Games as a Service: A Detailed Analysis of a Promising Strategy
More developers are taking a closer look at a Games-as-a-Service model now. It features seasonal content placement and endless layering of updates. GaaS may turn out to be more beneficial for both developers and users. Let’s look at how it works.
Why mobile game developers should take a closer look at GaaS
Games as a Service (GaaS) is a middle ground between customers and game developers. Players know that a new season will come and their adventure will continue while game developers feel more stable and have more opportunities for long-term planning.
Market research shows that the GaaS strategy reduces costs of acquiring new customers and retains users better than pay-to-play games. Though, this experience is related to console and PC games. And what about the mobile industry? Spoiler: It’s complicated.
Along with paid gaming apps, App Store offers a comprehensive Arcade subscription, and Google Play has Google Play Pass. The free-to-play model with in-game stores has long proved to have left pay-to-play games behind, but now we can say that the latter is evolving. GaaS can be considered a new stage of it.
What’s Games as a Service (GaaS)?
GaaS most often refers to the type of games whose part you can get for free. They have enough content for users to try out the gameplay and basic mechanics. Developers can earn from subscriptions and in-game stores. New seasons with subscription-based unique content is the major sales driver.
In fact, the formerly popular Pay-to-Play approach eliminates the opportunity to earn from a game once sold. Even in-game stores can only sell cosmetic items (that is, items that don’t affect the gameplay in any way and are only aesthetic in nature). If store items ever go beyond the limits, it usually results in negative reviews and affects the churn rate. Users don’t take it well when offered to buy extra game elements “to make the game complete” once they’ve paid its full price.
In other words, GaaS is good at monetizing games in the long run, because it helps make a profit every new season. Developers’ imagination and release schedule are the only limitations here.
Expecting new content at all times is closely related to engagement.
Seasonal content distribution also has a positive effect on user retention metrics. If, for some reason, a player doesn’t log in for some time, there’s always a chance that they will return when the next update comes out.
How GaaS is changing the gaming industry
GaaS is influencing today’s gaming industry more than it seems at first glance. This strategy changes how we approach both game development and content consumption.
For developers who choose GaaS, it’s an opportunity to avoid making another ‘franchised’ game every year and spending on promotion and user acquisition.
This approach opens up new perspectives for budget planning and understanding your audience. Each GaaS-based project is, in a certain sense, a sandbox that helps you collect the most successful mechanics through trial and error. How often paid updates or seasons are going to be released is up to the developer.
In-game stores are the most interesting option business-wise. GaaS removes the taboo of getting OP for money, but avoids turning a game into a pay-to-win quest either. That is, in-game purchases don’t make anyone superior to others.
Most often, they only help players save loads of time usually spent at leveling up. The balance still goes first: those who choose to pay shouldn’t get anything that cannot be achieved by consistent playing.
A more stable retention rate has shown that users are ready to spend more time in GaaS-based projects, so it’s not surprising that developers started making use of the cloud gaming perks. Now you can play from anywhere and on almost any device. A super successful project by Chinese developers, Genshin Impact, can be considered a GaaS flagship. This open-world RPG is available on PC, PS4, PS5, iOS, and Android.
Players have full access to the lore; new seasons and festive game events are added for free every now and then. Genshin Impact offers a subscription to advanced characters who have more chances to accomplish end-game activities. Besides, there are several in-game currencies that you can get with no donations.
In terms of content consumption, GaaS projects don’t really aim for an endpoint adventure. Such games are not story-driven, they focus less on plot twists and more on replayability and procedural rhetorics. We can see a similar situation in the market of TV streaming services.
The gaming industry today is moving towards series rather than franchises.
Microtransactions and in-game currencies in GaaS
We’ve already partially touched on the topic of in-game purchases and the balance that developers need to maintain. Game stores most often employ two models of sales:
- Direct microtransactions;
- Loot boxes or randomizers.
Microtransactions are a business model that offers customers to pay for a shift in opportunities. Most often, it can be some virtual items or an option to unlock new features. As a rule, those items have aesthetic effects only. Microtransactions are unique because they shouldn’t feel like full-fledged purchases to users, so that players can choose items they like in every update.
Loot boxes are a random set of items of unknown value. Modern marketing strategies say more often now that users find it important to know a chance of dropping rare items by category. For example, in games with “classic” 5 types of item rarity, balanced drops may look like this:
Genshin Impact went a step further and implemented a guaranteed win system. Each spin of the wheel of fortune increases the chance of dropping the rarest items. This decision has a positive effect on retention rate as it encourages the players to believe that, sooner or later, they will get the loot they want.
What can serve as a textbook example of when loot boxes almost killed game monetization? It’s not Star Wars Battlefront 2 but Electronic Arts’ marketing failure that is the winner here. The company tried to sell a game with no content so that users would spend 100-200% of the full price to unlock it.
Due to the fact that not all mobile games can deal with this mechanic, loot boxes have earned themselves a bad name. Loot boxes are believed to trigger gambling and gaming addiction in children, and this kind of monetization system can be banned in entire countries.
Of course, some players don’t like that those who pay more move faster. A developer’s task is to create a balance that would depend not on what you can afford but on how good a gaming skill you have.
Common ways to sell mobile games
Paid new content
Unsubscribed players may not be able to access new maps or characters, season-related updates, or unique items. Skipping a season can render your items useless, so you don’t want to drop out.
Maybe the most popular model today is using events like Chinese New Year, Valentine’s Day, or a game’s birthday to sell items through in-game stores. At those times, event-themed items come out and graphic ASO gets updated.
New updates are often provided free of charge now so that users can try out the mechanics and delve deeper into the game.
In-game currencies
Earning crystals has already become a meme.
In-game currencies have walked a long way from those same crystals to extensive currency systems. For different types of events, players can receive a specific and unique type of currency. In-game currencies serve various purposes and have various ways of replenishment.
The mechanics are closely related to retention rate, as they encourage users to explore all the content.
Game bundles
Game bundles are a ready-made set of several games, which are usually offered with a discount. The game bundle mechanics are, of course, more inherent in console and PC gaming because the stores can combine products on their own.
In mobile gaming, new games by the same developer are more likely to be sold in-game. “Have you completed this campaign? We have more adventures to offer!”
Multigaming platform apps
Some gaming platforms offer a large number of games that users can play once they download an app. Some of those platforms offer the users to earn from playing, which makes an interesting new trend in the gaming community.
WinZO and BaaziNow are among the most popular multigaming platform apps.
In-game ads
With an intensive and rapid development of the industry as we see it today, games are becoming a more attractive platform for advertising. In-game ads make it possible for game developers to expand their revenue sources even beyond a Games as a Service model. Today’s ads are not necessarily annoying banners; on the contrary, advertisers are trying to offer visually appealing and memorable content, sometimes even styled after the game in question. Videos are one of the most common ad formats.
You can read our detailed post about how in-game ads work.
Conclusion
With the rise of GaaS, the gaming industry has changed its approach to both content creation and content distribution. Striving for higher retention rate, the mobile gaming market has greatly influenced the PC and console gaming market, forcing it to adapt and move from increased private copy sales to continuing revenue coming from a single product.
GaaS is so successful and promising that it already works as a sandbox for new strategies of interacting with players, which would be financially comfortable and beneficial for both users and developers.
The GaaS philosophy is to make games more accessible to users and more profitable for developers.
