The rise of 'forever games' - and why Gen Z is paying for them

Selling games for £60 is no longer how the gaming industry makes money.

Loyal gamers willing to spend big on in-game purchases have become the industry's most lucrative customers, leading developers and publishers to make continually updated "forever games" that are free or cheap to access.

It reflects fundamental shifts in how and why people are playing games - shifts one expert believes could lead to a battle between gaming platforms and social media to host the next generation of online consumer culture.

The money - and Gen Z's different demands

Forever games are more commonly referred to as "live service" and encourage players to become part of a lasting, multiplayer, online community.

Publishers profit from players' continued engagement via in-game spending on things like character outfits, consumable items, season passes and subscriptions.

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Last year, in-game purchases accounted for 67% of global games revenue, or £94bn, according to MIDiA Research, a media and technology insights firm.

The proportion of that cash spent on character cosmetics alone, £54bn, dwarfed total direct game sale revenues, £29.4bn.

"Gamers that grew up as real digital natives, let's say Gen Z and younger, have very different reasons for why they play games compared with the older segments," Karol Severin, senior games analyst and VP of data at MIDiA, told the Money blog.

Some 27% of players aged 16 to 30 say they play to socialise, compared with just 12% of gamers aged 51 and older, according to MIDiA data shared exclusively with Sky News.

Their survey of 10,000 gamers worldwide found 62% of older consumers chose to play for "me time" - compared with just 38% of younger players.

Among those developers reacting to this shift is Crytek. Once a bastion of one-time purchase blockbusters like Far Cry and Crysis, the company has turned to a live service project, Hunt: Showdown 1896.

In August the company chose to release a massive update for the competitive, 19th century horror-shooter for free, rather than as a paid sequel.

David Fifield, general manager of Hunt, said maintaining its user base - and, in turn, the quality of the community - was behind the decision.

He likened paid sequels to kicking customers out of a concert and charging them admission again to come back for the second half.

"And a music festival with 10,000 people, that's like: 'This is all cool and I feel like I'm part of a good crowd.'

"Whereas if you went to the same park and there's only 900 people, you'd be like: 'What am I even doing here?'"

Connected to young gamers' desire to socialise is their appetite for self-expression online.

They are just as likely to define themselves by the clothes their online avatar is wearing as previous generations did by the cars they drove or gigs they went to, said MIdiA's Mr Severin.

Dressing up for an evening with friends can now take place in a virtual world, not just a real one.

"What kind of avatar they are wearing in Fortnite is a part of expressing who they are," he said.

It's a view shared by David Fifield, whose team has created hundreds of purchasable weapon skins and characters with distinct outfits to meet this demand.

Ever-increasing costs

At the same time, the cost of making games is "ever-increasing", explained Maria Sayans, an industry veteran who oversaw the launch of EA blockbusters like Battlefield, Mass Effect and Dragon Age.

"As a game developer, as somebody who's going to invest millions of pounds on making a game, all the incentives are there for you to try to extend that gameplay and really create more community around it."

Ms Sayans, now chief executive of one of the smaller studios reckoning with this challenge, Ustwo games, continued: "When you make a free-to-play game, every single second that the player is in the game is being geared towards retention and/or monetisation. The whole design is around those mechanics."

"It used to be enough to make a good game, that's not enough anymore," she added.

The catch

The problem is players have run out of new time to capture, said MiDIA's Mr Severin.

"Today, if you want to grow time spent as a game, you basically need to dethrone time that's already allocated to another app," he said.

This intense competition makes it much more difficult for smaller developers to break through.

Dr Richard Wilson OBE, head of the Independent Game Developers' Association (TIGA), who was honoured for his services to gaming, said: "These [live service] games are designed to keep players engaged over long periods, which can make it difficult for new or single-player games to stand out, especially those with shorter, narrative-driven experiences."

In this climate - and with rising costs - investors are more risk-averse, he said.

Almost half (48%) of studios founded between 2008 and 2018 failed before their fifth year, according to a TIGA report.

It's a concern to the gaming community, says Texan Twitch streamer Deejay Knight, a US air force veteran who swapped the rifle on his back to make a living filming with virtual ones.

"I stream hours of gameplay a day and I still don't have the time to play all the games that I want to play," he said.

"How many live service games can the industry sustain at once?"

The streamer adds: "There's going to be, probably, a reckoning in the gaming industry."

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What's next? A battle for consumer culture

How games keep players engaged will evolve, according to MIDiA's Karol Severin.

Consumers should expect to see gaming companies attempt to steal time spent on social media platforms.

Mr Severin said: "I'm talking about things like hosting music concerts inside games, premiering TV shows and movies inside games, doing more across entertainment IP spinoffs from games to movie, from movie to games, etcetera."

Games will increasingly build in features that allow players to create and distribute content within online worlds, he said.

"Over the next decade, the biggest battle for engagement and consumer culture - hosting it anyway - is going to happen between social media and games."