Are publishers shunning boxed product?

Free-to-play and downloads are the fastest-growing business models of the past five years, but how many video games publishers actually rely on them rather than more traditional methods of releasing games?

In January and February 2013, industry networking and events firm Game Connection led a publishers’ survey targeting key business managers from many major and medium-size publishers and distributors that either develop internally or have games developed by third-party studios.

This web-based survey, followed by specific phone interviews, covered various topics: platforms, business models, targets, genres, submission process and so on. Approximately 140 publishers with different perspectives answered this detailed survey.

When asked which business model they preferred when releasing games across all platforms, almost 25 per cent of respondents said that ‘free-to-play’ is the only model they use. A further 40 per cent said they use it for many games.

Conversely, the ‘retail/boxed’ model is rarely used or not used at all by six out of ten publishers. Instead, the survey found that publishers considered ‘free-to-play’ and ‘buy and download’ (titles sold through digital distribution platforms such as Steam) are the most relevant business models for publishers.

Looking ahead, two out of three publishers believe their chosen business models will change in the near future.

‘Free-to-play’ will become even more relevant with nine out of ten publishers saying they plan to use it (if they don’t already).

But ‘retail/boxed’ – the traditional way of releasing a game – will not be used as often, with eight publishers out of ten saying that they will rarely or not use it at all.

However, on consoles and PC the ‘retail/boxed’ model is still popular for now, with 62 per cent of publishers currently using it on console – more than any other model – and 43 per cent on PC.

It will come as no surprise that ‘buy and download’ leads the way on PC, with 59 per cent of publishers declaring it to be their preferred business model. It is also popular on console: 72 per cent of participants said they release many games as downloads on home consoles.

‘Try and buy’, where players download a limited version of a game and buy the full title later, and ‘in-game advertising’ are used for many games by more than 35 per cent of the publishers, whereas ‘buy and download’ is used for many games by 48 per cent.

‘Monthly subscriptions’ and ‘tariff bundling’ (whereby users pay one bill for two services, such as a mobile phone bill that includes downloading games for free from an online platform) are considerably less popular. 55 per cent of publishers said ‘subscriptions’ is not a business model they use, while 75 per cent said they don’t use ‘tariff bundling’.

In terms of audience, ‘free-to-play’ is considered as the most relevant business model to target men and women aged 18 to 50. On the other side, ‘buy and download’ is preferred when aiming for men and women more than 50 years old.

The full report can be downloaded at www.game-connection.com/gameconn/content/publisher-survey