PRICING STRATEGIES FOR ONLINE MULTIPLAYER GAMES

This dissertation examines the different pricing strategies available to online multiplayer game publishers. We develop mathematical models of the pricing decision that the publisher engages in and conduct a numerical experiment to identify critical parameters for the pricing decision. We also develop an agent based simulation to further examine the influence of these parameters on the dynamics between the publisher and consumers and make recommendations about the conditions under which certain pricing strategies are superior to others

Are secondary markets beneficial for a virtual world operator?

Selling virtual goods for real money has become the dominant business model for virtual worlds in the past decade. As the amount of money involved in virtual goods sales increases, market performance questions gain relevance. In this thesis, we examine the effects of secondary markets on the profitability of a virtual world service provider operating under a virtual goods sales model. More specifically, we ask whether the service provider should tolerate secondary markets or seek to kill them off. The structure of this thesis is as follows: we first review how virtual worlds operate as businesses and provide an analysis of the market conditions faced by a virtual world operator to provide sufficient context for the reader. We then examine the inner workings of virtual economies and review structures commonly encountered within them. Next, we conduct a literature review on real world secondary market models and analyses. Finally, we evaluate the implications of real world secondary market results on secondary markets for virtual goods. In the final section, we present conclusions and possible avenues for further study. We find that recent durable goods research suggests that a profit-maximizing monopolist will not shut down secondary markets, but will choose to reduce durability of goods instead and that these results can apply to virtual worlds as well. However, we also show that the question of allowing or not allowing secondary markets cannot be answered based on profitability alone and that service providers have to also account for externalities brought on by secondary markets

How Functional and Aesthetic Virtual Goods Influence The Purchase Motivations and Attitudes

Objectives The main objectives of this study were to examine the differences functional and aesthetic virtual goods have on motivations behind virtual good purchases. In addition, this study examined the differences in attitudes towards functional and aesthetic virtual goods. Summary The subject of virtual goods and purchases has been widely studied in recent years. However, most of the studies fail to distinguish the different type of virtual goods and their individual qualities that have an impact on the purchase decision making process. A questionnaire based on previous literature (Hamari et al. 2017) was conducted to examine these differences. The results show that when functional and aesthetic virtual goods are examined separately the motivations and reasons behind purchase decision vary significantly. In addition, the study reveals that the different types of virtual goods face different attitudes. Conclusions The motivations /reasons connected with making gameplay smoother and more pleasant were found to be an important factor for functional virtual good purchases. Moreover, social interactions, competition and economic rationale were deemed to be significant drives for aesthetic virtual good purchases. In addition aesthetic virtual good were deemed to face more positive attitudes than functional virtual goods

Exploring the Empirical Link Between Game Features, Player Motivation, and Game Behavior

This research-in-progress paper aims to propose a framework for predicting use continuance and subsequent in-game purchases in the context of online, free-to-play (F2P) mobile games. Using previous games research, we first propose Perceived Enjoyment (PE) and Use Continuance (UC) as the key predictors of Purchase Intention (PI). However, in order to extend the extant literature and generate practical insights for game developers into how to enhance the level of PE and UC generated by their games, we further explore the relations between a set of technical game features and their impact on users’ motivations for playing online F2P mobile games. Specifically, we look at three groups of features—connect, bonding, and share-in features—and test their effect on three key motivations underpinning perceived enjoyment in the context of digital game play, namely Achievement, Social, and Immersion motivations. Using data from a scenario-based questionnaire, our findings show that although all three motivations—Achievement, Social, and Immersion—result in greater enjoyment, and in turn, use continuance and purchase intention, only a single technical feature of the games—namely the share-in feature—triggers greater perceived immersion motivation. Implications for theory and practice are discussed

Investigating the role of eSport on the free to play business model: An analysis of league of legends economic success

