The Free-to-play Business Model

The(1) free-to-play model in the online gaming industry is based on providing an online game at no charge on either mobile devices or on a PC. Monetization would occur with virtual items which players may purchase during the game. It has been demonstrated that there are several motivations for gamers to purchase such items including unobstructed play, social interactions with other gamers, competition and economic rationale. These motivations can be exploited as drivers for value generation when designing such games in a way that appeals to the gamers by using several strategies. We elaborate on seven strategies, i.e. stratified content, inconvenient gameplay elements, mediums of exchange, inventory mechanics, special occasions, artificial scarcity, and alterations of content. Additionally, the theory of customer lifetime value has shown to be a beneficial concept in segmenting customers and identifying those who are especially valuable from a business perspective. Overall, research on business value generation in the field of online gaming seems less developed than in other segments and applications. Consequently, a common understanding of available concepts and strategies need to be developed to enable identification and overcoming of challenges in free-to-play online gaming.