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![[ IGDX 2022 ] The Payment Models for Games (and the undisputed dominance of mobile in Asia) with Jun Shen, Louis Chow and Darang Chandra](https://cdn.gamerbraves.com/2022/10/igdx-insights.jpg)
Considering the many, many live service mobile games that are released – and the reality that just as many also get shut down – they are, nonetheless, still quite a dominant force in Asia. On their IGDX 2022 panel, Insights and Trends on Premium, Freemium, and Subscription Models, Jun Shen (Microsoft Xbox), Louis Chow (Riot Games) and Darang Chandra (NIKO Partners), break down several parts to this segment of the gaming industry.
MOBILE IS KING IN ASIA
Danang kicks off the panel showing the numbers: free-to-play titles dominate the market, more so on mobile where 98.7% of revenue is made through in-app purchases over one-time payments for Premium titles. With almost twice as many people being on mobile compared to PC, this seems hardly surprising. When it comes to average weekly gaming hours spent, these people are also on their smartphones much more than their console or PC counterparts.
Interestingly, in the top 10 game markets in Asia, 6 of them are Southeast Asian, including Indonesia and Malaysia. The projected growth for total revenue and player numbers for both mobile and PC is likely to only increase further over the next 4 years, which can only cement how much of a juggernaut the mobile market is in Asia, when compared to the West. The West also tends to have more negative sentiments towards a mobile title, so it would be interesting to see if this mindset changes over time.
THE PREMIUM MODEL
Increasing accessibility to premium titles is what Xbox Game Pass is meant to do, as Jun explains. People get to play premium games at a low cost, working similarly to the “freemium model”. From the data, players in Japan, Korea and China often play games in their own region, so a similar strategy is being applied to Southeast Asia by including more regional titles to the Game Pass for players to be “exposed” to closer-to-home creations.
Louis adds the Game Pass is also able to expand the market size. Even if certain games on it may not necessarily be someone’s preferred genre, they wouldn’t mind if they can simply access it for free. It’s a win-win situation: people are more open to try new games, and developers can be more confident in marketing their game. However, it’s likewise worth noting that people’s expectations for games have skyrocketed: Genshin Impact is a primary example, with how the game is available for free yet the experience is akin to a premium game.
It can ultimately come down to ownership, which is what premium games can offer. Whether in digital or physical form, players can have the game remain in their library with less of a worry that it might one day be shut down when it is no longer profitable. Names like Naughty Dog, Santa Monica Studio, have pedigree attached to them, offering incredible experiences through their premium titles. Mobile games can have high production values, which then becomes a matter of what’s that something special the game can provide.
PREMIUM’S PROS AND CONS
When speaking about the pros and cons of the three game models, Louis talks about how premium games have a very high chance to reach a wider player base even without a high marketing budget, as players do tend to notice games that grab their attention with high quality graphics and gameplay. That said, developers do need that content flow plan on releasing their premium game. Consistency or proper planning is needed as many players do tend to move on to something new if no updates come within a month or two, which can be a huge loss to not follow up on a game’s initial success.
It’s also worth mentioning that you should have a good game first before implementing a particular payment model. It’s even more crucial to premium games as it needs a good gameplay loop to support long term retention to have players coming back. Danang brings up Uma Musume as an example: it is an incredible success in Japan, but the Korean version had been suffering from lack of content and localization quality, which in turn upsets the player base. A healthy community is one aspect to remember and not have a certain group feel discriminated against.
PRICIER AAA GAMES
In wrapping up, Jun brings up the price increase for AAA games. He calls it an “interesting” situation: despite the profitability of the game industry, the macro economic factors as a whole and the rising cost of labour means things then become more expensive to make. Developers need to find that way to remain sustainable while being able to make games to their vision.
Fortunately, there are also more ways through which developers can find support, including platforms such as Game Pass which offers an alternative form of monetization. The freemium space is heating up, and can only grow from here.
There’s certainly advantages and disadvantages for choosing any of the payment models laid out here. For Asia, at least, the highest revenue potential is clearly the freemium model, though as mentioned, you should have a good game as a base even before you start thinking of how to monetize it. Not even a highly popular franchise’s freemium game can escape a downfall should players simply not choose to engage or pay, like the ill-fated FFVII: The First Soldier.
It can be high risk high reward if taken that way, so developers will need to do due research to ensure they utilize the best model to apply to their own work.
