Business Models for Video Games
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Business Models for Video Games Master thesis, 15 credits, INF M02, in Informatics Presented: Authors: June, 2010 Björn Olsson Louise Sidenblom Supervisor: Claus Persson Examiners: Paul Pierce Odd Steen Title: Business Models for Video Games Authors: Björn Olsson, Louise Sidenblom Publisher: Department of Informatics, Lund University Supervisor: Claus Persson Examiners: Paul Pierce, Odd Steen Year of publication: 2010 Type of thesis: Masters Language: English Pages: 94 Abstract: The game industry’s size and growth over the last 25 years has evolved from an almost nonexistent market to a huge industry. Another phenomenon which has also had a huge growth during the last decade is e-commerce, the buying and selling of products and services over the Internet. Video games are naturally connected to computers and the Internet. This together with the fact that they are digital products makes them ideal for e-commerce and opens up for some interesting possibilities for new business models. In the study the most popular business models in the video game industry are introduced and classified through a research model built upon e-commerce literature. A survey has then been carried out aimed at capturing consumer’s awareness, experience and attitude towards these models. Six core business models for video games are presented. These are: Retail, Digital distribution, Subscription, Player to player trading, Micro-transaction and Advertising. Key words: Business models, Electronic commerce, E-business, Digital products, Video games 2 Index Abstract ........................................................................... Error! Bookmark not defined. Abstract: ........................................................................................................................ 2 Index .................................................................................................................................. 3 1. Introduction ................................................................................................................... 5 1.1 Background ............................................................................................................. 5 1.2 Problem area ............................................................................................................ 6 1.3 Research questions .................................................................................................. 6 1.4 Purpose .................................................................................................................... 6 1.5 Limitations .............................................................................................................. 7 2. Literature review ........................................................................................................... 8 2.1 Electronic commerce ............................................................................................... 8 2.1.1 The major forms of e-commerce ...................................................................... 8 2.1.2 The phases of commerce .................................................................................. 9 2.1.3 Different stages of B2C e-commerce ............................................................. 11 2.1.4 Classification of intangible goods .................................................................. 14 2.2 What influences e-consumers attitudes? ............................................................... 15 2.2.1 Perceived risk ................................................................................................. 15 2.2.2 Perceived trust ................................................................................................ 16 2.2.3 Perceived ease of use...................................................................................... 17 2.3 What is a video game? .......................................................................................... 17 2.4 What is a business model? .................................................................................... 19 2.4.1 Retail model for video games......................................................................... 20 2.4.2 Digital distribution model for video games.................................................... 20 2.4.3 Subscription model for video games .............................................................. 21 2.4.4 Player to player trading model for video games ............................................ 22 2.4.5 Micro-transactions model for video games .................................................... 22 2.4.6 Advertising model for video games ............................................................... 23 3. Method ........................................................................................................................ 24 3.1 Choice of method .................................................................................................. 24 3.2 Procedure ............................................................................................................... 25 3.2.1 Survey............................................................................................................. 25 3.2.2 Survey preferences ......................................................................................... 26 3.2.3 Population and selection................................................................................. 26 3.2.4 Processing of data........................................................................................... 27 3.2.5 Presentation of data ....................................................................................... 27 3.2.6 Ethics .............................................................................................................. 28 4. Empirical findings ....................................................................................................... 29 4.1 Results from the closed survey questions ............................................................ 29 4.2 Results for the open survey questions ................................................................... 37 4.2.1 Attitudes towards video game business models ............................................. 37 4.2.2 Attitudes towards e-commerce ....................................................................... 38 4.2.3 Attitude towards possible e-commerce risks .................................................. 38 5. Discussion ................................................................................................................... 39 5.1 Classification of video game business models ...................................................... 39 5.1.1 Classification of the retail model ................................................................... 41 5.1.2 Consumer perspectives on the retail model .................................................... 41 5.1.3 Classification of the digital distribution model .............................................. 42 3 5.1.4 Consumer perspectives on the digital distribution model .............................. 42 5.1.5 Classification of the subscription model ........................................................ 43 5.1.6 Consumer perspectives on the subscription model ........................................ 43 5.1.7 Classification of the player to player trading model ...................................... 44 5.1.8 Consumer perspectives on the player to player trading model ...................... 44 5.1.9 Classification of the micro-transactions model .............................................. 45 5.1.10 Consumer perspectives on the micro-transactions model ............................ 45 5.1.11 Classification of the advertising model ........................................................ 46 5.1.12 Consumer perspectives on the advertising model ........................................ 46 5.2 General analysis of the survey .............................................................................. 47 6. Conclusion ................................................................................................................... 49 6.1 Future research ...................................................................................................... 50 Appendix 1 – Transcript of all answers for the open questions ...................................... 51 Appendix 2 –Categorization of all the answers for the open questions .......................... 83 Appendix 3 – Survey layout ............................................................................................ 89 References ....................................................................................................................... 92 4 1. Introduction 1.1 Background The video game industry’s size and growth over the last 25 years evolved from an almost nonexistent market to a huge industry that competes with the film industry in its annual sales. Today a blockbuster film from Hollywood has little opportunity to sell more during its first opening week than an equally popular video game. Video games are the first new storytelling medium since the television and have over the past years taken over the music industries place as the new dominating entertainment medium. (Alpert, 2007; Erickson, 2008) The global online gaming community has reached a stunning 217 million people, which is one fourth of the worldwide Internet population (comScore, 2007). Video games sales have increased explosively during the last years and even during the regression 2007 the sales increased significantly (Bulik, 2008). The increased sales seem to be lasting. In a study by PricewaterhouseCoopers, the global gaming industry grew from 31.6 billion U.S. dollars in 2006 and will grow to 48.9 billion in year 2011 (Erickson, 2008). Another phenomenon which has also had a huge growth during the last decade is ecommerce, the buying and selling of products and services over the Internet. As a prerequisite for e-commerce is customer access to Internet and computers, the growth of e-commerce is connected with the growth of Internet use (Sundström, 2007). The evolution of e-commerce can be attributed to the combination of regulatory reform and technological innovation (Goel, 2007). The start of e-commerce can be sited in the early 1990s together with the arrival of World Wide Web and browsers. In the middle of the nineties, companies like Dell, Cisco and Amazon started an intense use of the Internet as a sale platform and since then the use of e-commerce has only grown. Today most households in the western world have access to computers and the Internet and as a result the barriers to engage in e-commerce have fallen rapidly (Goel, 2007). Video games are naturally connected to computers and the Internet and together with the fact that they are digital products that can be instantly delivered online makes them ideal for e-commerce and even opens up for some interesting possibilities for new business models, new markets and new growth (Sharp & Rowe, 2006). A survey conducted by the video game development company Stardock show that 61% of their customers purchase their software digitally in contrast to boxed from a retail (Wardell, 2009). 5 Besides digital distribution and retail, there are various possibilities for video game companies to earn money and this is reflected in the large amount of business models that are used in the video game industry today. Perry (2008) presents, not less than, 29 different business models for video games which he calls potential video game monetization methods. With this background introduction we hope to have given a quick overview of the climate of the video game industry today and its present and potential use of ecommerce. 1.2 Problem area Video game business models are an interesting area within the field of informatics because they display new and innovative ways of running businesses and making money with the use of information technology. Much has been written about video games and the different business models for video games can be found all over the Internet, on website banners and even integrated into virtual communities. However there are not many scientific articles that focuses on the whole range of video game business models and especially not from a consumer perspective. This article focus on video game business models from the perspective of the consumers (their awareness, experience and attitude) within an e-commerce setting. This focus has resulted in the research questions below. 1.3 Research questions What kind of video game business models exists today and how can they be classified? How aware and experienced are the consumers of the different video game business models available and what are their attitudes towards them? 1.4 Purpose Describe the most popular business models in the video game industry and classifying them with the help of a theoretical research model built upon e-commerce literature. Study consumer’s awareness, experience and attitude towards the business models we discovered. 6 1.5 Limitations The focus is going to lie on the different business models within the video game industry. The study is going to use different articles and literature that focus on video games business models, e-commerce and digital products. The depth of the report is not going to lay on what impacts these business models has on the consumer; instead the focus is going to be on consumers attitudes towards the models, their general knowledge about them and their experience of them. It may be hard to limit the findings to a certain country since the gaming community’s social networks reach over country boarders. Piracy is an important aspect for the business models but this subject is not going to be further investigated in this report. The purpose is not to go into detail on the different ethical aspects of the business models within the game industry. 7 2. Literature review 2.1 Electronic commerce With this section we want to give the reader an overview of electronic commerce with a focus on business to consumer (B2C) commerce. Terms and concepts in this overview will later be used in our theoretical research model aimed at classifying business models for video games. Commerce implies the exchange of products and services between groups and individuals. Commerce, or trade as it also implies, can be seen as the essential activities of any business and e-commerce focuses on the use of ICT to enable external activities and relationships of the business (Beynon-Davies, 2004). E-commerce can be defined as a modern business methodology that addresses the needs of organizations, merchants, and consumers to cut cost while improving the quality of goods and services and increasing the speed of services delivered, by using Internet (Goel, 2007). E-commerce is regarded as a subset of E-business which deals with transactions and the selling of products and services online (Li, 2007). 2.1.1 The major forms of e-commerce E-commerce is any approach of doing business online and today there are four main areas where business is conducted (Goel, 2007). These are: Direct marketing, selling, and services. Online banking and billing. Secure distribution and billing. Value-chain trading and corporate purchasing. Of these areas direct marketing, selling and services was the earliest type of ecommerce and it is also in this area most organizations focus today (Goel, 2007). The most commonly used classification of e-business is a classification of transactions and relationships among participants (Li, 2007). Even though new subcategories exist and are constantly invented, the three major categories of e-commerce are B2B (business to business), B2C (business to customer) and C2C (customer to customer). This study puts weight on B2C e-commerce and some aspects of C2C e-commerce with a strict focus on the selling of digital products and services, or more specifically; video games. 8 B2C, the most commonly discussed type of e-commerce, is when online businesses attempt to reach individual consumers. Even if B2C is small compared to B2B, only about 65 billion dollars for B2C compared to 700 billion dollars for B2B in transactions in 2001, it has shown a steady growth since 1995 (Laudon & Traver, 2002). C2C, refers to situations where costumers sell to each other over the Internet. These sales often take place over an auction site like E-bay so often there is actually a company between the costumers (Li, 2007). 2.1.2 The phases of commerce All business models, electronic or not, can be modeled with three business roles. These are customers, providers, and intermediaries (Hauswirth et al., 2001). In commerce there is always a customer and a provider but not always an intermediator. Commerce of any nature can be seen a system or a process with different generic phases between customer, provider and (possibly) intermediator. Hauswirth et al. (2001) describes commerce with the following phases: Advertising: Involves the activity of publishing descriptions of available products from one party to another. This can be done both passive (by for instance publishing information on a webpage) and active (by for example emailing information to possible customers). Negotiation: Before the succeeding phases can take place there must be an agreement between the involved parties considering business terms and the properties of the product. Ordering: If there is an agreement between the parties, one party may order the product. Payment: Involves the step of monetary values of exchange. Payment can be executed in a number of ways. Delivery: The product is delivered to the requesting party. Beynon-Davies (2004) describes the phases of commerce a little different and in a little less detail: Pre sale: Involves activities that take place before sale occurs. Sale execution: Comprises the activities of the actual sale of a product or service between economic actors. Sale settlement: Involves those activities that complete the sale of a product or a service. After Sale: Involves those activities that take place after the buyer has received the product or service. The major difference is Beynon-Davies (2004) last phase that takes place after the monetary exchange; the after sale phase. 9 The phases of commerce can be described with the following example: If a customer is going to buy a book at a book store the pre sales or advertising activities could be to include the marketing of particular books by putting them into various catalogues or shelves. Then it’s easier for the customer to find the book she is looking for. The sales execution involves the purchasing of the book by the customer; this step is represented by the ordering and delivery phase. The sale settlement occurs when the customer buys the book and agrees on the terms which may include, for instance that there is a 5 days period where you can return the book. This step is represented by the negotiation and the payment phase. After sale services might involve initiatives by the sales personnel to make the customer a member of the book store which gives her a discount on particular books and increase the chances that she will return to the shop in the future. A customer using e-commerce can gain product awareness, build up preferences, directly purchase products or services and obtain post-purchase information by using the Internet hence the customer chain for e-commerce supports the generic phases of commerce (Feicheng et al., 2009). Pre sale / Advertising: On the web product identification can be enabled through for example banners, e-mail, in personalized marketing based on customer profiling, inclusion in search engines and catalogues and portals that enable product comparison between vendors. Sale execution / Ordering & Delivery: Web sites permits online ordering and, if the product is digital, also delivery. Sale Settlement / Negotiation & Payment: Online payment can be executed in a variety of ways through secure B2C websites. Negotiation can take place for instance on an auction site. After sale: Forms of customer profiling and referencing systems can be used to encourage further purchases from customers. 