Video Game Spend Becomes More Diversified
August 11, 2022
About our dataM Science’s Corporate Video Games team helps the largest publishers and platform operators track player spend across all major digital storefronts, hundreds of publishers, and over a thousand games in near real-time Our firm offers visibility into full-game sales, microtransactions (MTX), downloadable content (DLC), subscriptions, and more.
Shooters are still leading the packAccording to our data, digital gaming spend increased substantially during the COVID lockdowns. For the most part, it has retained strength, even as the economy re-opened.
Historically, first-person shooter games have been popular. They continue to lead the pack, with notable frontrunners Fortnite and Call of Duty. Fortnite, a behemoth in MTX spend, has been a top 5 franchise in our data since December 2017, taking the No. 1 spot in January of the following year. It has ranked in the top 5 in every subsequent month since then. Meanwhile, the Call of Duty franchise captures a high share of customer spend, both in terms of full-game sales and live services spend.
Here is a look at Full-Game and Live Services Spend by Franchise since 2017:
Staying powerOur data suggests that the top shooter games will continue to dominate bookings as other genres fight over relatively small slices of the pie. This is partly because shooters tend to retain players more effectively than other game categories.
When analyzing payer retention by game genre, we detect that shooter games have better retention curves than all other genres:
In this figure, the units on the x-axis represent the buyer’s N-th purchase since intially buying a game (or content in a game) of its classification. The larger the area under the line, the higher the retention rate for that genre.
In addition to the innate popularity of the genre, this can also be attributed to franchises like Fortnite and Call of Duty continuously releasing high-value, add-on items and content within their games.
Top franchises are capitalizing on MTX and DLC better than the restTop franchises are generating better payer retention and overall customer spend because they are offering their players more opportunities to to unlock additional value and engagement throughout the lifecycle of a game.
MTX and DLC now account for 75% of revenue for the top five franchises compared to only 53% for the rest of the franchises we track.
More importantly, the MTX & DLC mix has increased at the top 5 franchises over time, while the broader industry has seen slower uptake of MTX and DLC-focused revenue models.
Consider these two charts that show the product-type split for the top franchises vs. the rest:
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About M ScienceM Science is a global data-driven research and analytics firm, with nearly 20 years of experience uncovering new insights for some of the world’s largest corporations and financial institutions. We revolutionize research by discovering new datasets and pioneering methodologies to provide actionable intelligence. Learn more at: mscience.com/corporate intelligence. M Science is a portfolio company of Leucadia Investments, a division of Jefferies Financial Group Inc. (NYSE: JEF).
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