers who prefer the smartphone platform, have almost completely
left MMO as a gaming model.
Can you survive by focusing on the young male demographic driven by
console and computer platforms? Are you evaluating developing games with
business models that reach mobile free to play?
28 ©2013 Visa and Magid Associates
How much money did you spend on Free-to-Play games last month?
$26.11
$4.39
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
Men Women
13 – 24 Year Old Men Are Spending More Than Six Times What Women Do Per Month On Free-To-Play Games
29 ©2013 Visa and Magid Associates
Hours Spent On Platforms Playing Games (Based on those who use platform most often)
How many hours a week do you spend on ______?
10
10
15
25
41
10
14
14
14
10
9
24
27
19
14
15
13
24
21
23
23
25
20
43
26
33
33
18
16
Handheld
Tablet
Console
Smartphone
Computer
Basic Computer
20+ 16-20 10-15 5-9 Less than 5
30 ©2013 Visa and Magid Associates
How many hours a week do you spend playing _______?
3% 5% 10%
22%
49%
5% 5% 1% 2% 4% 8%
36% 39%
9%
20+ 16-20 10-15 5-9 Less than5
None DK/NS
Free-to-Play games Pay-To-Play
A Surprising Four In Ten Gamers Admit To Not Playing Pay-To-Play Games
31 ©2013 Visa and Magid Associates
If you could keep one free-to-play game, which one of the following would it be?
6% 6% 6% 5% 3% 2% 2% 1%
No Free-To-Play Game Stands Out As One They Would Really Miss
32 ©2013 Visa and Magid Associates
If you could keep one paid title, either a full game price or subscription MMO, which one of the following would it be?
21%
10% 4% 4% 2% 2% 1%
Call ofDuty
Halo 4 Minecraft World ofWarcraft
Diablo III StarCraftII
GuildWars II
Call Of Duty and Halo 4 Are Most Likely The Pay-To-Play Games That Would Be Missed