ESport is a rising entertainment industry that has grown exponentially in the past decade. Competitions broadcasted online make eSport appealing for a large audience of video game enthusiasts, creating an opportunity for sponsorship deals. To this day, scholars have focused their efforts on understanding which are the motivations for people to watch eSport, and only scarce research has been made to measure how eSport consumption affects video game consumption. Filling this literature gap is the first objective of this study. Free-to-play games are a logical response to the shifts of the video game industry. A second objective is to investigate the determinants of free-to-play games profitability: while being free, these games generate their revenues through the sale of virtual items. League of Legends, a successful freeto- play game and leading player in the eSport industry, was selected as the context of this study. A quantitative questionnaire was distributed in eSport and League of Legends online communities. A PLS-SEM analysis revealed two motivations to watch eSport, (1) knowledge acquisition and (2) aesthetics. Such motivations drive the players’ perception of the game enjoyability and ease of use, this study being the first to establish these links. The model also confirms that customer loyalty predicts purchase intention of virtual items. Findings carry implications for a wide range of eSport and video game industry stakeholders and emphasize the importance of mentoring novices and rewarding the loyalty of existing players.O eSport é uma indústria de entretenimento em ascensão que cresceu exponencialmente na última década. As competições transmitidas online tornam o eSport apelativo para uma grande audiência de entusiastas de videojogos, criando uma oportunidade para importantes patrocínios. Até hoje, as investigações têm-se focado na compreensão de quais são as motivações para as pessoas assistirem ao eSport, e foram feitos poucos estudos para medir como o consumo de eSport pode afetar o consumo de videojogos. O primeiro objetivo desta tese é preencher esta lacuna na literatura. Um segundo objetivo é investigar os determinantes da rentabilidade dos jogos free-to-play: jogos gratuitos que geram as suas receitas através da venda de itens virtuais. Com esse propósito, esta tese foca-se no caso do League of Legends, um jogo free-to-play bastante popular na indústria de eSport. Um questionário quantitativo aplicado nas comunidades online de eSport e League of Legends foi analisado utilizando equações estruturais PLS-SEM e revelou duas motivações para assistir ao eSport, (1) aquisição de conhecimento e (2) estética. Estas duas motivações impulsionam a perceção dos jogadores sobre a capacidade de utilização do jogo, sendo este estudo o primeiro a estabelecer estas ligações. O modelo confirma ainda que a fidelização do cliente prevê a intenção de compra de itens virtuais. As descobertas têm implicações para uma vasta gama de intervenientes da indústria de eSport e videojogos e enfatizam a importância de orientar os novos jogadores e recompensar a lealdade dos jogadores existentes

A Conceptual Value Function to Explain the Benefits Derived from Users of Free-To-Play Video Games

Customers of free-to-play video games are becoming one of the largest and most lucrative consumers of entertainment products in America, and yet relatively little formal literature has been written about these users. Because this customer group is significant and influential within the video game industry, and because video games are becoming a popular and mainstream medium, understanding these consumers is important to understanding our economy, our culture, and for making better gaming products. This thesis will define a conceptual and qualitative value function that could help one better comprehend F2P consumers’ desires and needs in regards to free-to-play video games, and thus help one better understand this consumer group. To improve readability and to support this value function, the thesis will also provide a brief review of the video game industry, as well as details regarding game design and the market for video games. In theory, this model could be used to help a free-to-play developing firm understand their consumer base better and adapt their product to provide those benefits most appreciated by the primary users. Support and evidence for the model comes from both primary and secondary sources. Primary sources include a demographics survey administered through the University of Maine community in which 264 respondents participated, and email correspondence between the author and a video game developer. Secondary sources include data and information gathered from professionally published articles and journals, news reports, demographic reports, sales and market trends, and insight from industry professionals

Stochastic simulation framework for the Limit Order Book using liquidity motivated agents

In this paper we develop a new form of agent-based model for limit order books based on heterogeneous trading agents, whose motivations are liquidity driven. These agents are abstractions of real market participants, expressed in a stochastic model framework. We develop an efficient way to perform statistical calibration of the model parameters on Level 2 limit order book data from Chi-X, based on a combination of indirect inference and multi-objective optimisation. We then demonstrate how such an agent-based modelling framework can be of use in testing exchange regulations, as well as informing brokerage decisions and other trading based scenarios

