In contrast to Western Europe, the US, and Japan, the monetization of video games took a different route in Eastern European countries.
This post will examine the manner in which the Eastern European gaming business changed from selling bootleg consoles and stolen cartridges to selling digital games, looking back at the years between the early 1990s and the present.
Nothing to Play for the East
The best times for gaming on PC and consoles were in the early 1990s. Nintendo and Sega were deepening their rivalry, and their persistent marketing strategies were taking over new territories.
However, these “wars” took place in Japan, Western Europe, and the United States. At the time, all the former Soviet-block-belonging nations possessed were locally made ZX Spectrum clones, which were rather rare and quite old. That was all about to change soon.
The Fall of the Berlin Wall and the Flood of Clones from China
Western and Japanese businesses were able to access Eastern European markets with the demise of the two blocs. Due to the high demand for games among the local population, gaming swiftly spread beyond the domain of a few groups of fortunate geeks with access to ZX Spectrum or PC clones.
Nintendo clones made in China overflowed the East, whereas the US and Western markets adopted a straightforward monetization strategy embodied in authorized partner outlets’ selling of original software and consoles. The majority of the game cartridges had been plagiarized, and some of them were rather funny—for example, ones that were advertised as 999 in 1, but actually included 999 different color variants of the same game.
These cartridges were offered for sale in adjacent markets along with clothing and fresh fish. Getting an authentic Sega or NES cartridge in original packaging was difficult, and the costs were high. You could obtain a few counterfeit games for the same pricing as an authentic one, but even if you were able to find one, you would want to give it a second thought. Due to a combination of these issues, the video game industry in post-communist countries was growing, but game developers weren’t profiting from it at all.
Due to the consoles’ high cost, a surge in establishments known as internet cafés occurred; these were locations that charged by the hour and had TVs, original consoles, and game cartridges, just like arcades in the US or Japan, but with a different monetization mechanism and no revenue sharing with game developers. That means that hundreds of children visited these venues every day, using their food money to play Mortal Kombat for a few rounds while the audience in the background supported them in one way or another. In addition, those cafes provided a luxury type of entertainment—the ability to rent a game console and several cartridges for one or two days.
Game Developers Enter the Market: The “Big Boys” Finally Catch Up
People started purchasing more consoles by the late 1990s as the economy of the Eastern European states expanded. Developers and publishers finally took notice of this and realized how lucrative this market could be. As partner stores and official retailers began to open, the market started to catch up with other parts of the world.
Thus began a new chapter in the battle between legitimate retailers and shops selling pirated video games. With the PlayStation 1, Sony swept the industry. Although the PC was endowed with fantastic games, it still had to deal with piracy. Certain publishers and developers declined to distribute their games in particular nations or areas because they anticipated significant game piracy.
Those who decided to go in did so in collaboration with anti-piracy software makers, who set up systems that demanded PC gamers keep the game’s CD in the CD-ROM at all times. This helped to mitigate the issue of piracy for select games. However, the quantity of units sold remained insufficient for the market, which had tens of millions of prospective buyers.
It was obvious that a totally different strategy was required for this fight. Gamers had to be enlightened about the creation of video games. It was necessary to narrow the disparity between the players and the developers, and gaming media played a key role in this. In the early 2000s, the first gaming magazines and websites did a fantastic job of accomplishing this.
Internet Opens Its Door to the Gaming Industry
Prominent web games such as RuneScape, Diablo 2, and StarCraft provided individuals with adventures, amazing experiences, and restless nights. These games also contributed to the producers’ revenue. With the arrival of Valve and Half-Life 2, people realized all of a sudden that they were no longer purchasing video games at physical stores.
In Eastern European nations, console games with DRM also proved successful and gained ground against pirates. They took a while to accept the expanding role of eCommerce in gaming, though. Because of hardware restrictions, they didn’t provide the possibility to purchase games via the Internet and download them to the consoles. Xbox 360 and PS3 caught up a little later.
The Market’s Solidification and Steam’s “Hegemony”
Thousands of titles had already been added to Steam by 2010. The means of payment and country scope were the only issues. Many physical versions of PC games were accessible via Steam after purchase because stable Internet connections and online payment methods weren’t as widespread at the time. The gaming industry benefited from these rapid technological breakthroughs in eCommerce and the web for the benefit of both developers and players.
As a result, Steam gained a disproportionate edge over other PC gaming platforms, leading to intense competition amongst them. Exclusives turned out to be the primary tool in this conflict, thus both Microsoft and Sony built and purchased many companies that produced well-paying employment in the videogame business. However, Steam charged an ever-increasing commission for its platform services, which were available to any publisher or developer.
The Future of Monetizing Video Games and the Market’s Democratization
As of the writing of this post, the commission is a substantial 30%. This percentage is now ingrained in the gaming industry and can even be found on our cell phones. However, Valve recognized the significance of geographical differences and developed the idea of regional pricing, which democratized gaming for underdeveloped nations.
Still, in order to make a profit and deal with exorbitant commissions, game developers had to increase their pricing. With the competition amongst Steam, Epic Games, Google, Microsoft, and Apple growing, creators are finding new methods to monetize their work through marketing and financial solutions. They keep breaking into new markets and making millions of players happy all across the world.
With any luck, this approach will eventually level the playing field, democratize the market, and increase the opportunities for creators and players alike.
Eastern European eSports and Competitive Gaming: A Market Not to Be Overlooked
Esports and competitive gaming have seen a global upsurge in popularity in the past several years, with Eastern Europe serving as a specific hotspot.
A balanced and extensive cross-vertical offering is more important than ever in this extremely competitive environment for gaming companies but also betting operators that include eSports in their offerings. The growing demand for gaming content and the resulting engaged audience have given providers a fantastic chance to provide a fresh supply of interesting material.
There’s a lot of potential for eSports and competitive gaming and betting, especially in Eastern Europe. The audience numbers and income figures in the region demonstrate the widespread appeal of gaming content, and the statistics are quite remarkable. There are an estimated 3.5 million online gamers in Eastern Europe, and the region’s digital gaming revenue is expected to reach over $2 billion annually, expanding at a rate of 7% annually. Furthermore, eSports competitions attract large attendance. The Intel Extreme Masters were held in Katowice, Poland, earlier last year for the third time; from beginning to end, a bit less than 24 million hours were watched.
Bookmakers and casinos with sportsbook sections in the region, such as casino sites in the Czech Republic, should try to capitalize more on the fact that eSports and other competitive gaming genres have become popular in Eastern Europe by luring in casual bettors with event-based offerings.
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