10 2.1.3 Different stages of B2C e-commerce Organizations can use B2C e-commerce in more or less complex ways. Often the organizations go through different stages starting with using e-commerce for simple information-seeking and communication and gradually evolving to using online payment, online delivery etc (Beynon-Davies, 2004). The first stages that only involve the front end of B2C e-commerce, such as product information and orders, is much easier to succeed with compared to the stages that require the front-end website (or interface) to be integrated with the back-end infrastructure (Feicheng et al., 2009). Beynon-Davies (2004) defines the different stages as: Information-seeking and communication Marketing presence Online catalogue Online ordering Online payment Online delivery Customer profiling and referencing Each of these stages supports parts of his model described below. For instance, pre sales activities include information seeking and communication, marketing presence and an online catalogue. Sales execution activities involve online ordering and online delivery. Sales settlement activities involve online payment and after sales activities involve customer profiling and referencing. Pre sales Sales execution Sale settlement After Sale Information seeking Communication Online ordering Online payment Customer profiling and referencing Marketing presence Online delivery Online Catalogue Figure 1 - B2C infrastructure (Beynon-Davies, 2004) 11 Information seeking and communication Through the use of Internet and the web, information seeking and communication has evolved and become more effective and efficient than ever before. There are several software tools to support these behaviors, such as search engines and electronic mail. In B2C these tools are essential in order to keep in contact with customers and make it easy for customers to ask questions about products, orders etc (Beynon-Davies, 2004). Marketing presence It is really important to establish a marketing presence on the internet through a corporate web site with details on the company, for a better customer relation (BeynonDavies, 2004). Online catalogue In this stage an online catalogue for the company’s services and products is made available for the customers. The catalogue can amount to a series of static web pages or may be dynamic in the sense that it’s updated from a database of products. Online ordering The next step is to make customers place orders online for products or services which is the key transmission point for a business since it involves the integration of web sites with back-end information systems (Beynon-Davies, 2004). The system demands integration between the web site and the sales order information system which will activate the distribution system responsible for the delivery of goods and services. Online payment Here the customer both orders and pays for the goods using the web site. This stage of B2C e-commerce demands a close interaction between an organizations front end and back end system (Beynon-Davies, 2004). This could be quite a big challenge for an organization who must offer their consumers online financial transactions in a simple, accepted and secure way. For payment online companies’ usually offer their consumers to pay using credit cards or digital cash (Jelassi & Lennen, 2003). When paying with credit card the consumer enter their credit card number into the seller’s website. The number is encrypted, transferred to the seller’s server and then decrypted. Another possibility for consumers is to exchange traditional currency (with the use of cash, credit card or the bank) for digital currency which is often referred to as e-money or ecash. This method requires an electronic wallet that keeps track of the consumers’ ecash hence a user account must be set up by the consumer. This approach may be considered for less expensive products and is appropriate for micro-transactions. Online delivery In this stage the distribution system is replaced with an online delivery system and the need for a separate stock and products store is in most unnecessary. The online delivery is off course only possible if the product being delivered can be transferred over the Internet, in other words if the product is intangible. Intangible goods can be delivered online and these goods are converging to a digital standard which makes the format easier to capture, storage and spread. In addition to the term intangible goods, there are many terms used to describe goods and services being traded and delivered over the Internet, such as: digital products, information products, information services and virtual products (Torlina et al., 1999). 12 Examples of intangible goods are: Visual artwork Music Films Software (including video games) Customer profiling and preferencing (Customer Relationship Management) Winning new consumers and keeping the ones you have happy is an important stage of a winning concept in B2C commerce (Beynon-Davies, 2004). The relationship between the consumer and the companies have always been important but through mass marketing and increased consumerism, there has been a time where consumers has traded relationships for anonymity, reduced variety and lower prices. With the help of ICT however consumers are not forced to make this tradeoff any longer (Peppard, 2000). The old ways of viewing economics of information (displayed below) as a tradeoff between richness (the amount, customization and interactivity of the information) and reach (the number of consumers that are connected to the company and are exposed to the information), does not longer apply. Figure 2 - The conventional economics of information. (Peppard, 2000) What has made the tradeoff unnecessary are companies’ recent means of keeping track of consumers’ profiles and preferences through the use of customer relationship management (CRM) software. CRM software makes it possible for vendors to build a profile of every customer they have been in contact with (Beynon-Davies, 2004). When reaching this final stage, the consumer is the key focus. The company needs to know which their consumers are, how satisfied they are with the company and what they want and need for future services. Information like this is crucial for giving a consolidate view of the consumer, for calculation of consumers lifetime value, for product tailoring and for service innovation (Peppard, 2000). The information can in other words be used to answer the following questions: Who is this particular consumer? How much is this consumer worth for the company? How should a certain product be customized for a certain consumer? Which new services are needed to satisfy consumer demands? 13 This is however not the only profit when using CRM software. Peppard (2000) claims that using CRM software is also about personalizing the transaction so that no matter what channel the consumer use to contact the company she should be known and receive a consistency of service. In this way a strong relationship can still exist between the consumer and the company without comprising the prices and product/service variety. 2.1.4 Classification of intangible goods As more and more things, such as TV and radio, are getting digitalized Hiu and Chau (2002) felt the need to set forth a framework for classification of intangible goods. This framework classifies intangible goods or digital products which is the term Hiu and Chau (2002) use, by categories and characteristics. The categories are: Tools and utilities: These are products that assist users in accomplishing specific goals and tasks. (Examples: Adobe acrobat, Realplayer). Content-based products: These are products which values lie in their information content. (Examples: online news paper, research reports, online entertainment such as music or movies). Online services: These are products that provide access to useful resources but where the information is not part of the product itself (Example: Internet telephony, search services). The characteristics are: Delivery mode: This is the way in which the product is delivered to the customer via the Internet, either at one time through download or continually through use / interaction. Granularity: This characteristic captures the divisibility of the product. A product which is highly divisible gives the seller more possibilities to distinguish themselves from competitors by selling the product in different ways to gratify the needs of different consumers. Trialability: This is how well the product is suited for being previewed or tested by the customer before it is sold. The relationships between the product categories and characteristics are displayed in the table below. Tools and utilities Content based Online services Download Download Interactive Delivery mode Low High Medium Granularity High Low Medium Trialability Figure 3 - Classifying digital products based on product category and characteristic. (Hiu and Chau, 2002) For instance the table shows that online services are not delivered to the consumer with a one-time download but instead the product or value is delivered to the consumer while he or she interacts with the service. This could for example be to pay a monthly fee to get access to a certain Internet community. The table also shows that content based products have a high granularity but a low trialability. The high granularity of contentbased digital products is due to the fact that sellers are given many different choices when it comes to packaging, marketing, and pricing their products (Hiu and Chau, 2002). 14 Different pricing can easily be used by dividing the product information into pieces and then sell different combinations of the pieces. For instance it would be possible to sell a whole newspaper online or sell it in pieces where the consumers could for instance pay just to read the sport section. The trialability of content based products is low because if a consumer is given the chance to test the product, by for instance being able to read a book before buying, chances are that the consumer will see no reason to buy once she has accessed the information. The sellers could of course give the consumers access to a small part of the information but this will always just be a sample and it may not make the true product justice. 2.2 What influences e-consumers attitudes? Since one part of this study is to map consumer attitudes towards different video game business models, this section covers some of the most commonly described influential aspects behind consumers attitudes towards e-commerce. These aspects may give a clue to why some business models are more appreciated than others. There are several aspects that influence consumers’ motivation to purchase products or services over the Internet. A majority of these are based on customers’ attitude towards the web as a sales channel (Sundström, 2007). According to the theory of reasoned action model (TRA), behavior is determined by an individual’s behavioral intention which in turn is determined by individual attitudes (the sum of beliefs about a particular behavior weighted by evaluations of these beliefs) and subjective norms (the influence of people in one’s social environment) (Chen & Li, 2009). Hence in accordance with TRA, customers’ attitudes towards the web as a sale channel will influence their intention to use it. Three factors that are commonly described to influence customer’s attitudes towards e-commerce are perceived risk, perceived trust and perceived ease of use. 2.2.1 Perceived risk A major difference between purchasing something over the Internet instead of in a physical marketplace is that the customer may have to interact with a vendor which they have never met before and buy product that they cannot touch or feel. The customers face a risk because the information given from the vendor may not be reliable and there could be uncertainties about the identity of the online trading parties and the product quality (Chen & Li, 2009; Belkhamza & Wafa, 2009). Perceiving risk with the online transaction may give the customer a feeling of lack of behavioral and environmental control which in turn may influence their e-commerce usage intention negatively (Belkhamza & Wafa, 2009). 15 The perceived risk of e-commerce is also connected to a perceived lack of security on the Internet. Data gathering by marketers to track customers' online activities and buying patterns are increasing as the e-commerce market grow (Jiang & Sun, 2009). Customer’s personal information such as credit card information, names, addresses and phone numbers are gathered and then used by vendors to reach customers in personalized advertising campaigns. Hence the customers concern for their own privacy could also be considered a risk in e-commerce. Privacy information protection is something that customers are concerned with and research shows that two-thirds of ecommerce consumers are worried about protecting personal information online. The worries are connected to information storage, transmission and the use of personal information (Chen & Li, 2009). Jarvenpaa & Rao (2006) summarizes e-commerce risks in three groups: Privacy risks: Meaning that the customers personal and financial information may be stolen or used by altered or used be a third part vendor. Technology risks: Meaning that the vendors system for ordering, payment and information search may falter. Retailer opportunism risk: Meaning that the vendor intentionally misbehave by for instance giving the wrong information, using private information, breaking sales agreement etc. 2.2.2 Perceived trust Closely connected to perceived risks is perceived trust. Trust is an important factor as soon as there are risks, uncertainties or interdependence involved and it is a prerequisite for any long-term business relationship. Trust between customers and vendors depend on the level of risk perceived by the customer as well as the customer´s perceived level of control of the information that she has to share with the vendor. (Palvia, 2009) Since customers often worries about net frauds and difficulties of returning unsatisfying products etc they are more reluctant to buy products from unfamiliar web vendors. Because of this, trust building is an important issue in e-commerce which is also shown by studies that ranks lack of trust as the number one barrier to e-commerce (Kim et al., 2008). Trust is a big factor that influence and can be connected to many motivational factors. In earlier studies, factors that has been shown to influence trust is: Previous transaction experience, perceived security, privacy concerns, perceived system reliability and reputation (Kim et al., 2008) As Chen & Li (2009) states a majority of studies use a reasoning where they first identifies factors that influence consumer trust and then treat trust as an independent variable for the dependent variable WTB (willingness to buy). 16 2.2.3 Perceived ease of use Perceived ease of use is derived from the technology acceptance model (TAM) which is one of the most influential extensions of TRA. It addresses the issue of how users come to accept and use technology. It can be defined as the degree to which a person believes that using a particular technology will be free of effort (Davis et al., 1989). Chen & Li (2009) treated ease of use as one of the main variables to be influential on willingness to buy products over the Internet and found support in their study. Also Palvia (2009) concluded that perceived ease of use has impacts both on perceived usefulness and usage and attitude towards vendor websites. Kim et al. (2008) showed that costumers perceived self-efficacy of online transactions had an impact on how confident they are likely to be in an e-commerce setting and how likely they are to be intimidated by the possible problems. Their results also showed that perceived self-efficacy of online transactions had a negative influence on perceived risk and a positive influence on perceived trust. 2.3 What is a video game? This section will give a quick overview of what a video game is and a discussion about a definition for the term is held. Defining what a video game is may seem easy but it is actually quite hard. There is a surprising confusion among consumers as well as producers of video games what constitutes a video game. Part of the problem arises from the enormous amount of different game types that exists under this label (Newman, 2004). It’s sometimes difficult, if not impossible, to see the similarities between different video games. For instance, how is the action filled video game Doom, a computer game where you control a soldier through a maze-like dungeon while taking down hordes of enemies, similar to a word puzzle game played on your mobile phone? What makes a definition even harder is the fact that a perfect model for understanding games in general, not only video games, has still not seen the light of day. The German philosopher Ludwig Wittgenstein (1889–1951) claimed that there is no common definition that would include all “games” (Egenfeldt-Nielsen, 2008). Egenfeldt-Nielsen (2008) concludes that even if there is no “correct” definition of the term, there is a good deal of overlap between the definitions proposed in past literature. Firstly, the majorities of game definitions focus on games as rule systems and are unconcerned with representation, hence what makes a video game a game is not the way it is displayed on the screen. Secondly, a requirement which is most useful when distinguishing games from other activities is that events or actions should be evaluated. In other words, games should have goals specified by the game design. This requirement however is a bit problematic since there are video games that are designed but have no specific goals (one example being the virtual world Second Life). This requirement is also too wide since there are designed experiences with goals that are not considered games, like for instance a university exam. 17 The best way of finding a model for understanding video games is probably to settle with a pragmatic approach. A model like this, that tried to capture the essence of video games, emerged out of several workshops held at the Game Development Conference in California between 2001 and 2004 (Egenfeldt-Nielsen, 2008). Robin Hunick, Marc LeBlanc and Robert Zubeck presented a model that separates video games into three dimensions. Mechanics: This is the rules and the basic code of the game. It’s not what you hear or see but rather the information that constructs the video game. Dynamics: This is the way the video game plays based on the mechanics. It’s the events that occur and is experienced by the player. Aesthetics: This is the emotional responses invoked by the player as she interacts with the game. The elements that attract us to games are: Sensation (game as sense-pleasure) Fantasy (game as make-believe) Narrative (game as drama) Challenge (game as obstacle course) Fellowship (game as social framework) Discovery (game as uncharted territory) Expression (game as self-discovery) Submission (game as pastime) A video game will usually offer some of these pleasures but not all of them. Now that the definition is somewhat clearer we should take a quick look on different types of video games: Console games: A console is a hardware that is connected to the television set. A game can then be plugged into to console. The three largest consoles to date are: Wii by Nintendo, Xbox 360 by Microsoft and Playstation 3 by Sony. Computer games: This is a game that can be played on the computer. Sometimes the same game titles are available both on consoles and computers. Massive Multi-Player Online Games (MMOs): These are games that connect thousands of players together in a virtual world. Players can meet and interact in the world in different ways. These games are mostly common for computers but lately some console titles have emerged too. Hand-held games: These are games that are played with portable devices such as Gameboy by Nintendo or PSP by Sony. Mobile games can also be included in this category. (Erickson, 2008) A last remark is that the word “video game” is problematic itself since the industry cannot agree on single name for its products (Newman, 2004). The two most common names used are “video games” or “computer games”. Some say that the term video game only covers console games while computer games only refer to games played on the computer (Alpert, 2007). In this paper however the term video game is used in its wider sense covering all the game types stated above. 