The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost, and make money on games. Digital games changed the way games are distributed and sold, and it opened up the way to free-to-play models.A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that become extremely popular in the digital age of gaming.
Discord makes money in several ways. From its Discord Store, where users can buy premium games, to the seller shops, which primarily works with a 90/10 revenue share for developers and game sellers. And the ability for sellers to get more visibility on the platform by adding features to the game visibility.
EA Sports is among the largest gaming publishers, with a hybrid strategy of fully-owned games and licensed games distributed with a cross-platform approach. FIFA is the game that most contributes to its revenues and live services (Ultimate Team in particular) are the largest revenue contributors to EA revenues.
Epic Games is a gaming company, that develops, publishes, and distributes games. It comprises the Unreal Engine, making money through licensing agreements with developers and creators. Its games (like Fortnite) mostly follow a free-to-play model on PC and an in-app purchase model on the digitalmarketplace. And its storefront Epic Games Store, taking a 12% cut on games’ sales.
Roblox is an online gaming platform where users can create avatars and explore various gaming experiences. Each experience will be monetized based on how its developer has structured the game. For instance, free games allow users to spend the platform’s currency, called Robux, to get specific enhancements or purchase items like clothing accessories for the avatars, simulated gestures from the Roblox Avatar Marketplace. Therefore, Roblox makes money by earning a commission on each transaction and through its internal ad network.
Tencent is a Chinese multinational conglomerate founded in 1998 by Ma Huateng, Zhang Zhidong, and Xu Chenye. Among its various global subsidiaries are companies in the online services, music, and artificial intelligence industries. But it is perhaps best known for its interest in the video game sector – both as a game developer for the Chinese market and the acquirer of several established gaming companies. Tencent is a vast company with a stake in more than 600 companies. Following is a look at some of the companies and subsidiaries it has a majority stake in.
Twitch started in 2007 as Justin.tv, broadcasting the life of Justin Kan, one of its co-founders, used to prove the concept of enabling anyone to broadcast their lives on the web. Once pivoted, Twitch quickly grew, and by 2014 it was acquired by Amazon for almost a billion dollars. Titch now makes money via subscriptions, bits, advertising, and merchandising.
Key Takeaways
Discord: Discord is a popular communicationplatform for gamers. It makes money through its Discord Store, where users can purchase premium games. The platform also allows sellers to get more visibility by adding features to the game visibility, and it earns a revenue share from developers and game sellers.
EA Sports: EA Sports is a major gaming publisher with a hybrid strategy of fully-owned games and licensed games. Its flagship game, FIFA, is a significant revenue contributor, especially through live services like Ultimate Team, which offers in-game purchases for players to enhance their gaming experience.
Epic Games: Epic Games is a gaming company known for developing and publishing games, including the popular title Fortnite. Its business model includes licensing agreements for the Unreal Engine with developers and creators. Fortnite follows a free-to-play model on PC and generates revenue through in-app purchases. Epic Games also operates its storefront, the Epic Games Store, which takes a 12% cut on game sales.
Roblox: Roblox is an online gaming platform where users can create and explore various gaming experiences. Developers can monetize their games based on their chosen structure, such as offering in-game purchases using the platform’s currency, Robux. Roblox makes money by earning a commission on each transaction and through its internal ad network.
Tencent: Tencent is a Chinese multinational conglomerate with a significant presence in the gaming industry. It is involved in game development for the Chinese market and has acquired several established gaming companies. Tencent has a stake in more than 600 companies globally.
Twitch: Twitch is a live streaming platform that initially started as Justin.tv, broadcasting Justin Kan’s life. It was later pivoted to focus on gaming content and quickly grew in popularity. Twitch makes money through subscriptions, bits (virtual currency for tipping streamers), advertising, and merchandising.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
