Allow me to translate (Gaming)

by squidnh3, Tuesday, July 07, 2020, 14:42 (1387 days ago) @ Cody Miller

Can you expand upon this? Isn't every game hedging on future value to be successful? A game in development has no present value, since nobody can buy it. Unless you're talking about advertising pairings, tie ins, product placement, etc. But that wouldn't really change either way would it?

Creating games costs too much and takes too long to rely on future value for financing. Games are paid for by the success of some previous game - that's what publishers are for, to move money around from game to game. However, game sales are presumably very spiky and concentrated around certain times of year (e.g., the holidays). It's less risky to have a uniform distribution of income over time, because that's more or less the distribution of expenses (salaries and overhead) on development. Microtransactions solve that problem by providing a reliable cash flow. It's also true that money sooner is worth more than money later. That's where the Fortnite model comes into play - the sooner a game can be released and establish that cash flow, the better, even if features are not complete.