18 2.4 What is a business model? This section will discuss what a business model is. Then six business models for video games will be presented. Li (2007) presents more than a dozen different definitions for the term business model. The most common definitions captures that a business model is a plan, system or story that explains how a business works. When looking at different definitions, this question involves: The relationships between the business and its environment (consumers, allies and suppliers). The description of products and services provided by the business. The way in which the business profits. Laudon & Traver (2002), who use a similar definition as above, presents eight key ingredients of a business model. These are: Value proposition Why should the customer buy from you? Revenue model How will you earn money? Market opportunity What marketplace do you intend to serve, and what is its size? Who else occupies your intended marketplace? Competitive environment Competitive advantage Market strategy What special advantages does your firm bring to the marketplace? How do you plan to promote your products or services? Organizational development What types of organizational structures are necessary? Management team What kinds of experiences and background are important for the company’s leaders to have? Figure 4 – Key ingredients of a business model. (Laudon & Traver, 2002) 19 Of these eight ingredients, the one which is of most interest for this paper is the revenue model. The five primary e-commerce revenue models described by Laudon & Traver (2002) are: Advertising: Earning money from advertisers in exchange for advertisement. Subscription: Earning money from subscribers in exchange for access to content or services. Transaction Fee: Earning money for enabling or executing transactions between sellers and buyers. One example of a company using this model is eBay.com. Sales: Earning money by selling products, information or services. Affiliate: Earning money by connecting companies with potential customers and receiving a referral fee or percentage of revenue. There are a lot of different business models within the video game industry. Besides the classic model of selling video games in boxed product through retail, there are various possibilities for video game companies to earn money. Video games are digital products, and there by intangible, which give the vendors the option to deliver them online to the consumer. This fact together with the close relation between video games computers and the Internet results in some interesting possibilities for new business models, new markets and new growth (Sharp & Rowe, 2006). Perry (2008) presents, not less then, 29 different business models for video games which he calls potential video game monetization methods. These methods are categorized with a heavy focus on Laudon & Travers (2002) second key ingredient of a business model; the revenue model. The first research question in this paper is to classify business models for video games. This classification will be presented in detail in the discussion chapter. For an easier read through the major business models for video games that we have found and classified will however be presented below: 2.4.1 Retail model for video games This is the classic way of selling video games boxed on DVD or CD-rom in a physical store or by shipment. This business model does not require the use of Internet. 2.4.2 Digital distribution model for video games Some video games can be bought online and be delivered instantly over the Internet as a digital product. There are a number of different services using a model like this. One example is Microsoft’s Xbox Live Marketplace that was introduced for the Xbox 360 console in November 2005. With Xbox Live the customer can among other things connect their Xbox console to the Internet and gain access to a large amount of video games. The customer can buy digital currency called “Microsoft Points” with their credit cards which are then used in the virtual marketplace. Xbox Live Marketplace is mostly targeted towards console games but since November 2008 the service is also available for computer games and the support for more platforms is planned. (Will, 2009) 20 Another example of a service like this is Steam from the game development company Valve. Steam is an online service that is similar to Xbox Live but only focused on video games for computers. Through the Steam application; Valve’s online store, the games the consumer has already bought, a chat were the consumer can talk to friends who also use Steam, and several Steam communities can be accessed from the same interface. The service was introduced in September 2003 and except for Valves own titles the marketplace includes more than 900 videogame titles from different companies. Steam does not use digital currency instead all products can be bought directly by credit card. 2.4.3 Subscription model for video games Some video games are financed by subscriptions. This is when the customer is charged a given amount during a given period of time (often on a monthly basis) to be able to play the video game. Sometimes these games come with an initial starting cost and sometimes they don’t. This finance method is almost exclusively used for Massive Multi-Player Online Games (MMOs). The video game that made the MMO genre what it is today is World of Warcraft by the game development company Blizzard Entertainment. This video game was released in November 2004 and has more than 11 million players who pay a monthly fee. These types of video games usually have a digital currency that can be used within the game world but there are no official channels to buy or exchange the digital currency into real money. Even so there have been countless examples were real money have been used to buy digital currency or digital artifacts within these game worlds (Chung, 2009). In these cases the deals have been made between two or more players without the involvement or notice of the video game company hence these transactions are not a part of the business model. 21 2.4.4 Player to player trading model for video games There are some MMOs however which business models are based on the fact that the digital currency can be exchanged into real money and vice versa. The game development companies make money from the purchases that take place between the consumers inside the game world and acts like a sort of bank. Videogames within this business model are usually free to download and play, but to be able to really appreciate the video game the consumer has to buy in-game currency with real money. The consumers are given a whole new identity and a whole new world in which they can spend but also make money. Since these video games has a “real economy” the consumers can make money in pretty much every way they could make money in the real world. They could create and trade digital artifacts, get a job in a virtual bar, sell advertisements etc. There have even been examples of large companies who invest allot of money to open up digital stores within game worlds. Two examples of this is the automobile company Nissan who opened a car dealership and the Swedish government who has created a virtual embassy inside the digital universe of Second life (Calypso, 2007). Second life was released in June 2003 by Linden Lab and describes itself as Internets largest user-created 3d world community. The video game offers a free membership and a premium membership that has a monthly cost but gives the consumer more freedom and opportunities inside the game world. As described above Second Life, has its own in-game currency that can be exchanged into real money. Another game similar to Second Life is Project Entropia which was released by MindArk in the beginning of 2003. Both these games are developed in Sweden. (Chung, 2009) 2.4.5 Micro-transactions model for video games There is yet another type of video game which business model is based on the fact that the consumers can purchase additional digital artifacts to their video game. These artifacts can be new in-game items, new game challenges, new player characters etc. In this aspect it is similar to the player to player trading model. The difference lies in that once real money has been exchanged into digital currency they cannot be changed back. Hence the consumers are only buyers, not sellers. Just like player to player trading games, games within the micro-transactions model are usually free to download and play but by buying digital currency the players can enhance their experience. The idea behind video games within this business model is often to offer extra content that doesn’t in a major way affect how the game is played. Instead the digital artifacts being bought have their value strictly within the social atmosphere of the game. For instance a player can buy a fun hat or a new costume for her in-game character strictly for the amusement of wearing a hat in-game. This concept may sound strange but analysts suggest the global market for 2009 to be worth more than 500 million dollars (Bailey, 2010). 22 These social video games are often played and paid for through social networks like FaceBook. The game developers make great use of the social networks which underlying concepts are ideal for viral marketing. To easier grasp the market potentials one can look at Zynga’s FarmVille which is a small free to play video game that allows members of Facebook to manage a virtual farm by planting, growing and harvesting virtual crops and trees, and raising livestock. For real money the players can buy extra items such as tractors or unique plants. Since late 2009 the video game has exceeded 70 million monthly active users hence it is one of the most popular online games in the world. (Bailey, 2010) 2.4.6 Advertising model for video games Finally there are some video games that are completely or partly financed through advertising, which is done by displaying brand names or banners in-game. When placing advertisements in software an advertisement agency normally functions as an intermediary between the business environment wanting to advertise and software producers wanting to place ads in their software (Mjörner & Bosrup, 2004). The software the producers can then leave an open spot in their application where ads can be displayed using a software module that can also measure how many times the ads has been shown, clicked etc. When it comes to video games there is also the possibility to not display ads explicitly but instead have it woven into the core concept of the game. This is mostly common in sport and racing games that can naturally include brand names in their game design (Mjörner & Bosrup, 2004). Regardless of how the advertisement is displayed the primary source of revenue is not the end-user in a strict advertisement business model. When using this model both the end-users (who must appreciate the software or else they won’t see the ads) and the advertisers (who are the source of income) must be pleased (Mjörner & Bosrup, 2004). 23 3. Method This section of the paper the method that’s been chosen in line with the thesis purpose and research questions will be presented. The purpose of the chapter is to give the reader a chance to make her own evaluation of the reliability of the work process. 3.1 Choice of method In the gathering of the empirical data our intention is to use surveys. Hence it is the consumers of video games which are the focus of our study. We want to collect input from a wide range of people. We are interested in consumers’ opinions, attitudes and knowledge about the different business models for video games. To capture these opinions, attitudes and their general knowledge we choose to conduct surveys with at least 100 videogame consumers. If you use words like how long, how many, how often, you should do a quantitative study (Trost, 2001). We want to know how many of these consumers know about these business models and how many who use them. We are also interested if the selection dislike certain business models and, if so, for what reasons. The survey opens possibility for the consumers to express their own feelings and attitudes towards the business models by using open questions. Open questions are questions were the respondents don’t get any answering alternatives and they are interesting because you get information about the respondents associations about a certain subject (Trost, 2001). This study could be done with complementary interviews with personnel working with video game distribution but since our focus lies strictly on the consumer’s point of view and their feelings and projections on the business models this is not going to be done. We choose an online survey to answer our research question because we wanted to find structure, pattern and similarities within our data. According to Eggeby et. Al. (1999) it is the researcher’s job to find structure, similarities, patterns and differences within the data. Quantitative methods are to a great help when you want to find a structure in the data you receive. Some might argue that our research could be done with only interviews with consumers, to capture the essence of their attitudes and feelings towards video games but since we wanted to find as many consumers that have different knowledge and background within the field we decided not to use that method. However we believe that attitudes and feelings are better captured in qualitative data so in our choice of method we chose to use method triangulation in order to answer our research questions. Holme et. Al. (1997) advocates the use of method triangulation were you combine theoretical perspectives and methodologies to answer the research question you have a higher rate to claim that the conclusions are secure since they have been confirmed in two ways. In our case we used documentation analysis to classify business models for video games for our first research question and surveys to answer our second research question. 24 3.2 Procedure Before the survey was structured it was important for us to gain valuable information about the subject we wanted to illustrate in our study. The literature was found through printed literature and article searches through the help of Lund’s Universities article database ELIN and Lund’s Universities course libraries search database LOVISA. The search words we used were; video games, business models, e-commerce, B2C commerce, digital artifacts and micro economics. Internet has also been used as a source of information to find relevant articles and information about the field. The purpose with the literature gathering was to get a theoretical framework for our study and to answer our research questions with a survey composed from this framework. When we had all the information needed for our theoretical framework we created the survey. We started to send out the survey on different social networking forums for video games (fz.se, gamedev.org). We also send out the survey on other social networks (such as Facebook and sweclockers.com) to get a hold of consumers that we thought played less since they would probably not be active on video game forums. To use Facebook was a natural choice since a lot of people use it and it has a wide range of people all over the world and in different age groups and genders. The survey was sent out through these social networks and the aim was to gain at least 100 answers. 3.2.1 Survey We decided to use surveys to answer our research questions about the different business models. The reason for that was to get as many answers as possible and to find as many video gaming consumers as possible. Since the video gaming social networks reaches beyond country boarders and it is not linked to any specific country, age or gender we wanted to find all sorts of consumers through these social networks. We used a standardized but structured survey with both closed and open questions. There is always a critique towards the open questions, it is said that they are best captured in an interaction between the interviewee and the interviewer, it’s time consuming to categorize all of the open questions and there is always a higher rate of fall off (Trost,2001). However we believed that open questions were a good way to capture many consumers’ attitudes and feelings in more detail. Some of the closed questions used in the survey were priority questions were the respondents could rank items. Scale types of questions are a good way to measure attitudes and opinions of a population. But it doesn’t work well in all circumstances because some people are not capable of doing an order of priority and there will be a problem with the processing of data (Ejertsson, 2005). 25 We used an introductory text for the survey so we could explain all of our concepts and the meaning of them so there would be no misunderstandings of the different business models. We send out a letter to all the respondents to describe the purpose of the survey, with an explanation that their answers were confidential and a gratitude for their time and effort (Ejertsson, 2005; Trost, 2001). The survey is build upon our categorization of the business models were questions 5,6, 8 d) and e) tries to answer our second research question. 3.2.2 Survey preferences We used a ranking scale to measure respondents’ attitudes about the different business models, which ones they prefer the most and which one they prefer the least. We had an open question to one of the ranking questions, question 6, since we wanted them to explain with their own words why they choose the first one as their top alternative and why they choose the least one as their last. The open question were used since we didn't want to put words in the respondents’ minds but preferred that they would think for themselves. At the open questions at question 8 we choose not to put in the alternatives don't know and don't want to answer because we wanted to avoid fall offs. Since we were looking for general attitudes we believed that a ranking of business models should be possible even if you as a consumer have not tested them all. Some of the respondents did not share this belief however which led some fall of in the ranking questions. 3.2.3 Population and selection In our population our intention was not to narrow us down so much since we want to find all types of video game consumers and we are not bound to any specific country or age in our research questions. When you gather data through a survey it is important to, in a righteous way, use the information to speak about the whole population. In order to do that the population must represent a statistic selection of the population. The selection had to be a miniature of the population (Trost, 2001). The selection procedure was a combination of an accidental sample and a strategical sample. An accidental sample is when you set up the survey anywhere where you think that you can find people that are willing to answer your question. With the intention that we wanted to come in contact with as many people as possible that were interested in answering our survey, we placed the survey on different video gaming forums on the Internet and because we didn't want to get a high rate of bias we put out the survey on other social networking sites. Our survey has a high rate of qualitative questions and in a survey like that it can be hard to get people to answer it as stated by Trost (2001) but since we used sites that we know we would find people interested in the subject they were more likely to put down the effort in answering the questions. 26 3.2.4 Processing of data We chose SPSS 15.0 for Windows as a tool for processing the collected data. SPSS is a well developed statistical program and its well established and used in universities. With the help of Brymans (2008) book and Andersson et. als (2007) book we could understand how to use the program in the best way possible for our study. We were warned that the use of open questions together with the closed questions could result in data that would be hard to process and we found that also was the case. In the question form it was possible to write as much as you wanted and in some cases people wrote way too much and in others they didn’t write anything or only few words. But still we could find some similarities in all the answers which helped us to categorize the different answers into 4-6 topics. This is presented in a table in appendix 2. Holme et. al. (1997) states that in some surveys the qualitative information could be passably expansive and in those cases the survey researcher could take out examples of respondents who could be typical in some reference or show of literal expressions from the respondents. When we realized that we would lose valuable information from our open questions if we only presented the answers quantitative with the help of SPSS, we choose to have them all collected in appendix 1 categorized after every open question and the participants number. For example person 1, person 2 etc. We chose to present them in the empirical part as according to Holme et. Al (1997) with quotes from the respondents. 