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A new study found that more than half of players are downloading their game content on consoles or PC, and that 75 percent spend at least some time playing free games. A third of all gaming time is spent on free-to-play titles, the study showed.
Jason Anderson is the president of Insights Meta, the Kansas City, Mo.-based company that conducted the 1,749-gamer survey. He said the company expects that by the end of the current console life cycle, most game sales will come from what they call “digital natives,” gamers who prefer downloads over discs. And nearly everyone is playing some free and some paid titles — which is part of how the mobile game industry could reach $25 billion by the end of the year.
“That was a surprise for us, how many people were consuming both paid and free-to-play content,” Anderson said. Insights Meta had expected that free-to-play and pay-to-play gamers would be largely discrete groups. But in fact, the opposite is true: All but 10 percent of core pay-to-play (P2P) gamers also play free content, and more than 80 percent of free-to-play (F2P) gamers also buy games.
“We were trying to figure out how to segment the free-to-play market, and it was all the same people,” Anderson said. “This is either a truth that has always been there about free-to-play and its impact on the pay-to-play markets, or the adoption has been very aggressive.
Digital downloads are a huge part of the gaming market
The Insights Meta survey suggests that digital downloads are rapidly becoming the way players get their game content. The same number of gamers play purchased, downloaded PC titles as gamers who play those games on disc, the survey shows. A third of gamers have downloaded paid content on their console; just over 60 percent play games on disc.
“The paid download share is much larger than people realize,” Anderson said. “Publishers have an understanding of how their own individual titles are performing in that regard. I don’t know that people realize how successful it is becoming across all titles.”
The company hasn’t done this survey before, so it doesn’t have any historical data to compare these results to. But their suspicion is that downloaders are on the rise, and fast, Anderson said. PC gamers have embraced the option of avoiding piles of install DVDs, and console gamers have become used to the downloadable content (DLC) model for games they already play on disc.
Millennials make up most of the “digital natives” market segment Insights Meta refers to: “The idea of buying something and downloading it rather than buying a disc is a no-brainer for them,” Anderson said. “It would be their first preference.”
And that generation is just starting to flex its buying power.
“My guess is that at the end of this console cycle, it’ll be the digital natives that drive most of the revenues. It’s a permanent tipping point,” he said. Once that population firmly embraces making all purchases digitally, the infrastructure and pricing models that console and game makers put in place for them will encourage other gamers to come along.
Right now, consoles account for slightly less than half of all gaming revenue, with the other half coming from PC titles, retail downloads, subscriptions, and the like. Revenues from in-game purchases in F2P games account for 15 percent of the overall market.
“Those high-consumption players have an impact,” Anderson said. He was surprised to find that the number of gamers playing F2P content on PC was about equal to the number playing on mobile, but said those PC players are frequently core gamers, playing League of Legends, Counter-Strike, and the F2P Battlefield content. Mobile F2P gamers are more diverse.
Free console downloads still a work in progress
That said, analysts regard the large percentage of gamers who say they download free content on consoles skeptically. About 36 percent of gamers in the Insights Meta survey said they’d downloaded free content on their console.
Those numbers are self-reported by players and likely include game demos and titles that came free with Xbox Live Gold or PlayStation Plus subscription services, Anderson said. His firm considers the free-to-play market on consoles to be the biggest opportunity for growth in the market.
“There’s an opportunity to do free-to-play content on consoles if you approach it properly,” he said. “When you talk with consumers about what they would want or expect in a free console experience, they’re still looking for a true console experience: triple-A quality.”
Take the popular free-to-play massive online battle arena game League of Legends, for example. “There is no comparable experience on console. There is an opportunity for something of that caliber to be successful,” Anderson said. “The greatest challenge is that people only have a limited amount of time, so you’re competing against other console and free-to-play titles.”
The other challenge to the launch of F2P console titles is the lack of development expertise, he said. Licensing and developer relations are very different in the F2P space and, until recently, were nearly impossible to achieve on consoles.
“Both Sony and Microsoft have solid channels for indie publishing that have opened the door,” he said. “But demand for going through that channel is much larger than those groups’ capacity at this moment. I’m very confident that somebody will crack this, the way they have on Facebook, and then on mobile, and then on PC.”
7 types of gamers
Insights Meta analyzed gamers’ spending habits, gameplay preferences, and motivations for playing and came up with seven different segments of players:
- Mobile core: Traditional “hardcore” gamers who have adopted mobile platforms. “They look for things that are deeper, more engaged, more social.”
- Browser casual: What used to be called the typical “casual gamer,” Anderson said. “They play browser-based and Facebook games almost exclusively.” They tend to play on desktops, not tablets or mobile.
- Digital natives: The Millennials discussed above, who prefer downloading their games.
- Frugal gamers: Involved, committed gamers on a variety of platforms who make their buying decisions based almost entirely on price. “It’s not about enthusiasm,” he said. “They’re very high consumers of game content in terms of the time they spend.”
- Core console: The traditional core gamer who has not yet invested significantly in mobile gaming.
- Mobile casual: “What most of us would describe as casual gamers,” he said. They play heavily in F2P games on mobile, with very little time or money spent outside of mobile devices. “They would not be offended if you called them a mobile gamer.”
- Casual: By far, the largest segment. These are players who dabble in games as a hobby, a distraction, or something to do while standing in line, Anderson said. “They would not identify themselves as gamers.”
For a fun look at gamers who play free titles, see Insights Meta’s interactive infographic. The survey was conducted online in September, of respondents aged 13-65, all of whom said they played console, PC, browser, or mobile games. Of the 2,200 responses, 1,750 were accepted as valid (obvious fakes were removed). Some data in the study was taken from an August Google poll with a sample size of 3,000.
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