Here come the whales!
Posted by Tobold's Blog [HTML][XML][PERM][FULL] on 30 November 2012, 7:49 am
I received a closed beta key for City of Steam, in time for the beta session starting today. And while looking through their website I stumbled upon the page offering collaborator packs, selling both beta keys and various advantages like virtual currency for the final game. And what I found notable was that there were packs for up to $500 on offer. Even higher, the Kickstarter page for Elite: Dangerous offers advantages for backers up to $5,000. And the $5,000 pack is marked as "sold out", having been bought by 5 people.

Who spends $500 or $5,000 on a video game? If you would take the same money and spend it on Steam or a selection of MMORPGs, you would get quite a nice library of quality games which probably would entertain you for much longer than one single game. Many gamers spend less than $500 per year on games, and only very few spend $5,000 or more per year on games. In casino parlance the people spending far more than the average person are known as "whales". And it appears these whales now exist also in video games.

In a way these sums are probably a sign of the maturity of the hobby. Video games aren't just for kids any more. A good number of gamers is now middle-aged, and in today's economy, which is characterized by its inequality, some of these middle-aged gamers are rich enough to spend rather large sums on their favorite game. In the end a $5,000 video game purchase isn't any stranger than a $5,000 set of golf clubs.

Nevertheless the number of people spending hundreds or thousands of dollars on a video game is very small. More significant is the number of people who are considered "whales" by the Free2Play game industry, although the average monthly revenue per paying user (ARPPU) is more likely to be around $50. Because only around 2% of players of a Free2Play game actually pay, the average monthly revenue per user is just around $1. Personally I tend to spread my money around, but I don't have a problem to pay up to $20 in a Free2Play game in which I am having fun. I'm not likely to buy a $500 collaborator pack for City of Steam, if I find out I like that game.

Whales have consequences for game design. There must be virtual items in the game that are highly desirable and either not attainable by playing at all, or demands a very long grind to achieve, if you want to sell these items for big bucks. But then again, the old MMORPG model also revolved about a design for just 2% of the players, and those weren't even the best customers. Rewarding those who pay most makes business sense, even if it angers some entitlement kids.
Tobold's Blog



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