Engagement and willingness to pay for short form animation content online

An understanding of engagement and value based on insight from the uses and gratifications framework shows that individual consumers have very different reasons for consuming the same media. As such each consumer will receive different meanings, consequences and levels of value from its consumption. Based on this perspective it is argued that different individuals will display a varied willingness to pay based on their level of engagement and value sought from consuming the content in question. Through the use of an online survey this study explores the differences between individuals who work or have a valued interest within animation (Insiders) and those who do not (Outsiders). The study focuses on respondents reasons and motives for consuming short form animation content to understand their level of engagement and subsequent willingness to pay. The results indicate that Insiders display a wider range of motives and gain greater value from the consumption of short form animation. Insiders also display a greater willingness to pay and willingness to pay more for such content. Therefore, results lend support to dynamic pricing models for creative works distributed online, which can capture the different levels of engagement and value perceptions of consumers. These dynamic pricing models may then go some way towards catering for both sides of what has previously been described as a "Fame vs. Fortune dilemma" and provide creators with a revenue stream that can aid future content production

Development of an industrial marketing framework for SME’s: a game industry case study

This study provides a complete coverage of the current status of the video game business and digital distribution through explanation of business models, and a focus on Finnish market with one case example. Literature review was done completely to provide a foundation for the reader to understand the business environment of Finland and how different parts of the value chain function. In addition to that, a case study was completed through an interview with a SME to present a practical example of the firm’s approach in marketing their product. To initiate this study, video game business in today’s world was analyzed followed by market and industry trends globally. Value chain in different aspects of the industry were discussed with factors and influential elements. Small and medium sized businesses were discussed along with their characteristics, after that different business models for video games were elaborated. In the final chapter, Finnish game market was through analyzed and the roles of different players and stakeholders were described. Video game business has evolved drastically in all aspect from technical aspects to business aspects. Finland has a very special place in this multibillion business, introducing many titles which are household names right now. This has created the desire for many new comers to enter the market, their success in the market depends on the quality of their product as well as a fitting business model

Gamification - Motivations & Effects

The field of information systems has a sustained tradition of dividing systems into either utilitarian or hedonic systems, with the core idea that some systems are purely utilitarian in nature and some are self-purposeful. However, in recent years, information system design has been increasingly used for motivational purposes, that is, a hedonic or motivational system design is employed as a method for increasing the utility of systems and activities. Simply put, the core idea is that the more enjoyable or motivating a system or activity becomes, it can also become more utilitarian since the user is expected to be more willing to increase the amount and quality of related activities. The most popular conceptual development in this area has sparked wide-ranging interest towards this phenomenon, and has adopted the name 'GAMIFICATION'. This multi-disciplinary term arises from the general conception that game design, if anything, is an art of hedonic system design, since games are one of the pinnacle forms of self-purposeful systems. In other words, self-purposeful systems such as games are thought to be used for the sole purpose of non-utilitarian enjoyment that is derived from the actual use of the system, rather than from any concrete outcomes of that use. Therefore, the term gamification can be read as 'a process of making systems/activities more enjoyable and motivating, in order to support the utilitarian or otherwise beneficial outcomes of the system, service or activity. Although the idea of gamification has been enormously popular over the last couple years, there has remained a dearth of conceptually refined understanding of the phenomenon, as well as a gap in the empirical evidence offered to demonstrate its effectiveness. With these paucities in mind, this dissertation aims to address both the conceptual and empirical gap. From the conceptual perspective, this dissertation presents two studies in which gamification is linked to IS/marketing theory. The first study links marketing literature with observations drawn from actual games on how game developers use game mechanics in their services as means of marketing (Study 1 - Game design as marketing: How game mechanics create demand for virtual goods). The second conceptual study forms a definition of gamification, arrived at by triangulating theories taken from game studies, motivational psychology, service marketing and IS/HCI (Defining Gamification - A Service Marketing Perspective). To investigate the empirical gap, this dissertation presents two studies. The first empirical study investigates what (social) benefits and motivations drive the continued use of gamification services (Social motivations to use gamification: an empirical study of gamifying exercise). The second empirical study presents a 1.5 year long field experiment on the effects of gamification on user activity and retention (Transforming Homo Economicus into Homo Ludens: A Field Experiment on Gamification in a Utilitarian Peer-To-Peer Trading Service)