The popularity and สัมผัสประสบการณ์บาคาร่าออนไลน์ profitability of free-to-play (F2P) video games has increased dramatically over the last decade. In 2017, F2P video games generated $82 billion worldwide (75.6%) Batchelor (2017) and some of them earn up to $2.4 million daily, Davidovici-Nora (2013). F2P video game developers charge small amounts of money, called microtransactions, to let players buy in-game digital items that enhance their gameplay experience and matchmaking.

However, little is known about how this new business model impacts consumer welfare. We propose a simple economic model that explains why companies prefer F2P over the traditional pay-to-play (P2P) business model and how changes in game balance influence consumers’ welfare. We find that the decision to switch from P2P to F2P in multiplayer video games reduces consumers’ welfare if network effects are strong, but it can increase consumer welfare if the premium bias in the game is moderate.

Balancing Act: The Economics of Free-to-Play Games

In addition, we show that the choice to increase the price of in-game items can improve consumers’ welfare by decreasing the value of these in-game goods. Moreover, policies that increase the quality of the in-game content also decrease the imbalance between free and premium players and can reduce the overall inequality in the video game.

Achieving optimal balancing between gameplay and monetization is one of the hardest challenges that game developers face. We hope that this article can help other video game designers understand the complexities of creating an in-game economy, and will be useful to those who wish to make their video games more attractive for both players and investors.