Why the video game industry valued at $183 billion

The video game industry cannot abandon microtransactions.Why the video game industry valued at $183 billion…..?

In fact, two of the largest video game companies in the United States — Electronic Arts and Take-Two Interactive — now earn the overwhelming majority of their revenue from live-service games, subscriptions, and in-game purchases, as indicated by their recent earnings reports.

Users make purchases inside a game using real money, which appear as subscriptions, virtual currencies, and character customization options, among others.

Popular live-service titles such as Fortnite, Call of Duty: Warzone, and Clash Royale have been designed around this revenue model.

Game publishers must provide updates throughout certain game life cycles to maintain player engagement, which is where the term “live service” originates. Gamers pay for these updates through season passes or subscriptions.

Why the video game industry valued at $183 billion remains entrenched
Why the video game industry valued at $183 billion

The video game industry had to adjust its approach to in-game purchases due to backlash from early attempts. This led to a shift towards subscriptions and bundling purchasable content.

“The industry has really shifted towards what they call a battle pass system, or some kind of packaging of seasonal content,” said Mat Piscatella, executive director of video games at Circana.

“These systems have received much warmer response because people find that they’re getting more value, and more reliable value for their money.”

In-game spending has become both a contentious issue and a lucrative business. Electronic Arts’ live-services operations generated $5.6 billion in revenue in its most recent quarter, according to the company’s latest earnings report.

Epic Games, the creator of the popular Fortnite franchise, sued Apple over an in-game payment system released inside Fortnite to circumvent Apple’s App Store fees. In Europe, app stores and loot boxes are significant focal points for tech regulators.