This mostly happens in the Chinese market because the culture of gaming is different. Chinese people would gain more satisfaction with the strongest character in the game than being the strongest player in real life. This is because if you spend money on the game, you can become the strongest no matter what skill you have.
This way, more and more Chinese gaming companies enter the market since there is a really low standard to enter because they don't need high quality but only popularity. Therefore, this market is a monopolistic competition because of the large number of firms and low entry barriers. In the game of those companies, some wealthy players would spend more than a million RMB which is more than a hundred thousand dollars in the game.
Newzoo projects the global video games market to be “on track for a decade of double-digit growth” from 2012 to 2021. In 2018 alone, 2.3 billion gamers across the world were expected to spend $137.9 billion on games, the market research firm said. As the graph is shown below, the Chinese Market is 1/5 of the world gaming market.
Even though, the market is easy to enter. The Chinese gaming market is still being dominated by two companies, Tencent and Netease. The graph blew is the mobile gaming market which is mostly done
In the United States a lot of gaming industries have been taken over by a skin craze, where players can pay for their items or character to look different in the game. Not many games you can pay for a direct benefit in the gameplay. It's interesting how this has become such a huge market profiting millions of dollars through games such as CS:GO and Fortnite. Even though the cost benefit of spending money on skins may seem low, people are willing to throw hundreds of dollars at games for cosmetics.
ReplyDeleteMy brother spends a lot of money on LOL to buy skin, but in LOL, the huge amount of money you spend on your skin doesn't mean you win more. But many popular games in China are card games. For example, many games in Netease are card games, which often means that the only way to get more advantage than other or "win" the game is to spend more money. So I think the reason for this is that there is a difference in the type of games that are popular between the two countries.
ReplyDeletePaying to play has been a key way that many video games make money. For instance, in NBA 2k20, players can choose to purchase VC, or Virtual Currency, in order to upgrade their player's attributes. Another concept to look at are "freemium" games, which generally are smartphone games, sold as free, but then in order to upgrade one's character in special ways, paying additional fees are required. One example of this is Clash of Clans, where players can pay extra money to upgrade their bases. It is also interesting to see the difference between American and Chinese gaming culture, as Americans tend to strive to be the strongest player in real-life, while Chinese gamers tend to strive to have the strongest player in the game. But this raises the question, if an individual is continually paying money to this game, then doesn't this take over the whole "game" aspect of it?
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