How Online Games Make Money:
Getting Your Computer Game Programming Degree

Get information before going for a degree in game design: learn how video games make money.

Learn How to Price Online Video Games

two young blonde girls playing video game

In the massive virtual world of multiplayer online gaming, real-world concerns like the payment model used by the game provider may not sound like nearly as much fun as tricking out your avatar and setting out on an action-packed adventure.

The truth is, how users pay for games really does make a difference—not just to the customers, but to the game companies themselves. Aspiring video game design professionals need to be familiar with issues such as payment models, in addition to the concepts and software skills learned in computer game programming classes.

Subscription Payment Models

From classic online games such as "EverQuest" to the popular "World of Warcraft," traditional models for video game design have relied on subscriptions paid by users, usually on a monthly basis. The advantage to this from the gamers' perspective is the ability to pay a recurring but known fee for a hobby that they feel is worth the cost, and in return, to be able to play as much and as often as they like, while also benefiting from regular updates to the system and game world.

In turn, game companies benefit from this model because they can rely on a steady and relatively predictable income from a large number of users, which they can then apply to overhead costs and high-quality new content. However, this is not the only payment model commonly used in the online gaming world.

The Microtransaction Model

Another payment system that's gaining more of a foothold in worldwide gaming markets is the microtransaction model. For gamers who are more casual than "hardcore," a game that's free to play in basic form—but in which extras such as enhancements or virtual goods are paid for via small purchases—might appeal more than a recurring monthly fee.

Although many users of this payment model will simply continue to play the bare-bones free game, other users go on to be big spenders—on the order of thousands of dollars a month. Microtransactions can also be an effective way to attract new audiences to a game and entice them into spending small—and sometimes large—amounts. From the developer's perspective, instead of making periodic large-scale updates to the game world that apply to all paid users, microtransactions are encouraged via small additions such as, say, items of clothing or character leveling advantages.

Ultimately, the more users spend, the more profit the company earns. That's fundamental to the business of game-playing, as you'll learn when you earn your degree in computer game programming.