Game monetization is actually a topic that I take strong interest in (as a consumer) and have discussed at lengths with many different people (both fellow players as well as those working in the game industry) for various different games. So before I get into my thoughts on it, let’s step back a bit and take a look at why it’s needed and what kinds there are.

In a simplified model, game development involves two parties: the developer and the publisher. The developer (DelightWorks for example) is the game studio that creates the game. This includes the game engine, the graphical sprites, the promotional artwork, the sound effects, the voice overs, and much much more. Games usually take 1-3 years to make, sometimes even longer depending on the kind of game and the size of the studio. Lots and lots of people are involved from start to finish and put in tons of work and effort (especially in the game industry where long hours and weekend overtime is the norm), so as you would expect, the cost of development isn’t exactly a trivial amount. Once a game is done, it gets handed off to the publisher (Aniplex for example) who then takes care of promoting the game, running the game and, of course, figuring out the monetization model for the game. That monetization model needs to churn out enough money to cover the initial cost of development and marketing, the cost of maintaining the game servers, and of course a good margin of profit to keep the company running and growing so that there’s money available to invest into paying for future games or content updates. In other words, when a game launches with a monetization model, it’s not simply publishers just being greedy - part of it goes into cost recovery and future investments. If a publisher or game company doesn’t turn a profit, it stops making such kinds of games. Which means no more games like FGO for fans like us. A lose-lose situation. In other words, a truly free-to-play game simply cannot exist - monetization models are a necessary “evil” to ensure we get to play more and more fun games in the future.

With all that said, not all monetization models are equal. There are generally three popular types of monetization models for online games: 1) subscription-based (e.g. World of Warcraft), 2) one-time purchases (e.g Guild Wars 2 originally), and 3) microtransactions. Of the three, recent trends point to microtransactions being the most popular, both in mobile and desktop games. Why? Because most microtransaction games are “free”, and everyone loves free! Anyone can play it without having to spend a dime if they choose not to. But of course out of every 1000 free players, there will always be at least 1 who will be *willing* to spend a dime or more for all the snazzy in-game benefits. And unlike subscription-based and one-time purchase models, the *amount* of money one could spend is unlimited. More often than not, this amount will end up being far more than the amount one would have spent if it were a subscription-based game or one-time purchase. In fact, the amount those single players (often referred to as “whales”) will usually end up far exceeding the total amount multiple players would have spent through any of the other two monetization models. Instead of selling a single cosmetic item for $50 flat, for example, why not put it in an RNG box for $5 and watch as people spend far more than $50 trying to get it. Or put a rare waifu with a <1% roll chance in a gacha with no roll guarantees. This will usually upset a lot of people, but in the end, the wallets still come out. In fact, if you look at the revenue reports of any major game company over the past few years that sell both one-time purchase games as well as microtransaction-based games (EA, Ubisoft, NCSoft, etc.), you’ll very clearly see that revenue from things such as gacha rolls, loot boxes, DLCs, or other types of microtransactions drastically outperform other sources of revenue.

So in the end, most publishers end up going with the microtransactions monetization model for their games. These “free” games end up not being truly free. Someone inevitably pays for it and, while I personally dislike this model, due to my competitive/goal-driven nature, one of those people usually ends up being me. South Park actually had a pretty amusing (but accurate) episode on this.

tl;dr: Monetization models are necessary, but what type depends on the publisher. In today’s day and age, despite people’s hate against it, the microtransaction model ends up being the most profitable and will likely continue to be over the next few years.

Funny you mentioned South Park, because they just came out with a new mobile title with that exact business model…