3.2.5 Presentation of data We presented the raw quantitative data into staples and diagrams because it is easier to make the data descriptive to an outside reader and because it is the most economical and information giving technique to declare results in a scientific report (Backman, 2009). We used bar diagrams to show off the results because it can be used on all types of numerical data and it’s an easy way to compare different answers (Backman, 2009). The qualitative data will be handled differently and will be presented with the help of quotes and summaries of different common opinions which are representative for the most common opinion among the respondents (Holme, 1997). 27 3.2.6 Ethics Holme et. Al (1997) and Kvale (1997) agrees when they claims that ethics is an important stage in research science and a researcher has to know how to relate to ethical guidelines when conducting research science. Some important guidelines are informed consent, and confidentiality. When dealing with informed consent the person that participates in the study have to be informed about the purpose of the study and what risks this can lead to and how the answers are going to be used and who will take part of them. The person must also have the opportunity to take a stand in what information they want to share and what they want to keep to themselves (Holme et al., 1997). As stated before we did inform all of the participants about the purpose of the study and what it will be used for when we sent out the survey on the different social networking sites. Because our survey is internet based we didn’t have to worry about confidentiality and informed consent because all of the participants that take part of the study are already identity protected, which means that we never had to ask them any questions that might lead to personal information being revealed. The internet helps the participants to keep their anonymity when answering our questions. 28 4. Empirical findings This chapter is intended to present the results of the method implementation. The essential answers from the survey will be presented. Below we present the questions from our survey that we believe are of value for our purpose and research questions. One question in the survey concerning what video games the respondents were playing has not been used since we don’t believe this question will give us any necessary insights needed for our purpose. The empirical results from the survey, both transcriptions and categorization of the answers for the open questions can be found in appendix 1 and appendix 2. The survey and all the questions can be found in appendix 3. If there are missing answers for a question these will be presented next to it. There are different reasons for missing answers. The most common being that the question were left blank but in a few occasion the answer were removed because the respondent had obviously misunderstood or not read the question before answering. 4.1 Results from the closed survey questions Below the results for the closed survey questions are presented. The questions are formulated in the same way as they were in the survey. The questions are manly presented with frequency tables and in some cases table charts. Question 1 – What is your gender and age? Gender Frequency Percent Male 91 87,5 Female 13 12,5 Total 104 100,0 Valid 103 Age Missing 1 Mean 23,26 Median 23,00 Question 1 shows that 91 (87.5%) of the 104 respondents in the survey were males. The average age of the respondents was 23 years old. Missing answers: 1. 29 Question 2- Rate your overall experience and skill level using computers, Internet and desktop applications. Skill level Frequency Percent Valid Below avarage 1 1,0 Avarage 9 8,7 Above avarage 38 36,5 Highly above avarage 56 53,8 Total 104 100,0 Question 2 shows that 56 (54%) of the 104 respondents rated themselves as having a skill level that is highly above average. In total, 94 (90%) of the respondents rated themselves to have a skill level at least above average. 30 Question 3- How often do you purchase products/services on the Internet? E-commerce usages Frequency Percent More than once a week 4 3,8 Less than once a week 11 10,6 More than once a month 42 40,4 Less than once a month 24 23,1 More than once every 3 months 10 9,6 More than once a year 10 9,6 Less than once a year 3 2,9 Total 104 100,0 Question 3 shows that 42 (40%) of the 104 respondents answered that they purchased products or services on the Internet a little more than once a month. Adding the answers for respondents that purchased more often than that, the result shows that 57 (55%) of the respondents where using e-commerce more than once a month. 31 Question 4 - Approximately how many hours do you spend playing video games? Video game usage Frequency Percent more than 10 h a week 53 51,0 less than 10 h a week 16 15,4 less than 5 h a week 11 10,6 less than 1 h a week 7 6,7 less than 1 h a month 9 8,7 Never 8 7,7 Total 104 100,0 Question 4 shows that 53 (51%) of the 104 respondents play video games for more than 10 hours a week. 32 Question 5A - In this survey we have explained different business models for video games, which ones had you heard of before reading the survey? Awareness of business models Frequency Percent Digital distribution model 90 90,9 Retail model 97 98 Advertisement model 77 77,8 Subscription model 90 90,9 Micro transaction model 73 73,7 Player-to-player trading model 63 63,6 100 90 80 70 60 50 40 30 20 10 0 Digital distribution Retail Advertisement Subscription Micro-transactions Player-to-player trading Question 5A shows that the video game business model that most respondents were aware of was the retail model, 97 (98%) out of 99 respondents. The bottom three models, the advertisement, micro-transactions and player-to-player trading model, were familiar to 77 (78%), 73 (74%) and 63 (64%) of the respondents. Answers missing: 5. 33 Question 5B – Which business models have you experienced by playing/purchasing video games? Experience of business models Frequency Percent Digital distribution model 74 74,7 Retail model 93 93,9 Advertisement model 47 47,5 Subscription model 51 51,5 Micro transaction model 38 38,4 Player-to-player trading model 15 15,3 100 90 80 70 60 50 40 30 20 10 0 Digital distribution Retail Advertisement Subscription Micro-transactions Player-to-player trading Question 5B shows that the video game business model that most respondents had experience of was the retail model, 93 (94%) out of 99 respondents. Second most experienced business model was the digital distribution model that 74 (75%) of the respondents had used. The video game business model that fewest respondents had ever used was the player-to-player trade model that had only been used by 15 (15%) respondents. Answers missing: 5. 34 Question 6- Which one of these business models do you prefer the most? (Rank them, with number one being your favorite pick). With this question we had the respondents rank the six business models, starting with the one they believed was the best model and ending with the one they favored the least. In the table below we have rated the highest rank with 6 points, second rank with 5 points etc ending up with rank number 6 being worth only 1 point. Ranking of business models Points Digital distribution model 472 Retail model 467 Advertisement model 314 Subscription model 280 Micro transaction model 245 Player-to-player trading model 220 500 450 400 350 300 250 200 150 100 50 0 Digital distribution Retail Advertisement Subscription Microtransactions Player-to-player trading Question 6 shows that the digital distribution model got most points in the ranking (472 points) closely followed by the retail model (467 points). The model that most respondents ranked as their favorite model was the digital distribution model with 46 out of 96 (48%) respondents ranking it first place. The model that most respondents ranked as their least favorite model was the player-to-player model with 34 out of 96 (37%) respondents ranking it in last place. Answers missing: 8. 35 Question 7- What are your main concerns when purchasing video games online? (Rank them, with number one being the most important). This question follows the same logic as the previous one. We had our respondents rank their main concerns when purchasing video games online. Highest rank is rewarded with 6 points, second rank with 5 points etc ending up with rank number 6 being worth only 1 point. Main concerns Points That the source or brand I am purchasing from is trustworthy. 375 That I have been able to test it before purchasing. 364 That my friends play it. 361 That it is cheap. 336 That the business models paying method is easy to use. 291 That it comes from a well known brand. 289 500 450 400 350 300 250 200 150 100 50 0 Trustworthiness Test before buy Friends play Price Easy to use Known brand Question 7 shows that the perceived trustworthiness of the source or brand got most points in the ranking (375points) closely followed by if the respondents had been giving the opportunity to test the video game before buying (364 points) and if the respondents friends played the same video games (361 points). The concern that most respondents ranked as their most important was if they had been given opportunity to test before buying 25 out of 96 (26%) respondents ranking it in first place. The model that most respondents ranked as their least important concern was if the product came from a well known brand with 24 out of 96 (25%) respondents ranking it in last place. Answers missing: 8. 36 4.2 Results for the open survey questions Here we present the most valuable answers from the open questions in the survey. The answers has been structured according to question and person answered. We took out the most answered alternative and the second most answered so we could find the most popular/ the most known and the least popular/ least known business model. 4.2.1 Attitudes towards video game business models The survey shows that the most favorable business model is digital distribution because it is easy and fast and because most consumers don't like hard copies and most of the consumers agree about that it is cheaper. ”Digital Distro is my favorite because it's fast, easy and gives instant access to a product. Plus via steam I tend to pick up games I want for less than I would pay for them over the counter, since I can check sale prices more easily than at retail” (Person 43, Appendix 1) The second most favorable was retail because consumers like it when they have a physical copy to relate to. The remaining four business models are ranked lower with the player-to-player model being ranked the lowest. There were several reasons given for these rankings. Starting out with the advertisement model, people were annoyed by ads in-game. The subscription model was criticized for being expensive and forcing consumers to play on a regular basis in order to be fun. The critique against microtransaction model was that the consumers were unsure if money spent in-game benefited the players and there were also comments about purchasing of in game items resulted in an unfair advantage for player who spend more money. This last complaint was also given to the player-to-player trading model. On the question if the respondents believed that any business model results in lower quality/less fun video games there was a tie between two opinions. The first one states that business models does not influence the game experience and the second states that advertisement financed video games is of lower quality and are destroyed by ads/product placements. ”Advertising based games are often either lower quality due to a lower budget or less fun because of the interruption of adertisements ” (Person 25, Appendix) The micro-transaction model was also one of the most commented model on this question because of the consumers perceived that the games got less fun because the game permitted the players with more money an unfair advantage in the game. 37 4.2.2 Attitudes towards e-commerce The main reason why the consumers in our study purchase products on the Internet is because its easy and fast, cheaper than in a store and because they have a wider range of products to choose from. Most people answered like these two: ”Easier than going to a shop, and often much cheaper, and more instant ” (Person 21, Appendix 1) ”Ease of use, usually much lower prices, much greater number of products available. Also, at least here in Sweden, some of the e-tailers have customer service and support that is far superior to physical retailers. ” (Person 27, Appendix1 ) 4.2.3 Attitude towards possible e-commerce risks Most people were not concerned about the possible risks when purchasing video games online. The most common answer was that they were not concerned because they only bought from large well-known companies which resulted in less risk. A large amount of the respondents were also not concerned because they believed that they had enough knowledge and experience to avoid frauds. ”I only use trustworthy sites, were I can read comments and reviews from others. Answer: No. ” (Person 29, Appendix 1) The general opinion among consumer were that the risk is the same for all business models and in some cases because they think that they have enough knowledge to avoid the risks. One model that stuck out the most was the retail model which some believed was less risky sense it it’s safer to buy hard copy from a vendor, which you later could return to a vendor to get help if anything is wrong with it. ”Retail is always the best, because you get the physical product in your hand. And you got a physical store to return to if something is wrong. ” (Person 83, Appendix 1) The most risky was the Player-to-player model according to the consumers, with the motivation that it’s more risky when you transact between players and you have no vendor to turn to if something is wrong. ”I believe that P2P trading is least secure since it's easier to get away with scamming in a game since you don't know the person you're trading with and since it's a new phenomenon it's hard to get help from police or court. ”(Person 31, Appendix 1) 38 5. Discussion This part of the report will include a discussion around the purpose of this thesis. First our classification of video game business models will be presented together with a discussion about consumer perspectives (awareness, experience and attitude) on them. Secondly, a general analysis of our empirical findings will be presented. 5.1 Classification of video game business models When classifying different video game business models, with the help of Perry (2008), we found six core business models for video games. These six models are shaped with the use of a theoretical research model composed by theories and concepts presented in the earlier section of the literature review. Especially four concepts have been used in the theoretical research model. Firstly an overall classification on what major ecommerce category the video game business model belongs to, that is to say if the business model concerns B2B (business to business), B2C (business to customer) and/or C2C (customer to customer). Secondly the minimum stage of e-commerce presented by Beynon-Davies (2004) has been defined for the business models. Third, the model for classifying digital products by Hiu and Chau (2002) has been used to define what kind of digital product video games within the different business models can be labeled as. And last the presented video game business models has been placed under one of the revenue models presented by Laudon and Traver (2002). We believe that most video games are financed through one or more of these six core business models. That is to say that a model can be used by companies simultaneously on the same product. The business models can be combined for the same video game (for instance a video game bought through retail that is also partly financed by in-game advertising). The six core video game business models that we have found are: Retail Digital distribution Subscription Player to player trading Micro-Transactions Advertising On the following page a table is presented that gives an overview of the classification of the different business models. This table is only meant to give a quick indication. To understand the classification more thoroughly and read about consumer perspectives (awareness, experience and attitudes) for every model you are recommended to read the following chapters divided for every model. 39 Figure 5 – Teoretical research model applied on the presented business models for video games. 40 5.1.1 Classification of the retail model This is the only one of the six business models that doesn’t necessarily have to involve the use of Internet hence this business model can be used by a company who hasn’t even entered the first stage of B2C e-commerce. When looking at phases of commerce the retail model differ quite much, not only because of the very large number of different intermediators but also because these intermediators are in different B2C stages. Boxed video games can be bought in small stores but also from large sites such as Amazon. The first may very well have taken no steps towards e-commerce while the later is known for its advanced and early use of the Internet including the sixth stage; customer profiling and referencing (Goel, 2007). The phases of commerce for a video game in the retail model offers nothing new compared to any other product purchase in a physical store or by ordering. Even if this area can be interesting this paper will not discuss this in any more detail than what has already been covered in the previous sections. 5.1.2 Consumer perspectives on the retail model The empirical research showed that almost everyone in our study was aware of the retail model. In other words they knew that video games can be bought from a regular vendor through a physical shop. These results are not very surprising since this business model has been around for quite a while. The research also shows that this business model has been widely used. Almost everyone in the study had at least once bought a video game from a vendor through a physical store. The attitudes towards the retail model were very good. Of all the business models this one got a score almost as high as the top scoring business model which was digital distribution. Many arguments were given in support for the retail model. Many respondents simply claimed that they liked having hard copies of their video games including the box and the manual for the game. The reasons for this were something that seemed hard to explain and they often involved some kind of feeling. One respondent explained that the video game seemed more like his own if he owned it as a hard copy. Another one compared the feeling with the one some people still have for vinyl records. Other more concrete reasons given for preferring the retail model was that some people still considered it safer since you could always return to your vendor if you were unhappy with your product in any way and it felt safer to own your video game as a hard copy. 41 5.1.3 Classification of the digital distribution model As mentioned before, video games are intangible product hence they can be delivered to the consumer over the Internet. The framework presented by Hiu and Chau (2002) shows three different classes of intangible goods (Tools and utilities, content based and online services) which differed in three characteristics (Delivery mode, granularity and trialability). The question arises; to which classification does video games belong? This question is not very easy to answer due to problems of finding a definition of what a game really is. If games are to be looked upon as something the consumer only participate in for the enjoyment factor it would seem that it cannot be placed under the tools and utilities class since it doesn’t help the consumer with a specific goal or task. It would be less problematic however to place it in the content based product class since video games clearly contain information with the purpose to entertain, or even educate, the consumer. For the third class; online services, not all but definitely some video games gives the consumer access to useful resources that are not part of the product itself. These are video games that connect several players (consumers) from different computers and consoles to the same game. The resource provided by these video games is the social interaction with the other players. When following this line of thought, the delivery mode for a video game could therefore either be by a one-time download or be delivered interactively. In our theoretical research model the digital distribution model refers to the way of selling video games over the Internet with one transaction and a one-time download. Of the five primary e-commerce revenue models the digital distribution model will be categorized under sales. When considering the stages of e-commerce it’s quite obvious that companies who use the digital distribution model have at least reached the online delivery stage. Many companies using this model have however also reached the stage of customer profiling and referencing. Both Valve’s Steam and Microsoft’s Xbox Live Marketplace, that were described in the theory chapter, have a big opportunity to keep in contact with their customers in the after sale phase since the consumer will naturally enter their domain every time they play a video game bought by the company. 