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Monetization of Games Done Right

Game monetization is primary concern for most developers these days and the ideal solution is yet to be found.

Ivan Dimitrijevic, Blogger

March 16, 2016

20 Min Read

Video games are one of the most powerful and lucrative branches of the entertainment industry. Like anything in the entertainment industry, some games have greater artistic value, some of them are simply expensive because they have high production value, and some are just manufactured for the sole purpose of extorting money from the gaming community.

One thing that separates games from other art forms is the superior aspect of escapism – some of them are so compelling that you can spend months, or even years playing them. These are usually games that feature a vivid alternate reality, where you have complete control over who you are, worlds in which your actions truly matter, games that resonate with that unique inner being and mindset that make us special, heroic and superior to others etc.

Due to this design, where one has greater control over the outcomes of his or her actions, it is quite common for underachievers to seek escape in the world of games. Moreover, with the arrival of multi-player online games, this community managed to grow and form its own culture, making gaming even more compelling.

A common misconception is that games cause addiction. Allow me to clarify this, in order for something to be classified as an addiction it needs to trigger a chemical reaction inside the brain and no game does this. A game can grant a sense of achievement, and therefore be incredibly compelling, so realistically speaking it causes compulsion, not addiction.

Yes I am aware these are somewhat similar, but one turns to gaming as the means of escape, due to the lack of motivation to deal with more serious problems. Another reason why games are compelling is because they implement the Skinner box method to habituate the process of playing a game. This will be elaborated further in another section.

Games do possess a great deal of positive traits, but just like any art form, they can be exploited for the purpose of monetization. This kind of perspective is ultimately shepherding the medium in the wrong direction. Nowadays, game developers are viewing gaming experience and monetizing experience as two separate entities, whereas they should be unified. The ultimate goal should be to make a game that will inspire the player to buy it, not to make a game that forces the player to keep spending money. In order to do so, we can learn from our past mistakes. The following article will examine on which aspects of monetization the current model has failed to deliver, and provide possible solutions to this problem.         

Free 2 play model

Currently, the most popular monetization model are the so-called “Free 2 Play” games. The company does not earn any money by selling the game, but rather relies on the player’s good will to spend money and unlock various in-game features. The concept is ideal and gamers generally love this model, however, the majority of current free to play games are desecrating this ideal. As mentioned, a great number of current free to play models force players into spending money. It is as if an accountant was in charge of the design, not a qualified game designer.

Here is how this mode of Free 2 Play games forces player to spend their money:

  • After investing 20 hours into game, the player hits a barrier which can only be overcome by the unstoppable force of credit card payments. Player has already invested time and effort in the game, so they opt for paying further, because they feel that their time investment is completely wasted otherwise, which is known as the sunk cost fallacy;

  • Playing an online multi-player game that offers power and supremacy over other players, if you spend money. These are what we would call “Pay to Win” games;

  • Playing a game that has an energy system that limits the time you can spend playing the game, and if you want more energy you either have to spend money or invite other players and expand the community.

The first two ways ultimately result in a game’s failure, and the third example will be tackled later on in the article. The first one will simply force the player to pay money one or two times, and no player is happy to do so. This only results in repressed resentment towards the game, and as it pushes the players to spend money, the player eventually leaves.

The game loses its community, but it managed to get enough money, so the developers have enough resources for the next project. This is basically a hit and run method, and you cannot fully blame the developers – after all, if we allow ourselves to be manipulated this obviously, it is no wonder they continue to do it over and over again.

The other type of monetization, the one that sells power in the online multi-player game, is also lucrative, but its course is set for collision. These games are not after one or two microtransactions to make the gaming experience better for the player. These games are on a so called “whale hunt”. Whales is a term used for heavy spenders, people who are willing to pay large sums of money to acquire greater power and superiority in the game.

Since the game is competitive, and people who spend money are rewarded with power, no amount of skill can help you against them. Basically, you create a world where one can achieve godlike power as long as he or she pays for it, and you are pressuring other players who want to compete with them to spend money as well.

