Why gamers are flocking from premium titles to free, ad-supported games in this unstable economy
Right now, all signs are pointing to a 2023 recession – and the gaming and esports industry is already feeling the pressure.
In esports, brands like BMW, once a major sponsor of organizations like Fnatic and OG, have pulled out of the space, scaring investors and leading some observers to announce that an “eSports winter” is upon us. In BMW’s case, that means cutting the brand’s esports partnership spend to exactly zero dollars — at least according to the brand representative, who told Digiday, “BMW has ended its esports-related activities[s] from the end of 2022.”
And while the broader gaming industry has long been viewed as reasonably recession-proof, the rise of free, ad-supported games like Roblox threatens to undermine those expectations.
As economic headwinds intensify, all eyes are on the gaming audience as developers and esports organizations alike wait to see how they might impact gamer spending habits. To shed light on this critical issue, Digiday worked with YouGov to survey players on how they might respond to a recession, supported by key data points provided by GWI.
Players are split between free-to-play and premium titles
According to a survey of 19,630 gamers in late 2022, YouGov found that interest in free-to-play games and interest in so-called premium titles, which offer higher production value for a fee, were almost evenly distributed among the cohort. (YouGov’s survey was sent to thousands of self-identified gamers in international markets such as the United States, Europe and Asia, with respondents submitting their responses via email.)
48 percent of players said they were interested in free-to-play games, while 53 percent said they weren’t. Notably, gamers’ preferences also don’t seem to be evolving in one direction or the other: 12 percent said their preferences have shifted toward free-to-play, but 11 percent said they’re interested have lost to free-to-play games for the past two years.
Among gamers who prefer free-to-play, the price of premium games and consoles is the main factor
Of the 9,271 respondents who responded to the question why they were interested in free-to-play gaming, 3,248 or 35 percent said their direct reason for prioritizing free-to-play gaming was the prohibitive cost of either premium titles or game consoles and PCs. Another 33 percent said they prefer to play lots of small games over fewer big ones — another cost-based factor, as each individual premium game purchase typically costs at least $60.
On the other hand, only 15 percent of gamers said they prefer the gameplay of free-to-play titles. It’s clear that the highest quality gaming experiences happen in premium titles, not free games – but the rising cost of console gaming could keep interest in free-to-play high as a potential recession approaches.
“When a lot of us in the industry think of premium gaming, we end up jumping to the $69.99 PS5 titles — but if you have people who are just mobile gamers, for example, they would actually think of a premium game For $2.99, think of the paid game with no ads as opposed to the free version,” said Nicole Pike, YouGov’s head of global gaming and US sports. “There’s some sort of underpinning for which platform they prefer to play on and that helps drive things along – so we’ve seen a lot of data that shows a direct correlation between wanting to play only free games and the fact that gamers also show that they are mainly or exclusively mobile.”
The majority of players who avoid free-to-play titles don’t like seeing ads in their games
It turns out that the gameplay isn’t much of a concern for those gamers who aren’t into free-to-play games either.
Just 4 percent of respondents said their dislike of free games was due to the superior gameplay of premium titles. Gamers made their preferences clear: a whopping 66 percent said they had avoided free-to-play titles in the past two years because they don’t like seeing ads while playing.
With the rise of free-to-play, console makers like Sony and Microsoft have increasingly begun to view in-game advertising as a promising potential area of growth, with both reportedly beginning to establish their own in-game advertising divisions in 2022. But if brands want to start placing ads in premium games like they are currently being placed in many free titles, game developers need to determine how to serve them without giving players bad taste.
Monthly spending on games is falling
According to data from GWI, the amount of money players spend on games and in-game purchases has declined since the fourth quarter of 2021, albeit not by leaps and bounds. Although spending increased across the board between 2020 and 2021, fewer gamers in the United States and Canada spent more than $50 a month on games between 2021 and 2022 – a statistic that inherently predicts a decline in premium gaming purchases. stocks, which are almost always priced at $60 or more.
While this data doesn’t include gaming-related products like console peripherals or gaming accessories, it certainly indicates that gamers are spending less on their favorite pastime, increasing developers’ acceptance of in-game advertising and free-to- Play confirmed as business models of the future.
“All in all, it’s a mixed bag. Overall consumer confidence has fallen and is affecting the gaming sector, but the signals are not very clear,” said Chris Beer, data journalist at GWI. “I’d say that the large purchases — of things like consoles and gaming PCs — will likely decrease, but the number of individual title or microtransaction purchasers will be less affected. Gamers may be cutting their monthly budgets, but I don’t think they’re going to stop buying entirely.”
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