5.1.4 Consumer perspectives on the digital distribution model The empirical research showed that a large part of the respondents, 9 out of ten, were aware of the possibility of purchasing and receiving video games instantly over the Internet. There were a gap between people that had knowledge about the model and people that had actually used it however. 3 out of 4 people had at least once bought a video game over the Internet to have it delivered to them online as a digital copy. The attitudes toward this model were generally very good. Of all the business models, this model scored the highest among the respondents. The reason most people gave for giving this score was that it was easy and fast. This business model allowed them to buy a video game quick and easy on their own computer with no effort. 42 This way of shopping was also said by some to be highly accessible (you can log on to the shop at any time of the day and you don’t even have to leave your home) and often cheaper than in physical stores. It was also pointed out by some that this model offered the widest range of products, the Internet can obviously offer more products than any physical store ever could. Finally there were some people who simple didn’t like hard copies and found it easier and better to store their games on their hard drive instead of on their shelves. 5.1.5 Classification of the subscription model Returning to the framework by Hiu and Chau (2002) the subscription model fits well into the online service class. All video games provide the consumer with some kind of content but for video games within the subscription model the main idea is the social interaction with other players. Video games within the subscription model, or to be more precise, the value of these video games are delivered to the consumer continually through their interaction and use. For these video games it is also common that the developers deliver new content through frequent updates (this could mean everything from new in-game items, game characters or even cities). Of the five primary e-commerce revenue models the subscription model will not surprisingly be categorized under subscription. There are a few different ways in which the consumers can pay for their subscriptions. The most common are through the use of credit cards but there are also other options like for example buying “game cards” from a physical shop which includes a code that grants the consumer a new period of game time (service usage). The e-commerce stage required for this model is again the online delivery stage. And since the developers have all their consumers connected to their game world (their servers) and all consumers have a player account, this model is also suitable for customer profiling and referencing. 5.1.6 Consumer perspectives on the subscription model The empirical research showed the same figures as the digital distribution model when it came to awareness. 9 out of 10 of our respondents were familiar with the concept of paying for a video game through a subscription. However the gap between people that had knowledge about the model and people that had tested it were even wider than the gap for digital distribution. Only about half our respondents had at least once paid a subscription fee to play a video game of this kind. The attitude toward the subscription model was not as good as for the first two business models. The first two models scored high in the ranking and then there was quite a gap down to the remaining four. The reasons for this general gap could possibly be explained by the fact that people tend to rank the models that they are aware of and has tested, higher than the once that are still unfamiliar to them. Reasons given for not liking the distribution model were that some people simply didn’t like to pay on a regular basis. It was also considered more expensive to play a video game of this kind. 43 5.1.7 Classification of the player to player trading model This business models allow transactions not only between the consumer and the game company but also between consumers and other consumers. As described in earlier the theory chapter, a few big companies has also invested allot of money into game worlds using this model. Hence this business model is not strictly a B2C model but also include C2C and even B2B e-commerce. When looking at the framework by Hiu and Chau (2002), the first thought would be to categorize these types of video games into the online service class because of their many similarities with video games using the subscription model. This observation is not wrong but one must not forget that what are actually being sold are not primarily the player to player trading games themselves but the products and services within these game worlds. It’s hard to fit the player to player trading model into one of the five primary ecommerce revenue models since it is a quite unique and revolutionary business model with possibilities that seems endless. However if you choose a somewhat simplified view, what these video games actually do is enabling communication and money transactions between consumers. With this view the player to player trading model fits well into the Transaction fee revenue model. 5.1.8 Consumer perspectives on the player to player trading model The empirical research showed that 63 percent of the respondents were aware of this model. That makes the player to player trading model the one that fewest people had prior knowledge of. Even fewer people had ever experienced a video game using this business model. Only about 15 percent of the respondents had played a video game of this kind. The attitudes towards this model were also generally bad. The model scored the lowest of all the business models in the ranking and the reasons given were many. A few respondents were simple reluctant to buy digital in-game artifacts with real money. There were also comments about it being unfair that players with allot of money can buy themselves advantages in the game. If you meet a player within the game world who spend allot of real money on the game, chances are high that he or she has an advantage over you. This advantage can be anything from a faster car to a bigger gun. Last but not the least, quite a few respondents argued that this was the most risky business models because of the fact that many transactions took place between players. The risk that a player you don’t know in the real life would try to scam you or in any way fool you into giving him or her your money seemed quite high. 44 5.1.9 Classification of the micro-transactions model Not surprisingly the micro-transactions model requires the e-commerce stage of online delivery since the model relies on the selling of virtual artifacts. An interesting aspect of these video games are how focused they are on the pre sale stage. What these games do best is establishing a really strong marketing presence, by using the viral effect of social networks. Once the position is taken and the video game has a large user base, the company can sell very cheap virtual products that have no real function or use. When applying the framework by Hiu and Chau (2002) this model is very similar to the player to player trade model. The video game itself is most fitting in the online service class but there are a few examples of video games of this kind that does not rely on player interaction and hence are strictly content based products. Once again, one should not forget that the products being sold in this business model are actually the virtual products within the video game and not the video games themselves. Of the 5 primary e-commerce revenue models, the micro-transactions model fits best under sales because money is made by selling products, which could be anything from virtual guns to extra large virtual tomatoes. 5.1.10 Consumer perspectives on the micro-transactions model The empirical research showed that 73 percent of the respondents knew that a business model like this existed and about 38 percent of them had at least once played a video game that used this model. The attitudes towards the model were also quite bad and the reasons given were in many ways similar to the once given to the player to player trading model. Generally people believed the digital in-game artifacts that can be bought for real money resulted in an unfair video game were players with allot of money can buy themselves advantages. It was also stated that this model was more risky since more transactions took place. There were also some opinions that these video games were only after the consumer’s money without really giving anything in return, the money spent did not go to the benefit of the players the video games were generally of low quality. 45 5.1.11 Classification of the advertising model As stated in the theory chapter this business model must please both the end-users (who must appreciate the software or else they won’t see the ads) and the advertisers (who are the source of income). This means that the advertisement model can be viewed as combination of a B2C and a B2B e-commerce model. Of the five primary e-commerce revenue models the advertisement model fits quite obviously into advertising. Since almost any type of video game can include advertisement this business model is however quite hard to classify. As stated before, all video games, also those financed with advertisement, have some kind of content hence they are content based products according to the framework of Hiu and Chau (2002). An advertisement financed video game can also be an online service however since these games may very well be of the social kind were players are connected to each other through a server. Same logic goes for the minimum e-commerce stage required. Since almost any video game can include advertisements no minimum stage of ecommerce can be said to be re required. 5.1.12 Consumer perspectives on the advertising model The empirical research showed that 77 percent of the respondents knew that a business model like this existed and about 47 percent of them had at least once played a video game that included in-game advertisement. These results might not be accurate however since it’s not obvious for a consumer when a video game is partly financed by advertisement, especially not when the advertisement is woven into the core concept of the game. The attitudes towards the model were quite bad in general but with some exceptions. Many people believed that this business model resulted in video games of less quality that was not as fun as video games you paid for. On the other hand there were a few claiming that a free game is always a good game. There were also comments about this model being a safer business model since no money transactions had to take place. This last thought was contradicted by other comments that claimed that this model had the higher risk because companies using it sold your user information and displayed misleading ads. 46 5.2 General analysis of the survey After thorough analysis of the survey result we realized that the male gender was clearly over-represented. This is not a problem for the result itself because we are looking for the consumer of video games and this is not gender dependent, but still we could definitely see an over percentage of men in our survey. This could mean that we might not have found the female video gaming consumers on the sites we used or that video gaming area is still male dependent? Most of the answers we got was from video gaming forums which could mean that the male gender is more interested to keep them self's up to date about this research field or have a stronger need to express their knowledge about video games business models with each other . Most of these users play a lot of video games and feel that they have a great computer skill which means that this research is angled to these types of video gaming consumers. A reason to why we could have an over percentage of these types of consumers might be that they are more interested in answering our survey. People that are not interested in this research field might have chosen to not participate. The reason to why most of them have great computer skills could be dependent on the age. The mean is 23 years old and in this day an age most people at that age are grown up with computers and in that way also feel that they have a higher rate of computer skills, because they are used to administer it on a daily basis. In the question about possible risks when purchasing video games through these video gaming business models most people answer that they are concerned but there is even a higher rate of people that say that they are not concerned. However many consumers still say that they are skeptical to different video gaming sites when purchasing video games. As stated by person 29 (Appendix 1) ”I only use trustworthy sites, were I can read comments and reviews from others. Answer: No. ” As stated earlier in the paper by Chen & Li (2009) and Belkhamza & Wafa (2009) that a mayor difference between purchasing something over the Internet instead of in a physical marketplace is that the customer may have to interact with a vendor which they have never met before and buy product that they cannot touch or feel. In that case the consumers face a risk because the information given from the vendor may not be reliable and there could be uncertainties about the identity of the online trading parties and the product quality. In our survey consumers tend to rely on others opinions when choosing vendors to rely on. They chose not to interact with vendors that they have never heard of from others and which they believe are not trustfully, relying on their own computer skills and experience. 47 This is stated by Kim et al.(2008) that a perceived system reliability and reputation is a key when dealing with transactions on the web and people are afraid of the unfamiliar and then chose not to deal with vendors that they have never heard of. We believe that our survey respondents are afraid of the retailer opportunism risk meaning that the untruthfully vendor might intentionally misbehave when dealing with a consumer (Jarvenpaa & Rao, 2006). Most people believe that the risk was the same between the different business models but retail was one that stood out the most with the risk being lower. They believe the risk was lower because you had a physical market to return to if anything was wrong with the product. This is not too hard to understand because the thrust issues tend to get higher when people are dealing with vendors on the Internet according to Chen & Li, (2009) and Belkhamza & Wafa (2009). The player-to-player trading model was one of the business models that stood out because the consumers believed it had the highest risks and this was also one of the models that was least known of and practiced among the consumers. This might be because people are afraid of the unfamiliar as stated previous and because they believe that the thrust on this business model are lower because you are dealing with other consumers or players and not a vendor which they believe are more trustful then a player in the game. They are afraid of the retailer opportunism risk with the player-to-player trading model because they are afraid that the vendor, in this case the consumer might misbehave (Jarvenpaa & Rao, 2006). With all of the business models that deals with e-commerce privacy risks was also a main concern because they were afraid that their financial information might get stolen (Jarvenpaa & Rao, 2006). What we could see among the consumers was that most of them knew about all of the business-models for video games but not all of them had used all. This might be an angled answer because we might just have found the players that are the most interested in the subject because of the high rate of knowledge. It seems like the attitudes towards the business models were not dependent on the easeof use except for the digital distribution model which almost everyone stated was easy to use. This might be because almost all of our respondents felt that they had a high rate of computer skill. Palvia (2009) had also stated that perceived ease of use had an impact on perceived usefulness, usage and attitudes towards vendors websites. This might be an answer to why so many were so positive towards digital distribution, because the vendors that contributes to these business models today are easy to use. This is in line with Kim et als. (2008) who showed that perceived self-efficacy of online transactions had a negative influence on perceived risk and a positive influence on perceived trust. 48 6. Conclusion In this section a short and compressed answer will be given for our two research questions. The purpose of this study was to describe the most popular business models in the video game industry and classifying them with the help of a theoretical research model built upon e-commerce literature. We also wanted to study consumer’s awareness, experience and attitude towards these business models. Below you can find a compressed answer for both research questions. What kind of video game business models exists today and how can they be classified? Six major business models for video games has been found and classified. The classification has been done with the construction of a theoretical research model (displayed on page. 44) composed by theories and concepts from e-commerce literature. The six core video game business models found are: Retail Digital distribution Subscription Player to player trading Micro-transactions Advertising How aware and experienced are the consumers of the different video game business models available and what are their attitudes towards them? When looking at the consumer perspectives on these business models we found that the awareness of the six business models is high amongst people that are playing video games on a regular basis. However there is a small awareness gap between the three most known models (retail, digital distribution and subscription model) and the three least known (player to player trading, micro-transaction and advertisement model). The business models that most people have experienced are the retail and the digital distribution model. The two models that are the least used are the player to player trading model and the micro-transaction model. 49 The attitudes towards the different business models have been analyzed and factors such as risks, trust and ease-of-use have been taken into account. In general the video game consumers in the research were not very concerned but the possible risks when purchasing video games online as long as the vendor is well known. Many believed that the risk of use was the same for all business models but still some model stands out. These are the retail model that is considered safer and the player to player trading model that is considered less safe. The ease-of-use did not seem to be of much importance for video game consumers which could be due to the high rate of computer skill among them. Many consumers believed that the business model did not influence the game experience or the quality of the video game however some believed that advertisement financed video games were generally of lower quality. There were also criticism towards the micro-transaction and the player-to-player trading model, were consumers believed that video games from these models gave player with more money an unfair advantage. On the whole the two business model that people seem to prefer the most are once again the retail and the digital distribution model. 6.1 Future research One part of this study was a classification of the major business models for video games. With this classification in place we believe many interesting research topics can be considered. Our study took the perspective of the video game consumer. This perspective could be taken further with a larger pool of respondents and with a wider selection of people. Another idea would be to change perspective and instead focus on how video game developers use these business models, how the business models influence the development phase and how the models could be used in the future. In this study the piracy aspects were disregarded. A study that focused on different business models’ impact on piracy, today and in the future, would also be an interesting topic. 