A reduction in physical game sales and the emergence of third-party game monetization platforms have reduced developers' dependence on publishers.
Publishers vs Digitalization
In its recent analysis of emerging trends in the game industry, market research firm Newzoo highlighted the uncertainty and "monetization mystery" unraveling for game publishers these days.
In the past, a publisher's key mission was clearly outlined and perfectly understandable - the distribution. With the logistical challenges of delivering physical objects such as game discs all over the globe, it was virtually unthinkable for an indie game developer to do this on their own. But today, digital game sales are gradually overtaking physical game copies. Steam, Google Play, App Store, Microsoft Store, and PlayStation Store are taking the place of publishers as a link between game developers and their customers. As a result, getting your game published is now easier than ever before.
That sounds like music to an indie game dev's ears. The downside is that getting published doesn't equal getting delivered to the customer. All you need to have to put your game on Steam is the game itself, plus $100. But what are the chances that players will find your title among thousands of others and give it a try? No matter how awesome the title is, these chances are pretty low. Unless you turn to a battle-scarred publisher who has the expertise and money to promote and monetize your game (and pocket a major part of the revenue).
But does it make Newzoo's observation pointless? By no means. While physical games distribution is shrinking, publishers are indeed staying strong when it comes to promoting games and investing in their development. However, another game market analysis, this one from Forbes, indicates that publishers are already being contested in these fields.
Publishers vs Platforms
Forbes' article points out the gaming industry's shift to the free-to-play business model that thrives on microtransactions such as in-game item sales. This observation is supported by a recent report from Superdata showing that free-to-play titles account for 80% of all digital games revenues.
This new norm doesn't favor game publishers' traditional business models. To be financially successful, a developer needs a strong in-game item economy aside from engaging gameplay. Traditional publishers are good at selling games but today it's usually less lucrative than selling in-game content. While the publishers are looking for their place in this new gaming world of skins and subscriptions, there are third-party platforms designed specifically for building modern game economies and that are ready to dominate the field.
Specifically, Forbes points at in-game item trading platform DMarket. With over 10 years in skins trading, the team behind the platform should know a lot about the monetization of in-game content.
At first glance, DMarket is a marketplace where players buy, sell, and exchange items from different games. But for a game developer, it is a versatile monetization platform. In its recent announcement urging game developers to meet DMarket executives at the D.I.C.E. Summit 2020 in Las Vegas, the platform promises the attendees "a shortcut to the multi-billion dollar global economy of in-game items".
A closer look at the platform reveals that the shortcut lies through a white-label in-game marketplace solution. Basically, it enables a developer to sell in-game content to players and monetize the game in this way. Furthermore, developers can connect their games directly to DMarket's marketplace to let players trade in-game items among them. In this case, a game developer receives fees from each P2P trade in addition to revenues generated from initial item sales. This model resembles Steam's skins trading ecosystem that brings Valve billions of dollars each year.
On top of that, DMarket's offer includes additional benefits such as cross-game promotion and pre-order campaigns. These features further reduce the need for a game publisher - game and item pre-orders can be a sort of fundraiser, letting game developers monetize games long before launch day.
Of course, game publishers are smart and rich people who will surely find new ways to be useful to game developers. The point is: they are no longer the only option. And it's always nice to have an alternative.