It is no lie, as a species we have this lust for power, its intensity may vary from person to person, but we all have it. However, allowing Lionel Messi to compete against pre-school football players does not make for an interesting match. It would be very frustrating for the kids on both teams to have someone who can completely overshadow them and win the game on his own.

As designers, these people are consciously exploiting the worst part of our psyche, and these types of games should be abolished. Moreover, in order for this to work and for the player to feel powerful your game needs a community, and if someone runs around and bullies others, most players will leave, so these whales will end up playing in ghost towns.

Another Free 2 Play model  

We are all fully aware that the previous model is essentially wrong, since it does not sell good experience – it sells bragging rights, and blackmails people into paying money to explore additional content. In order to avoid these negative impressions, other Free 2 Play games went the extra mile, and designed their games differently, which ultimately resulted in a lack of revenue.

The games I am referring to are puzzle games, or games where you advance by solving problems. The payment option is introduced for the purpose of solving a problem or a puzzle and advancing faster. These games, however, are played for the sake of challenges – it is the problem or mystery itself that drives the endeavour.

In other words, if you pay for advancement you lose valuable gameplay experience, and players are actually motivated to work on this difficult solution. As a result, you make a great game for free, and earn very little income. This is bad for the entire community as well, as developers do not have enough resources to sustain their game.

Players keep on playing as long as there is content available, but eventually the game shuts down, even though it was great. Developers do not need to do this. If you can create a quality game, do not pamper to the needs of players who think they are entitled to a free experience. If you are creating a quality experience for the users, feel free to monetize it – there is no reason to try to be a hero, because it only leaves you jobless.            

Skinner box and energy system

Here we will look at how the whole habituation process is used as tool for monetization, and how mechanics and design can create a compulsion for a continuous and lengthy play session.

What is a Skinner box?

A Skinner box or operant conditioning chamber is a scientific device used for studying animal behaviour. It was created by B.F Skinner for the purpose of studying classical and operant conditioning. Basically, an animal such as rat or pigeon is placed in isolated box with two levers, the box is soundproof, so that there is no other external stimuli.

Once the animal presses the right levers or right sequence of buttons, it is rewarded with food and water, which serve as reinforcers. As a result, the animal keeps on pressing the buttons, since that kind of behaviour is rewarded via means of unconditional stimuli. Ultimately, this sort of repetition creates habits, or habituates this repetitive process.  

Now, these findings can be applied to human behaviour as well. Of course, we are more complex than animals, so no one tries to contain us within a box with levers or buttons. However, as living beings we are susceptible to habitation, and this trait is used for the purpose of effective marketing. When we receive a coupon for Starbucks, for example, to receive a discount for the following week or month, we opt for Starbucks as our provider.

What we don’t know is that we are subconsciously creating a habit to visit Starbucks first thing in the morning – it simply becomes a part of our routine. Also, we continue to be rewarded as regular customers, and thus choose not to change providers. This is how brand loyalty is born. When it comes to video games, the designers use a so-called energy system to habituate continuous play.

So, you can play five games on a Facebook app, and you need to wait for an hour until your energy refills, but if you don’t play all the time, the bonus that can be used for an energy refill is wasted. This is why we choose to go online on an hourly basis for the sake of maintaining optimal efficiency.

This makes us focus on the game, think about our login time and, in the end, it becomes our habit. Blizzard’s “World of Warcraft” did this a bit differently. Players who rested or were offline for a particular amount of time, received an EXP gain bonus to make up for lost time,  but the bonus also had a plateau. By not logging in for two days you lose efficiency, and once you’ve reached the final level, you were required to do daily quests. So, by not going online for more than a day, you also lose efficiency.

People are generally irritated when they allow this to happen, so they continue to play, despite the fact they are no longer entertained. Of course, these games had a way of replenishing the energy supply by either paying money or recruiting other people and expanding the community. Then friends can send gifts to one another and continue to play without paying. Personally, I have no issue with this model. If the main source of revenue comes from advertising during the loading screen etc. then simply using mechanics to expand the community is not such a bad thing, as long as the players still enjoy the game. Moreover, some of these games had to have these energy systems in place, because the players would simply storm through the continent in one or two days without them. This energy system also served as a mechanism to buy some time for developers to create new levels.  