50 Appendix 1 – Transcript of all answers for the open questions Follow up question no. 6 Person 1: ”I don't want to have to pay on a regular basis.” Person 2: ”I just like it more when you get the game in your hands you know? Also i hate steam, goddamnit i hate steam...” Person 3: ”Buy most of my games through steam, very convenient way to buy and store games. ” Person 4: ”I want the Game in my hand with a original cover. If you buy a game throu downloading, what should you do if you lost the files ore the computer got broken. Then you loose the game. But burning it to a CD is a solution but who can claim that you bought it if some one ask. ” Person 5: Fall off Person 6. Fall off Person 7: ”When i buy a game i want it on a physical media, ie DVD or CD. I do not trust medias that require downloads or internet cons to be able to play them. Digital Distribution aka steam is a joke, they are far too expensive. The cost for digital distributed game should be atleast 30-40% cheaper then buying the same thing on a dvd or cd. As it is today it costs me more to buy a game online. ” Person 8: ”I like to buy games! Getting them in a hardcase with a manual is simply the best, simple as that! No real feeling in a buying a game and then downloading it.. ” Person 9: Fall off Person 10: ” Easy, always available, fast ” Person 11:”Like to have the box of the game at home. ” Person 12:”Easy to buy and No hassle whit disk and other things, Downside is no acess to game whitout internet ” Person 13:”I like to have a physical product, to have in my collection. And in Player to Player trading it feels like you have to play many hours to be able to earn something. ” Person 14:” Its easy when its digital, but i dont get nice box. The price has to be better than retail or close to retail price. I dont like the idea of micro-transactions. Its sucking money from players for a product they already bought. ” Person 15: Fall Off 51 Person 16:”You get the game in an isntant. And you dont have to wait in line with 5million other people wanting the same game ” Person 17:”I like to have the game on a CD/DVD. ” Person 18: ”1.The instant delivery and accessibility. 6. I hate games with the "most money irl wins" concept. Person 19: ”Digital Distribution is simply the most accessible, and often it minimizes the need for a publisher. Publishers SUCK. ” Person 20: Fall off Person 21:”Digital Distribution is easy to understand, the cost is clear, and the cost is lower than retail. Advertising-supported games annoy me; I have the money and would rather pay to not have to watch adverts. Those kinds of games are generally lower in quality too. ” Person 22: Fall off Person 23: ”Because you get a psysical copy of the game, you don't have to worry about passwords and such. ” Person 24:”Because you get a box ” Person 25:”Retail the favorite because the game permanently becomes mine (unlike subscription based) and there are no hindrances on gameplay (such as ads). Additionally, in past experience, the highest quality games are almost all retail. Least favorite is subscription because the fee is ongoing and because the required continuous relation to the company means that if they decide to stop taking subscriptions then I would lose the ability to play the game. ” Person 26: Fall off Person 27:”I like digital distribution because it's instant and easy to use. I've only used Steam, and it works exceptionally well. Although it has a price premium over physical retailers, I think the advantages easily outweigh the extra cost. Sometimes though there can be great value to be had, when Valve offers special or weekend deals, in which games can be as much as 75% (or more?) off. The least favorable shouldn't be too surprising. Not much to say about that really. I don't like commercials, and I don't like advertising, at least not when it's thrown in my face. If I want something, I'll find it myself. ” Person 28:”Digital Distribution is my first pick because it's convenient, usually cheaper and it's a single fee. Player to Player trading is my last pick because I don't think a games economy should be tied to real economy in such a way. ” Person 29:”1. If you have any problem with the game you can just ask the store for advice. And you are guaranteed to get the game. 2. Just like gambeling, you get stuck and dont know how much you've spent untill its to late. ” 52 Person 30:”1: DVD's and CD's are just annoying and I always seem to lose them. 6: It's usually annoying. ” Person 31:”I prefer Digital Distribution (Hereafter called "DD") since it's very easy to use and very accesible. The only con with DD is the current prices from the bigger and more trusted services such as Steam, Impulse and Direct2Drive. The DD market needs more competitiors and better terms from publishers so that the prices can drop. I almost never pay more than 20€ for a game bought via DD. The reason why I don't like P2P trading is simply because that games are just a virtual world and that should not get mixed up with reality. When I play games I play them to escape the reality and to hang out with friends or being part of a great story. Not so that I can make more money or spend more. ” Person 32: Fall off Person 33:”I like to have the box and everything when you buy the game, it creates a more "real" feeling about the whole thing. I don't like when you can buy things to make your gaming experience better for a game that is supposed to be free ” Person 34:”1. I prefer to download my games, but buying the legally (For example Steam), because I cant keep track of all my CD's, and sometimes they don't work. With DD you dont have the problem of CD's being broken or anything. 6. Tried it once, didn't like it at all. ” Person 35: Fall off Person 36:”Digital distribution is convenient. I prefer games where skill is highly regarded, instead of the amount of real life cash. ” Person 37:”No.1 - There is no easier way of buying a game. No commercials, fast "delivery" and best of all, you can not loose the DVD. No.6 - These games tend to be a bit to addictive for me. The whole idea for these games is that you will never finish, or reach any goal. But a more serious issue is that these games are really expenive if you play them for a couble of months compared to a normal "once buy game" and that is why I rated this gametype as no.6. ” Person 38:”Free games are nice, subscriptions are not. ” Person 39:”Number one allows browsing of other games, number six requres a monthly fee that may not go towards any game buying. ” Person 40:”Digital Distribution is easy and usually cheaper (unless you're buying mainstream games). Most indie games can only be purchased digitally, too. I haven't had much experience with Player to Player trading, but it usually turns out to be like Micro-Transactions, but with less value. ” Person 41:”I would never play if it wasnt for free” Person 42:”Digital distribution is the easiest to obtain, and gives the most money straight to the developer. Cons: Piracy++ ” 53 Person 43:”Digital Distro is my favourite because it's fast, easy and gives instant accsess to a product. Plus via steam I tend to pick up games I want for less than I would pay for them over the counter, since I can check sale prices more easily than at retail. Player to player is my least favourite because the products it features in I do not consider to be 'games' and I have never personally used it. ” Person 44:”Digital is good as its instant and hassle free. Retail is nice as you get a hard copy but it's usually expensive. Subscription is horrible, it doesn't feel like you "own" the game - it seems more like your paying the bills. ” Person 45:”Digital Distribution tends to be cheaper than retail games while providing the same product, and player to player trading does not necessarily guarantee the same standard of product for everyone. ” Person 46:” Only tried two so i cant choose. Person 47: Fall off Person 48: 1: ”Easy, cheap 2: Complicated, expensive ” Person 49:”Fast and simple. Often cheap. No continues paying. ” Person 50:”Retail if fine and digital is the future. However, i generally despise Subscriptions of all kinds, and Advertising and Micro-transactions kind of falls in to the same region. Something is being pushed on me. Haven't experienced Player to player. ” Person 51:”1. Enviromental friendly and open for upgrades. 6. Feels like a birthplace for scams and such. ” Person 52:”Digital Distribution is easy and it's a one-time purchase and that doesn't require any more payments to enjoy. Subscription is my least favorable pick since I don't like the thought of a game becoming a solid part of my monthly spending. I have never purchased a game that requires subscription. ” Person 53:”because a dvd or cd bought from a store is most simple deeling with for me. don´t like advertisment. ” Person 54:Fall off Person 55:”t's kind of like when music lovers prefer LP's before CD's and mp3's. It just has the right "feeling" to buy a physical game. But i guess digital distribution isn't really any worse, there for it's number two. Micro-transactions come third because i spend most time on them. Player to player tradings seem like gambling games such as online poker, and i have no interests in such games. ” Person 56:”1. I almost never play computer games but when the only times I do it, i play Farmville on fb. 6th I had never paid for playing computer games and especially not every month. ” 54 Person 57:”digital distribution is simple, new content & patches easily available, see Steam for a prime example. Subscription - I'm not interested in being tied up for X months on a certain game, incase I get bored of it. ” Person 58:”I have no interest in playing video games and therefore no experiences. I have heard of these models but never used them. ” Person 59:”I prefer to go a shop and see the actual game cover and the instruction book (nostalgic i guess). I do not like to have to pay a monthly fee (It feels like it is more expensive that way.). ” Person 60:”Advertisement, as long as kept minimal, can easily be ignored, and a free game is a good game. Player to Player trading (and in some situations Microtransactions) however, while free, simply aren't fun to non-paying players since the paying players will always win. This teases you into paying and you will probably end up paying a lot more than even a subscription game. ” Person 61: Fall off Person 62:”I prefer digital distribution because i believe that model represent the future of the gaming industry. it will allow small studios to distribute their games. ” Person 63: Fall off” Person 64:”i like it better with payment every month... ” Person 65: Fall off Person 66:”After ranking the models after what I use, I find that I have ranked them after price. Free games are free games. Subscription games can easily be the most expensive variant. ” Person 67:”Dont know why really.. sorry ” Person 68:”I like digital distribution because its convenent and there is a wide range of games to choose from. I dont like player to player trading because its seems expensive and not that fun to play. Those games are all about the money and not the game play. ” Person 69:Digital distribution, at least in Sweden, has a lot of advantages due to the high bandwidth available. This reduces the production cost of the product, since there's no retail boxes (including CD/DVD, paper, plastics, instruction manuals etc.) needed to be created. This is also a environmental thing, which makes it my top rated alternative. Player-to-player trading is generally not a good idea when it comes to real money, since (believe me or not) most people do try to scam you, or there's at least a high possibility that you'll eventually get scammed. Real cash should be exchanged between product creator and consumer, preferably. ” Person 70: Fall off Person 71:”Digital is quicker than Retail, as long as you can link the purchase to an account so you can re-download the product at a later time should you uninstall or 55 something similiar it is prefered to retail. Don't like commercial things whatsoever, so naturally ads in games are annoying ^^ ” Person 72:”I don't play video games that often and if I do, I play a particular game that I prefer to buy in a store. ” Person 73:”It's simple and easy to use digital distribution, I have used Steam and it worked fine. Avoid even a CD / DVD that I must have in your computer to play. By buying retail, I get a box too but I have no more fun for it. ” Person 74:”Avertising gives teh consumer a good idea of what is to be expected and player to player gives a more detail and intresting aspect of what to expect . ” Person 75:”D2D is easily accessible and affordable. I havn't played Player to Player trading, but I can imagine that it's hard to find good deals. ” Person 76:”The first beacuse it's the easyest way to play games online, I've never expiriented player to player trading thats what i put it as number 6. ” Person 77: fall off Person 78:”It's fast, and often cheaper than buying a retail copy. It's also more environmentally friendly, since there are no physical copies of the game, and therefor no physical distribution. ” Person 79: Fall off Person 80: Fall off Person 81:”Subscription is my number one since you can expect good support and lots of updates on the game. Advertising is my least prefered method for obvious reason, i don't want advertising coming up while playing. ” Person 82:”1st, Digital Dist because it's the easiest and most convienient 6th player to player trading because i think you should never trade real money for in game items and product that does not get you anything in real life. ” Person 83:”A physical copy is still what to go for. The prices on Digital Distribution have to drop before ppl start to buy them more frequent. However updates are an important part of games and software today. That being said retail aint just retail at the moment, it is often combined with digital updates etc. Still some software are never going to be digitally purchased only, like an OS. Advertising is a great way of making the game less expensive and I think we're going to see more of that. Subs, micros and p2p are somethings i don't really like. Subs are just way to expensive but still gives the player a greater experience. Still this could be done in like open source or in an collaborative sense, it will be less hype but less expensive. ” Person 84:”I want to play a game for free. If i like it and find it amusing, I'm much likely to spend some money for my own gain and support the developers. Im not to found of a monthly fee really... WoW brings in 2 figure million dollars each month, i 56 have a hard time accepting that to be the cost of running the servers and maintenance costs. ” Person 85:”No 1: I think that retailers are more trustworthy than the others. It is also easier to handle any trouble, make complaints etc. No 6: Never heard of it... ” Person 86: Fall off Person 87: Fall off Person 88:”Its always nicest to have a person to person relation when buying something expensive as a videogame. ” Person 89:”Easy to handle. Time inefficient ” Person 90:”Don't play so much and you probably need to put some time into the online based games to get something out of it. I also prefer buying something one time, rather than having to pay for it on regular basis ” Person 91:”Games feel more real if purchased (Retailed), and I get the feeling that you really really want to go home and just play. The feeling i dont get when downloading a game or purchased via digital distribution. Micro-Transactions feels like a ugly way to earn more money for the one making the games, rather then accually giving any content for the money. Could give people with money an "unfair?" advantage. ” Person 93: Fall off Person 94:”easy ” Person 95: Fall off Person 96: ”Since I collect old video games I put huge weight in having a complete edition, including box and manual. If possible I purchase the collectors edition. In Micro-Transactions the only way to get the full experience is to keep purchasing all new content. And as a gamer I of course want the full experience, hence I dislike that marketing strategy. ” Person 97:”Digital distribution meets demand in an instant, and usually requires minimal effort before playing can start. Player to player trading is my least favorable because I simply have no experience with it.” Person 98:”Convenience ” Person 99:”Retail: If I own something, I like to be able to touch it... Micro: I pay every "period" but have no proof that anything happens, and / or that my money is being used for the benefit of my "joy". ” Person 100:”Like to have something filling my bookcase, besides boring books :) ” Person 101:Fall off 57 Person 102:”Retail games can be reinstalled if needed. The same option is not always awailable with Digital Distribution. the constant expense of subscription places it last in the pack. ” Person 103:”1: I'm grown up with this type and it's the one I'm most comfortable playing. 4: It seems more addictive than the other types, shielding people from the real world! ” Person 104:”I prefer doing my purchase directly from the company. And I dont trade with people on forums, etc. ” Question 8 a) Person 1: ”Cheaper and impossible to find in regular stores.” Person 2: ”Its often alot simpler to get the games directly, i live in a forest and i havent got a city closer then 30 minutes by car. ” Person 3: ”Convenient, dont have to run to the store or anything.” Person 4: ”It's cheaper. ” Person 5: ”I buy on the internet when its cheaper then in the shops” Person 6: ”Convenience, delivery speed ” Person 7: ”I live in a small town with slim pickings in the localstores or that their prices are too high ” Person 8: ”Easier then buying from a local store” Person 9: ”accessibility ” Person 10: ”Cheaper, more convenient and easier. no stupid salesmen ” Person 11: ”Easy” Person 12: ”Easy and simple” Person 13: Fall off Person 14:”Easier and cheaper.” Person 15: ”It's quite easy, just pull out you little plastic-card and woila, you can download and play the game more or less instantly. Altough I like to have the box with manuals, etc. So I prefer retail versions. ” Person 16:”Because I want to ” Person 17:”Prices and comfort ” 58 Person 18: Fall off Person 19:”Accesibility.” Person 20:”It's cheaper during sales and I can play them almost instantly. ” Person 21:”Easier than going to a shop, and often much cheaper, and more instant ” Person 22: ”The easy access ” Person 23:”It's cheaper. ” Person 24:”Fast and Easy” Person 25:”Better prices, quicker, doesn't require getting to the store ” Person 26:”Cheaper and more to choose from. ” Person 27:”Ease of use, usually much lower prices, much greater number of products available. Also, at least here in Sweden, some of the e-tailers have customer service and support that is far superior to physical retailers. ” Person 28:”It's convenient. ” Person 29:”Often cheeper than in stores, and that its very simple ” Person 30:”It's faster and usually cheaper.” Person 31:”That it's easy and fast to use. I don't have to travel to a shop (my closest game-shop is 40 minutes away via bus and train) or wait for products to arrive by mail. ” Person 32:”Easy and is often cheaper then by buying on a mall ” Person 33:”It's easy, quick and often alot cheaper than to buy it in a store. ” Person 34:”Because you don't have the CD's, you cant loose the CD or the CD cant be broken, which is often a problem. ” Person 35:”Easy ” Person 36:”Convenient ” Person 37:”It´s cheap. Easy to search for the lowest price online... ” Person 38:”It's cheaper and I don't need to spend time running around in stores ” Person 39:”None ” Person 40:”Convenience, and many are only available over the internet. ” 59 Person 41:”convieniet, direct buys with direct recieves easy to see and no cuing lines” Person 42:”Ease to obtain ” Person 43:”Ease of access ” Person 44:”Usually cheaper than going to the shops ” Person 45:”The tend to be cheaper than when bought from a shop ” Person 46:” cheap, direct access, homedelivery.” Person 47: Fall off Person 48:”Easy ” Person 49:” Easy and huge selection” Person 50:”Keywords; easy, fast, efficient. ” Person 51:”Supply, price ” Person 52:”It's comfortable and quick ” Person 53:”because i can not find it in the stores or its cheaper. ” Person 54:”Flights and music ” Person 55:”that it brings me a lot of joy ” Person 56:”Is there a better exchange of clothes and furnishings on the web. ” Person 57:”easy to do research on product ” Person 58:”It is easy and I can do it from every ware and when ever I like. ” Person 59:”its fast and you have a broad variety ” Person 60:”I'm lazy and slightly antisocial. If I don't have to go to the store, I prefer not to. In the case of digital solutions, I prefer it because it's good for the