| Pub. Date | : June' 2020 |
|---|---|
| Product Name | : The IUP Journal of Business Strategy |
| Product Type | : Article |
| Product Code | : IJBS30620 |
| Author Name | : Karl-Heinz Moritz, Timo Schober, Georg Stadtmann |
| Availability | : YES |
| Subject/Domain | : Strategic Journals |
| Download Format | : PDF Format |
| No. of Pages | : 13 |
Companies which offer 'free-to-play' video games have to optimize the in-game-shop in order to generate revenues. Price differentiation is one possibility to optimize the profitability of the game. For example, Fortnite-the most successful video game in terms of revenues-offers uniforms (skins) at four different prices. This attracts different segments of the market. The authors use a microeconomic approach in order to highlight the implications of price differentiation for the profit maximization problem.
The success of a video game could be measured in several dimensions: One measure could be the overall number of players. Another measure tracked closely is the number of active players within one month (Wikipedia, 2019). In the light of this paper, a very important criterion is the economic success. In this respect, 'Fortnite' -developed by Epic Games-is outstanding (Goldman Sachs, 2018). In the years 2018 and 2019, Fortnite was leading the rankings of the 'free-to-play games' (SuperData, 2019 and 2020).