I can only say this energy systems is justifiable in the case of content shortage, because it can be risky to fully invest your efforts in one game without any guarantee that the audience will like it. However, as long as you keep the system, it means you lack the creativity to produce an innovative game, so you rely on tricking people into playing.

I also support the recruit a friend incentive, as long as it is not forced on the player, like in many games we see today. These are the reasons why gaming is losing its potential. People have stopped developing so-called “prime games” (games with unique  mechanics). The majority of games are just recycled old, but compelling games, polished to the point where they can outshine the original.

A true designer needs to push the boundaries, experiment and have enough courage to experience failure if necessary. I know this sounds too idealistic, but if the kind of money-grabbing behaviour that we have been seeing more of lately goes on, the true potential of gaming as an artistic medium will never be realized, it will never be globally recognised as an art form, and its community won’t be taken seriously. There will never be ceremonies like the “Oscars” for the gaming industry if we don’t change something.           


Microtransactions are without a doubt the best model of game monetization so far, but the problem is that a great deal of games fail to execute it correctly. Korean MMOs have so far proven to be the paragons of good micro transaction payment systems, yet most of the industry has botched attempts of successfully implementing it. To make things worse, players actually accepted this utterly flawed model, and spent money on it, so it won’t go anywhere anytime soon.

The original design was meant to be globally accepted for both big and small spenders, but as mentioned, the developers went on a whale hunt, which ultimately led to games dying out. Here are some basic micro transaction tips, or better said, guidelines on how never to monetize your free 2 play model:

  • Never sell power (I already mentioned that at the beginning). It makes a great power gap between the players, causing the majority of your community to abandon the game. Since the players are an important part of the game, without the vast majority of your player base the game eventually dies;

  • Don’t sell cosmetics at an incredibly high price. Cosmetics is one thing you should definitely sell as a part of a free 2 play model. However, selling avatar accessories, or player icons at an absurdly high price, say $15, is a big no;

  • Separating your community (players who pay, and those who don’t), is another tragic mistake. I will elaborate on this further later on;

  • Limiting the in-game currency that the player can obtain. Again, you should allow players to earn everything, but make the grinding process extremely tedious. If a player doesn’t feel he or she is forced to pay, that player is more likely to spend money.

The first rule was already covered in one of the previous sections, and the second one is actually common sense: don’t sell something that you yourself find absurd. Now, let us focus on the third and fourth example, in order to build a good micro transaction system.

Player community    

When it comes to MMOs, there are four types of players: Achievers, Explorers, Socializers and Killers. Of course, no one is strictly limited to the traits of one mindset, much like with the temperaments – Melancholic, Sanguine, Choleric and Phlegmatic. Here are some distinguishable traits of each player personality:

  • Achievers – they focus on in-game achievements and goals. Going through the content, battling bosses, grinding for gear, and building a perfect version of their characters. They focus on efficiency, and they love it when their devotion is rewarded;

  • Explorers – they focus on in-game content, they love to go through every nook and cranny, are impressed by the design, and love to be encouraged to take a different approach. They also discover in-game shortcuts, Easter eggs and hidden rooms. Explorers synergize quite well with achievers, who also crave power, but are not willing to invest time to explore the world;

  • Socializers – they love the social aspect of the game, interacting with the community, discussing the game itself, being in charge of forums. Basically, they participate in the community even outside of the game. Now, with websites like Twitch, where streamers from all around the world play and interact with the audience, making a game for socializers is much easier;

  • Killers – they thrive on killing other players, and asserting their dominance, so they start as achievers, but their goal is dominating the PVP system.

This categorization, also known as Bartle’s Taxonomy, was done by psychologist named Bartle, who wanted to know what the players expect from their game. In other words, if you are able to make a game that caters to all of the aforementioned types of players, you will be able to make the game more compelling. This also help in single player design, since it allows you to focus on one type of audience.  Basically, the game needs to allow players to act within the world and interact with the world, to act with other players and interact with other players.