environment as well, no need to ship games to shops. ” Person 61:”cheaper, more convinent” Person 62:”Cheaper and easier to find just what I want ” Person 63:”Easy ” Person 64:”I will need to "want" it ” 60 Person 65: ”Accessibility, It is easy to find a product that appeals to you. ” Person 66:”no physical medium, price, the service being available at odd hours ” Person 67:”Prefer to buy in the store. ” Person 68:”It is convenient and there are many products to choose from. ” Person 69:”Creativity, innovation and new things tend to spread faster and easily over the Internet, which makes it a great source for new technology, innovative gameplay/usage etc. ” Person 70:”I'ts convenient ” Person 71:”It's comfortable, you can do it from home so to say, i buy most of my retail copies from the web as well, ” Person 72:”Avaliability ” Person 73:”Price” Person 74:”Cheap price, get the products faster. ” Person 75:”The security of the transaction. ” Person 76:”It´'s easy, cheap and other stuff than what i can find in stores nearby ” Person 77:”Easy ” Person 78:”Mostly to gain online access (for games). ” Person 79: ”It's convenient ” Person 80:”It's cheaper and you save time when you don't need to go the store to buy the product. ” Person 81:”more products and cheaper. ” Person 82:”Easy fast access ” Person 83:”Easy, instant access/delivery, sometimes cheaper ” Person 84:”Fun, easy, comfortable, cheap. ” Person 85:”That it's cheaper than buying at retaliers. ” Person 86:”Easy access and I cant find it in a store ” Person 87: ”I'm lazy ” 61 Person 88:”Saving time ” Person 89:”Smooth delivery ” Person 90:”It is simple and cheap. ” Person 91:”My lifestyle say that i need them ” Person 93: Fall off Person 94:”easy, easy, easy, sometimes cheap, fun with not just bills in the mailbox! ” Person 95: ”Cheap, simple and bigger selection of products” Person 96: ”It's easy and accessable. ” Person 97:”Simplicity, minimal effort. ” Person 98:”Presents, games, stocks ” Person 99:”Why do I shop? I really don't know, but it's easy and I can reach the world. ” Person 100:”It's easy and done fast. ” Person 101:”It is quite easy to acquire the products after purchase and often more cheap then in retail stores. ” Person 102:”Convenience ” Person 103:”Convenience ” Person 104:”its easy and fast. ” Question 8 b) Person 1: ”Computer partes, electronics” Person 2: ”I bougth a computer recently, otherwise games. Microtransactions are a clever way to steal your money with you not knowing how much you are spending. ” Person 3: ”Games ” Person 4: ”Computer hardware, other thigs to computers, books, movie tickets ” Person 5: ”Everything except food and such” Person 6: ”Anything” 62 Person 7: ”Games, movies, books, food, outdoor equipment ” Person 8:”Almost everything. ” Person 9: ”Electronic hardware/software ” Person 10:” computer hardware and games ” Person 11: Fall off Person 12:”Games mostly” Person 13:”clothing, games, books etc.” Person 14: ”Hardware and games. Sometimes clothes.” Person 15:”I buy Spotify Premium membership, World of Warcraft playtime, and sometimes games thru the Steam-portal. ” Person 16:”Games,clothes ” Person 17:”Most products I need ” Person 18:”Games, hardware ” Person 19:”Mostly I buy games, but also order books.” Person 20:” Games.” Person 21:” Games, software licenses ” Person 22:”Mostly litterature, also games, music and movies ” Person 23:”Games, music, movies. ” Person 24:” Games, music, movies - other stuff like computer parts ” Person 25:” computer hardware and software, books, music, music equipment, foods, clothing” Person 26:”Mostly computer parts. ” Person 27:”PC games, PC hardware, tickets. ” Person 28:” Games, computer hardware, clothes. Most things I buy I buy on the internet. ” Person 29:”Games, hardware to computer. ” Person 30:”Mostly computer stuff like hardware and games. ” 63 Person 31:”Games, music, computer hardware and other technical products such as MP3-players or cellphones. ” Person 32:”games,movies and music ” Person 33:”pretty much everything. Everything from games to hardware and clothes ” Person 34:”Games and apps for my ipod. ” Person 35:”Games, Computer stuff ” Person 36:”Anything that doesn't exist locally and games ” Person 37:”Computer gadgets (hardware, mouse/keyboard, bluetooth and such like), student litterature, Airplane/bus/train tickets, vaacum cleaner bags... well pretty much anything exept food and clothes.” Person 38:”Books, shoes, computer hardware” Person 39:”Computer compoents, non gaming material ” Person 40:”Usually games through digital distribution. ” Person 41:” flowers, travel ticets, concert ticets, membership payments” Person 42:”Games, but not in-game items ” Person 43:”Games from Steam, Occasionally MMO subscriptions ” Person 44:”Electronic goods usually. ” Person 45:”Games and computer hardware ” Person 46:”ticets, books, games” Person 47: Fall off Person 48: Fall off Person 49:”clothes, ticets, games. Person 50:”DVDs, clothes, games, bus-tickets, you name it. ” Person 51:”Books ” Person 52:”Games and technology hardware such as computers, headphones and so on. I also purchase clothes and tickets (traveling, concerts). ” Person 53:”cd s ” 64 Person 54:”Flights and music ” Person 55:”clothes mostly, sometimes music and movies as well ” Person 56:” Mostly Clothes” Person 57:”physical products, eg clothes etc ” Person 58:”Tickets, stocks and bank via internet. ” Person 59:”tickets (plane, train, concert) music (digital) gifts ” Person 60:”Games, subscriptions (to games or sites like megaupload), books. ” Person 61:”games, clothes, books, makeup” Person 62:”Books, DVD:s and video games ” Person 63:”Clothes” Person 64:”clothes/games/computer components ” Person 65:”Bank services, travel, music, games ” Person 66:”Apart from online multiplayer and cheap offline single player PC games, I buy traveling tickets, clothes, PC hardware... and Kiva.org credits. ” Person 67:”retail games. ” Person 68:”Clothes, games, computers ” Person 69:”Mainly web-related, magazines (mainly PDF) ” Person 70:”books and train tickets ” Person 71:”Game subscriptions, Games (digital and retail), Some hardware. ” Person 72:”Spotify account ” Person 73:”Electronics items. ipod, headphones, tang tord. Reading ” Person 74:”fun gadgets, video games. ” Person 75:”Music, movies, games ” Person 76:”Clothes, shoes, stuff to decorate my home, airplanetickets, hotell/hostel ” Person 77:”Aplications for my iphone ” Person 78:”Just about anything. Games, tickets to events, cat food. ” 65 Person 79:”clothes” Person 80:”Music, Products from Apple, gadgets for e.g computers or television ” Person 81:”protein ” Person 82:”Anything the internet provides (with the exception of food) ” Person 83:”games, anti virus ” Person 84:”Whatever I find interesting. ” Person 85:”Books, tickets, shirts ” Person 86:”Clothes, gifts and accessories ” Person 87: ”Music, clothes, and computer games ” Person 88:”Clothes, random everyday stuff like toothbrush etc, books ” Person 89:”iPhone apps, music, surveys, videos ” Person 90:”I purchase a wide variety of products and services on the internet. ” Person 91:”Games, hardware, alot of diffrent stuff. ” Person 93: Fall off Person 94:”everything. clothes, toys, magazines electronics... ” Person 95: ”car parts, tools” Person 96: ”Everything, used, new, online, indie. ” Person 97:”Clothes, cell phone credits, electronical items, books.” Person 98:”no, since my creditcards are insured against fraud ” Person 99:”Movies, games ” Person 100:”Games, Movies, Spotify music, tradera objects. ” Person 101:”Spotify Premium, DLC for PS3 games etc. etc. ” Person 102:”Electronics, books ” Person 103:”Books, clothes, gifts, tickets etc ” Person 104:”clothing ” 66 Question 8 c) Person 1: ”No, you can only get hacked by beeing dumb or inexperinced” Person 2: ”If its a popular one then im pretty safe i think. Id never buy some shoddy neverbeforeheard off game wich noone plays. ” Person 3: ”Not really, I buy my games from secure sources.” Person 4:”No, I use only well recognised dealers and stoores. ” Person 5: ”Yes cause i do not trust people, especially not on the internet since its easier to get away with frauds etc then in the "real" world ” Person 6: ”No ” Person 7: ”I would never buy it from the developer or any other foriegn company, i only shop from well trusted companys within sweden. ” Person 8: ”No because I dont throw away personal information very easily, sometimes I use false names, etc, if I NEED to sign up and I only like to try something.” Person 9: ”no, only use trusted sites ” Person 10:”No, i use common sense, if it's too good to be true, it probably is. Never buy from small or new internet stores ” Person 11: ”No, usually it is big companies that delivers these games and services. ” Person 12: ”No, not really, as i have good computer knowledge know its quite safe ” Person 13: ”Not much, mainly because i look them up and see if they are trustworthy” Person 14:”Not at all. ” Person 15: ”I don't think about it that way. I trust the company (for me, it's mainly Blizzard and Vavle/Steam) so I'm really confident with my purchases online. Will something happen, I will just contact my credit card supplier. Nothing to worry about. ” Person 16:”Nope, because I buy from well know sites ” Person 17:”No. I only shop on websites I trust ” Person 18: Fall off Person 19:”A little bit, I'm always wary of using my credit card atleast. I wish there were more methods of payment which are not only easy to use, but also safe for me as the buyer. ” Person 20:”No, I trust the major retailers. ” 67 Person 21:”No, because I'm both experienced and arrogant enough to think I can avoid it ” Person 22: ”To a small degree, yes. One can never be sure. ” Person 23:”No ” Person 24:” No, I buy stuff from well-known companies ” Person 25: ”Yes because it is a real possibility. I avoid this by only buying from a small group of sources which I trust. ” Person 26:”Of course, i dont want to throw my money away. ” Person 27:”There's always a risk, but if I know it's from a well known brand/publisher/developer/e-tailer I consider myself quite safe. ” Person 28:” No, it's not very likely to happen when you are aware of the risks. ” Person 29:”I only use trustworthy sites, were I can read comments and rewievs from others. Answer: No. ” Person 30”:No, since I always check the site before I purchase things because there are so many scam sites. ” Person 31:”Yes I am. That's why I always by from companies that I trust such as Steam for games and Inet.se for computer-hardware and other stores that have a great reputation, a good reputation isn't good enough if I'm buying a product for more than 15€. ” Person 32:”i dont shop from sites that im not sure is real and is not scamming me” Person 33:”I am not, because I always buy from sites that is trustworthy. ” Person 34:”No, because the only thing I use for that is Steam, and I do trust them.” Person 35:”No, I'm using steam ” Person 36:”No, I am aware of risks and take necessary precautions ” Person 37:”No. If something happens, my bank will step in and cover for the fraud. ” Person 38:”Yes I am concerned. I am a computer professional and I am aware of the risks. ” Person 39:”Somewhat, Nothing much can be done if it happens.” Person 40:”Not really, common sense blocks most issues. ” 68 Person 41: Fall off Person 42:”No, because I buy from reputable sources. Also, Paypal insures transactions. ” Person 43:”I am concerned, as proof of ownership becomes a muddier issue making fraud more possible ” Person 44:”Sort of. I usually stick to the popular or "trusted" sites when I'm dealing with money. ” Person 45:”No, because I buy from well known stores and investigate lesser known ones before buying from them ” Person 46:” If I use a new supplier i think about it but most times comfort goes before causion.” Person 47: Fall off Person 48:”No, never had any trouble ” Person 49:”Yes, you allways have to have it in mind. I usually only shop from wellknown companys. Person 50:”Not really. I believe i have a pretty good idea of whom i can trust. ” Person 51:”Yes, why not? ” Person 52:”Yes, I have been the target of online fraud and I am very wary of my online security. ” Person 53:”yes, cuz im the worried kind ” Person 54:”Not much ” Person 55:”i most definitely am, the internet is full of thieves and scum ” Person 56:” I never buy or purchase on the web” Person 57:”yes, I don't want spam in my inbox ” Person 58:”No. Because I never use it. ” Person 59:”no, i feel pretty safe. it have never happend so far so i guess thats why i think im safe. ” Person 60:”No, I only buy on sites I trust. If it's even slightly suspicious, I use Paypal. ” Person 61:”I never think about risks, why i dont know” 69 Person 62:”No, since I plat games that I consider to be trustworthy ” Person 63:”No ” Person 64:”no, insurrance! ” Person 65:”Yes, I make sure that the company is selling it is trustworthy before purchasing any products from them. ” Person 66:”I am concerned about my massive amounts of peronsal information being stored in one place, concidering legislation such as the patriot act in the United States. I am concerned about my account(s) being hijacked as this happens from time to time to people in my social network. I am not noticably concerned about online credit card fraud and I have at times used my credit card credentials on less than popular sites. ” Person 67:”Sure, that's why i only buy things from stores i know i safe. ” Person 68:”Not that concerned I may be a little concerned about late delivery and te ability to return to product. ” Person 69:”I am, if the company does not display a clear, concise method of distributing/informing ” Person 70:”I dont know” Person 71:”Not from the places i regularily buy from, however it is obvious that there is a lot of sites trying to scam people, usually these are easily detected and therefore avoided. ” Person 72:”I don't play video games online ” Person 73:”Is always watchful, but steam is a familiar brand that I believe have had problems. ” Person 74:”Yes I am, because you can not be a hundred percent sure that you will get what is expected intill you have it in your hands. ” Person 75:”It depends, if it's a trusted/well known company I don't have a problem with it. If it's less known I might be more careful. ” Person 76:”No. Probobly beacuse im naiv ” Person 77:”No, dont think its so bad ” Person 78:”Not really, I rarely buy something from unknown sources. And I take precautions when giving away my personal information. ” Person 79: Fall off Person 80:”No ” 70 Person 81:”No, i don't buy stuff from sites i never heard of. ” Person 82:”No, its secure enough, and if something does happen its a small risk to pay, and im ensured to get my cash back. ” Person 83:”Not really, its pretty easy to get a feeling whether its a serious company or not. If not, steam or something is a good insurance that the product is valid. ” Person 84:”Depends, I usually check around with people online about the company and their service. ” Person 85:”No. I use a "false" credit card number when buying online. ” Person 86:”No, I make sure it's trustworthy sources ” Person 87: ”Depends, i only buy from well known sites ” Person 88:”No concern. Theres always a risk even though you walk around with cash? ” Person 89: Fall off Person 90:”The only thing that I am concerned about is the seriousness of the site. Therefor I only buy from sites that I know of since earlier. ” Person 91:”Im aware but not concerned, i try to deal with stores/ places/people i know, and via ebay i often use money transfers like paypal to give some extra protection. ” Person 93: Fall off Person 94:”nope ” Person 95: Fall off Person 96: ”Not at all when purchasing from "trustworthy" dealers. ” Person 97:”Not very, because I feel knowledgeable enough to discern trustworthy websites from fradulent ones. Reputation and forum discussions help in this identification. ” Person 98:”no, since my creditcards are insured against fraud ” Person 99:”No, I use all the secuirity that my bank advice me to. ” Person 100:”No, only use trusted sites etc. ” Person 101:”There's allways a risk when handle money on the internet but if precautions are made I think it's ok. ” Person 102:”No. Only by from vendors that offer payment by invoice ” 71 Person 103:”No, not if from a trustworthy well-known homepage ” Person 104:”no ” Question 8 d) Person 1: ”None of them are risky. ” Person 2: ”Risc is higher for all online purchases if you buy it retail youll always have the CD ” Person 3: Fall off Person 4: ”Yes, some one can copy your card then you purcases a book in a book-store. ” Person 5: Fall off Person 6: ”A detailed explanation would take too much space and time ” Person 7: ”I think the risk for something going wrong is greater with micropayments games. ” Person 8: Fall off Person 9: Fall off Person 10:”I think the biggest risk is not getting proper warranty. The risk is the same everywere ” Person 11: Fall off Person 12:”yes the risks are about the same ” Person 13: ”No. Digital Distribution i think is less secure.” Person 14:” Buying from auction sites is less secure imo. ” Person 15: ”I don't think any service is less secure, it's just how you use it. You maybe should be a little bit carefull if you have trojans, etc, on your computer. So get a antivirus system and you should be safe. ” Person 16:”Yes I do ” Person 17:”Nope ” Person 18:”The business model where you need to use your credit card has a higher risk ” 72 Person 19: ”All of the business models feel pretty risky when your credit card is concerned, with the internet based ones being the worst. ” Person 20:”Player to player-trading, because it can vary so much. ” Person 21:” I'd imagine those methods that involve a one-off transaction are more secure since details don't need to be stored for longer than it takes for the transaction to be completed. So, retail and digital distribution are safer, then micro-transactions and player trading which involve several one-off transactions, then subscription which often involves automatic billing. Advertising is totally safe. ” Person 22: Fall off Person 23:”Digital distribution feels less safe because sometimes the technology isn't working as it should. ” Person 24:”Pay before you get the stuff you buy. ” Person 25:”The online based systems are less secure because the payment system has the potential to be exposed. ” Person 26:”Player to player trading ” Person 27:”No, obviously there's extremely little risk involved in buying a game for physical cash in a retail store. As for the others, it depends much on the perceivable trustworthiness of the developer and/or publisher behind it. Known and respectable such is, among others, Valve, Blizzard, Bioware, Infinity Ward etc. ” Person 28:”Player to player trading is most likely the riskful because it's not as controlled by the game company. ” Person 29:” No. Buy online from an unknown site, not good. Maybe you don't even get what you've bought. And the support is dead when you try to contact them. ” Person 30:”No. Digital distribution is a lot less secure since you don't get a physical game and you can't go back to the store as you can do if you buy retail. ” Person 31:”I believe that P2P trading is least secure since it's easier to get away with scamming in a game since you don't know the person you're trading with and since it's a new phenomenon it's hard to get help from police or court. ” Person 32:”i dont know” Person 33:”The safest is buying things from a "real" store or a big internet site because it is very unlikely that they will try to scam or anything else like that. ” Person 34: Fall off Person 35: Fall off 73 Person 36:”They're about the same. But digital distrubution ought to have the most frauds.” Person 37:”The advertising model is a bit more risky i think. Selling user information is probably more likley here. ” Person 38:”In Player to Player trading games it is possible to loose large sums. I know that has happened in Project Entropia. ” Person 39:”yes ” Person 40:”No, with digital distribution security could be an issue. If you buy a retail game, you often pay with cash, which is more secure and safer. ” Person 41: It depends on the product, is it a physical product or a ticket that i must have so no but is there anything that i would want to try before buying its yes. Person 42:”Micro-transactions seem rather shady because you have to give them a credit card that they can charge whenever they want. ” Person 43: Fall off Person 44: Fall off Person 45:”Player to player seems to be the least secure, as the products you buy are not always vetted by the game operators ” Person 46:”Dont know” Person 47: Fall off Person 48:”Don't know ” Person 49: I guess Microtransactions and digital dist because you have to do a payment through the internet. Person 50:”Well, some might be abused and drawing on the consumers being pushed into buying more and more products. In that case retail is the safest. ” Person 51: Fall off Person 52:”I would say that the player to player trading model involves the highest amount of risk since it's not controlled by a single company or entity that governs the transactions. ” Person 53:”no, the unheard off i thing is less safe ” Person 54: Fall off Person 55:”digital distribution must be the least secure since it's easier to fool people over the internet ” 74 Person 56:” I dont know” Person 57:”player to player - it's like buying on eBay, can I trust the seller with my info? ” Person 58:”If I am going to pay anything online, it have to bee threw my internet bank. I don't leave my credit card number, or the possibility to bee charge threw my cell phone. ” Person 59:”no, micro and play-player seems less safe (more people involved less control) ” Person 60:”As long as the game company is trustworthy, I see no problem with any of the business models. So yes, I perceive them to be equally secure. ” Person 61:” Yes” Person 62:”Player to player trading and ingame trading over all seem less secure. people will try to take advantage of one another. ” Person 63: Fall off Person 64:”dont like to but my visa nr in sites that is from unknown sites, ” Person 65:”No ” Person 66:”I think advertisement based games and cash payment in a store provides vastly higher degree of anonymity and nulls the risk of credit card fraud. ” Person 67:”All of them you have to spend money to continue playing, never know it is works, and you might loose your money.. ” Person 68:”I consider them to be the same. Maybe a little more risk with player to player trading because I have never tested it and it seems wierd. ” Person 70:”I dont know” Person 71:”out of the mentioned ones in this survey id have to say the advertising model, for the reason that many of the ads are misleading in most of the cases ” Person 72:”Subsribtion because if they don't get enough subscribers they might shut down the video game site and then you can't play any more and you will probably loose all your "points" that you have earned so far ” Person 73:”Player to player, I believe its least safe when the possibility of being cheated is greater. But if it can be done safely, I would have no problem with it. ” Person 74:”yes I do ” 75 Person 75:”I beliece that companies using the advertising business model might be more open to giving out account information such as e-mail. ” Person 76:”Micro-Transactions model. Its often on pages that i dont know that much about ” Person 77:”Dont know ” Person 78:”Microtransactions are probably the riskiest, as they demand that you use your credit card information frequently (at least if you buy stuff). ” Person 79: Fall off Person 80: Fall off Person 81:”Micro-Transactions model, facebook games sucks :D ” Person 82:”Player to player is the most risk in my oppinion and the less risk is retail. ” Person 83:”Retail is always the best, because you get the physical product in your hand. And you got a physical store to return to if something is wrong. ” Person 84:”I have yet to find a developer that gives a shit about the people that feeds em. ” Person 85:”It feels safer to buy any item at a retailer than online... ” Person 86:”Don't know ” Person 87: ”no idea... ” Person 88:”Fall off ” Person 89:”No comment ” Person 90:”I do not believe that there is a significant difference between the different alternatives. ” Person 91:”Retail could be the most secure. But then again, they can copy your credit card and you get ripped of without knowing it...but it feels more safe. ” Person 93: Fall off Person 94:” I´m quite naive. subscription feels for some reason safe ” Person 95: Fall off Person 96: ”They are all directly related to the "dealer" ” 76 Person 97:”There is always some risk whenever personal information and credit card details are used online, so any business model containing such features will (initially) seem somewhat risky. Risk increases manyfold when you are trading/buying/selling with other players as opposed to the company itself. ” Person 98:”same ” Person 99:”Micro payments and negative options, can get out of hand pretty quick if you not carefull. ” Person 100:”Player to player trading. ” Person 101: Fall off Person 102:”i dont perceive any of the business models i use as unsecure ” Person 103:”Am not familiar with all models. Player to player involves a current flow of money and seems less secure ” Person 104:”no ” Question 8 e) Person 1: ”Player to player and micro-transaction can make the the game a "free to play, pay to own/rule" game.” Person 2: ”Microtransactions i think. The game is free in itself but you have to buy stuff with real money to be any good in it, bad system. Advertising is alot better for that. ” Person 3: ”Micro-transactions, I would like the content to be available to me from the start and not have to buy micro expansions every week/month to enjoy it. ” Person 4: ”Advertising. The player don't pay for playing. The result is that the players can't put som suggetions to the game. ” Person 5: Fall off Person 6: ”A detailed explanation would take too much space and time ” Person 7: ”Digital Distribution and micro transactions payed games” Person 8: Fall off Person 9: Fall off Person 10:”advertising in games. ads destroy the feeling of the games ” Person 11: Fall off 77 Person 12:”Micro-transactions, i dont want tp pay all the time when i play, better to have a monthly fee instead ” Person 13:”Maybe Micro-Transaction games because the games i played are not that good. ” Person 14:”No, i dont know. Person 15: ”Don't think there is any, it's all about what you like to play. ” Person 16:”If you over hype the game, by over advertise it ” Person 17:”Since I've only test the "mainly" business models, I have too choose Advertising-games ” Person 18:”Micro-transactions” Person 19:”Advertising can get annoying if it isn't handled well in the game of course.” Person 20:”Micro-transactions.” Person 21: ”It's not the business model, it's the games they attract. Generally advertising-supported games are of low quality, since people would only play them if they were free. ” Person 22: Fall off Person 23:” Micro-Transactions, Advertising. ” Person 24:”Dont know” Person 25:”Advertising based games are often either lower quality due to a lower budget or less fun because of the interruption of adertisements ” Person 26: Fall off Person 27:”Obviously games funded by advertising or micro transactions will be at a disadvantage compared to full priced games. I don't know enough about player to player trading games to comment on that. As for the others, I think their business models support types of games that are not meant for the same audience as "regular" games. Although micro transactions is up and coming, I think it won't be a major deal for at least a few years. As for advertising in games - there will always be product placement, but I don't think people will want to play games stuffed full with advertising. The very idéa seems like evidence that the people behind it does not give a shit about what games are really all about. ” Person 28:”Micro-transactions, you feel you HAVE to buy all the stuff that is avaliable to enjoy the game fully. ” Person29: Fall off 78 Person 30:”No ” Person 31:”i believe that games that use micro-transactions and advertising are usually of lower quality. I'm guessing it's because they don't have the same budget as bigger competitors such as WoW and because it has most been used in asia where repetitive games is more accepted than in west. It's also harder for those games to nisch themselfs a make a more original product since they're depending on many users and therefore have to make games suited for a big audience. ” Person 32:”i dont know” Person 33:”The games that are low-quality is the ones that are free. It's worse because they don't have the money to spend on developing their games as much as the ones that's charging a monthly fee. ” Person 34: ”Micro transactions ones, i dont really see the point of those games. I doesn't seem they have a goal or story. ” Person 35: Fall off Person 36:”Micro-transaction and player to player trading. Because you have to sink money into them to compete with others ” Person 37:”Maybe advertisement, but probably not. No, i don´t think there is any difference here. ” Person 38:”Never heard of a Advertising model game that is popular... ” Person 39:”yes, digital dstribution. Allows developers to expliot players buy not delivering thw whole game or take out bits of coding that should have been included with the physical media ” Person 40:”Any business model can lead to a good or bad game - some are probably (statistically) more likely to be worse, but for the most part there is equal opportunity available. ” Person 41: Fall off Person 42:”Micro-transactions for in-game items tend to unbalance gameplay in favor of people with more disposable income. ” Person 43:”Advertising models have yet to be deployed in such a way for free games that it doesn't feel intrusive on the experience. ” Person 44:”Subscription based, micro transaction games are usually less enjoyable due to their desire to always grab money from you. ” Person 45:”Micro-transactions can detract from the fun of a game, as most actions will charge you extra. Also, in-game advertising can detract from the experience of the game 79 by breaking immersion when products being advertised do not relate to the game world. ” Person 46:”Dont know” Person 47: Fall off Person 48: Fall off Person 49”Advertising games. But im sure you can also make them good.” Person 50:”Well, advertisements are generally boring and worthless. Therefore I would say that it lowers the quality of the game. ” Person 51: Fall off Person 52:”Probably the micro-transaction model, since this model requires you to constantly buy things to "keep up" with your friends and gaining the same advantages as them. ” Person 53:”No” Person 54: Fall off Person 55:”only if you have a bad connection ” Person 56:” I dont know” Person 57: Fall off Person 58:”I don´t know. ” Person 59:”no, micro and play-player seems less safe (more people involved less control) ” Person 60:”All of the free solutions will lead to worse games, but since those games are free, one is less inclined to care. If I'm playing a free game like an advertisement based one, I wouldn't expect a game as good as retail, digital distributed and especially a subscription based one. ” Person 61:” No” Person 62:”No” Person 63: Fall off Person 64: Fall off Person 65:”Games that are financed by advertising. If youre playing a roleplaying game and see ads for diapers it would feel a bit out of context. ” 80 Person 66:”The first that comes to mind is the advertisement model. Ads by their very nature must steal our attention and that saboteurs the experience. ” Person 67:”i dont know ” Person 68:”I believe advertisment games and micro payment games generelly are less fun to play. ” Person 70:”I dont know” Person 71:”player to player micro transaction and advert models are out of my own experience less fun to play, for various reasons, the first two due to the fact that your "real-life" economy determines how you experience the game, usually to such a degree where it is impossible to compete with someone spending alot of money. wich in its own ruins it for me. Advertising on the other hand is just annoying and in the way ” Person 72:”The one from advertising becase the advertiser might have to much control ” Person 73:”Advertising in games would reduce the experience unless it was a nice way. ” Person 74:”No I dont. ” Person 75:”Player to player trading, because the outcome might be that the developers of the game/program doesn't recieve enough money for further development. ” Person 76:”Lower quality: Advertising model. I think its beacuse its people how sits at home and make these games. ” Person 77:”Trading, dont want to spend money in the game to get fame ” Person 78:”Microtransactions can result in some players getting an unfair advantage over other players if not managed correctly. For instance, some games allow the players to buy better weapons, which results in players that are not buying these weapons being frustrated and quit playing. ” Person 79: Fall off Person 80:”No ” Person 81:”Advertising model, same reason as question 6 ” Person 82:”Player to player since its easy to scam players, and you dont have the same moral and you cant hold players to laws and standards you can hold retailers ” Person 83:”Thats really just about what you are intrested in, doesnt really have to do with the business model. ” Person 84: Fall off 81 Person 85: Fall off Person 86:”Don't know ” Person 87: ”Fall off ” Person 88:”Fall off ” Person 89:”No comment ” Person 90:”I never play online and since most games except for retail games tend to be online based, I prefer retail games. ” Person 91:”Micro-Trans. Since it gives player with money an advantange, rather then making the players experience/skill be the judge of that. ” Person 93: Fall off Person 94:” don´t know ” Person 95: Fall off Person 96: ”Not giving everyone the same experience!!! ”'' Person 97:”Generally, games that do not require you to pay will not be as good as games that do just that. Without the resources to further improve the game, enjoyment will quickly fade. Charging for providing the game gives the company incentives to keep improving the game, and perhaps increases the acknowledgement and use of user feedback. Subscription games may have an advantage here, since they have good reasons for wanting their subscribers to keep playing. ” Person 98:”monthly payments, why pay more for a game than its worth? ” Person 99:”Micro and Advertising: I pay every "period" but have no proof that anything happens, and / or that my money is being used for the benefit of my "joy". And advertising is to sensitive to the market, bad economy, low income on advertising = low quality game. ” Person 100:”Advertising model. I really hate commercials and that. ” Person 101: Fall off Person 102:”none ” Person 103:”No, different people like to play different types of games. Of course advertisig games usually only offer a trial version which of course has a lower quality and becomes less fun once you become good at it ” Person 104:”no ” 82 Appendix 2 –Categorization of all the answers for the open questions Below are tables showing answers grouped into categories for the open questions. The numbers next to every category are the number of comments that fitted into that category of answer. Hence one comment can result in one or more categories for every question. Question 6: Which one of these business models do you prefer the most? (Explain with your own words why your number one pick is your most favorable and your last pick is you’re least favorable). Digital Distribution Why most favorable? Easy and fast 24 Don’t like hard copies Cheap Accessibility Environmental friendly Wide variety of products Money goes to developer Easier to update The future of gaming industry 7 5 4 3 3 1 1 1 Retail Why most favorable? Likes hard copies/box/manuals Person to person contact is important More trustworthy Don’t need login/password High quality games A feeling of ownership of the game Good support Likes to browse in shops Advertising Why most favorable? A free games is a good game Easiest to play online Why least favorable? Waiting in line to purchase game 1 Why least favorable? 20 2 2 1 1 1 1 1 3 1 Subscription Why most favorable? Fast and simple 2 Good support and lots of updates for the game 1 Why least favorable? Annoying with adds Why least favorable? Don’t like to pay on regular basis 4 9 4 Expensive Addictive 1 83 Micro-transactions Why most favorable? Money goes to developer Player to player trading Why most favorable? 2 Why least favorable? Want to know that the money spent go to the benefit of the players Just don’t like it for any particular reason Gives players with more money an unfair advantage in the game Don’t know about it and that’s why they don’t trust it Expensive and not fun Easier to scam Why least favorable? Gives people with more money an unfair advantage in the game Are reluctant to buy virtual artifacts for real money. Tried it didn’t like it Addictive You need to play allot to be able to have fun and earn something Includes no real game elements Game economy should not be tied to real economy Games should be an escape from reality not a simulation of reality Don’t know about it and that’s why they don’t trust it Easier to be scammed 3 3 2 2 2 1 3 3 2 1 1 1 1 1 1 1 84 Question 8A: What are your main reasons for purchasing products and/or services on the Internet? Easy and fast Cheaper Wide and sometimes unique variety of products Availability (Comfortable and always open) Smooth delivery Social reasons (feels good to shop online, part of lifestyle) Easy to find products and compare prices Online customer service better than what many physical retailers have to offer Good way to avoid sales persons Environmental friendly 52 36 21 18 4 2 1 1 1 1 Question 8B: When you purchase on the Internet what types of products/services do you buy? Games /add-ons for games Electronics Clothing Books / Magazines Tickets Music Movies Software Stocks Food 52 30 21 16 13 9 8 3 2 1 85 Question 8C: Are you concerned by the possible risks (such as fraud or misuse of personal information) when (if) playing/purchasing video games online? Why concerned? Yes, if company is not well known 4 Yes, because they have experienced frauds in the past 3 Yes, you don’t know what you get until you have it in your hands 3 Proof of ownership more muddy therefore more concerned when buying online Yes, concerned for their personal information, privacy Yes, don’t trust people on the Internet It depends but always check with friends and looks up vendors before purchasing Computer expert, therefore aware of the risks and are concerned 1 1 Why not concerned? No, not if vendor is a well known large company Not concerned but for no specific reason Not concerned because they have enough knowledge not to get fooled (aware of risks) No but comments and reviews are important No, trusts their credit card company / bank 33 15 10 4 4 1 1 1 86 Question 8D: Do you consider the risks to be the same for the different business models? If not which business models do you perceive is less secure and why? General Same risk for all business models Not concerned by any model because they have enough knowledge to avoid risks All models who use credit cards are more risky More risky if you must pay before getting the product Retail model Retail model less risky because it feels safer to have a hard copy of your product All online sources more risky Retail model less risky sense you can return to the vendor and get help Advertising model Advertising model totally safe since no money is transferred Advertising model most risky since they sell user information Advertising model most risky because of misleading ads Subscription model Subscription model feels safer because you pay every month for the service Micro transaction model Micro transaction model more risky for no specific reason Micro transaction model more risky because of a higher amount of transactions Micro transaction model more risky since you lose control of money spent Player to player model Player to player model more risky when you deal with transaction with other players Player to player model more risky because they don’t know much about it Player to player model more risky because of a higher amount of transactions 13 6 3 1 7 5 2 2 1 1 2 4 3 2 11 2 1 87 Question 8E: Is there any business model that, you believe, results in lower quality/less fun games? General The business model does not influence the game experience Advertising model These games are of lower quality These games are destroyed by ads/product placement These games are less fun for no particular reason These games are worse since players cant influence the game to make it better (it is controlled by advertisers) Micro Transactions model These games are less fun because they give players with more money an unfair advantage in the game These games are less fun for no particular reason These games are of lower quality These games are only out to grab your money hence they are less fun These games requires you to buy things to be fun hence they are less fun Player to player model These games are less fun because they give players with more money an unfair advantage in the game These games are less fun for no particular reason These games are less fun because other people can scam you 11 11 5 5 3 10 4 2 2 1 4 1 1 88 Appendix 3 – Survey layout Since a digital survey was used it is hard to make it justice in paper format. 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