Once you have a game that is compelling for the community, your micro transaction system should strive to retain them, and at the same time earn you money. You should also have a system that prevents the game from overpopulating with one category of players. For example, too many killers can make the game harder for explorers, or achievers. Sure, they provide an additional challenge, but being killed too many times can become a nuisance. Once again, Blizzard’s World of Warcraft managed to build a perfect system to keep all the players in check.

Now back to the topic at hand, a proper micro transaction system to retain the community. It was mentioned that the community should never be separated, and there is a good reason for that. If you separate the community the players may feel like they are being bullied to pay, just like with the whale hunt. So, if the players are allowed to interact with other players who pay, they are more likely to spend their money on the in-game perks.          

Return of the arcade

One of the possible ways of monetizing is returning to the way of the arcades. Yes, it is what caused the arcades to stop existing, but we can do it better this time. The implementation will be rather simple – the amount of money you pay for playing the game determines how many lives you will have. This is what pushed players to hone their skills and master the whole game to the point where they can go through it without dying. The problem was that the machines were rigged, so that it was predetermined whether you were going to live or die, once you reach a certain level.

The problem with this sort of monetization is that it cannot be applied to all types of games, for example, point and click adventures. However, games like first person shooters (FPS), online multiplayer shooters, racing games, fighting games etc. all can benefit from this monetization model. All of these games should havean option to be bought and played as regular games, but the arcade method of monetization allows the players to play it online, for a smaller amount of money.

Sure, in the long run, it is more profitable to buy the game, but maybe players aren’t quite sure whether they want to buy the game in the first place, so they’ll give it a shot in the arcade mode. Also, maybe someone is not comfortable paying a larger sum of money for the game, and then continue to pay for each DLC that comes out, and the arcade would eliminate this option.    

Another issue with this model of transaction would be the game difficulty. If the game is too difficult people might not want to give money in there first place. On the other hand, if the game is too easy, the developers will not be able to reap returns. Also, developers and publishers need to decide what amount of money will be charged for one life, but the difficulty of the game should be used as a determining factor.

So, even if the method isn’t perfect, it still does not extort money from consumers like the free 2 play model, since this does not prevent players from accessing content, unless they pay more money. The method encourages the player to get better, and spend less money on the game.      

Rental digital games

This is probably a better method for monetization compared to the previous one. Here’s how it would work. If a game costs $60 to be purchased, anyone should be able to rent it for $5, for 5 – 6 hours. Then, if a player decides to buy the game at any point, the $5 dollars that were paid for renting would be subtracted from the total price.

There is  a good reason for this. First of all, a lot people won’t buy a multi-player game if they have to play it all by themselves, but it is something they would gladly rent when their friends come over. So, racing games, fighting games, or dancing games on Kinect would see a lot more revenue if this option existed.

Secondly, people would rather see the game first, before paying a full price, so no one will be scammed into buying something they do not like – they would simply pay $5 dollars and determine if they would like to pay the full price for these games. The PS store made a really good move by allowing for the games to be rented rather than bought – all they need is to include the price subtraction, and this model will come to life.

This is also great for remastered games, since no one really wants to buy a game for PS4 or Xbox ONE that already exist for the previous console model, but they would gladly rent it just to see the glimpse of the remastered version and enjoy slightly better graphics.   


Monetization is one of the major issues in the gaming industry, and monetization plan has great impact on the game design itself. So far, the industry has implemented the plans that did not have a positive response. Now more and more people opt for digital version of games, but there is still no return policy, if the consumer is dissatisfied with the experience. We also have various types of content, like DLCs that are purchased after the release, and there are even financial barriers for those who buy used games.

All of these are serious issues that could use improvement, and I believe the monetization models presented here could mitigate the dissatisfaction of the community. I would also like to mention the YouTube channel called “Extra Credits”, which I used as inspiration for writing this article. They are doing an incredible  job of addressing the issues of the gaming community. Make sure you browse through their channel, as there are tons of great content that any gamer and designer will find interesting.    


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