Pricing Strategies for Gaming-on-Demand

Abstract

In the last few years, social gaming has resulted in signi cant upheavals in the tradi- tional video gaming industry. However, an even bigger threat looms large in the horizon. The advent of cloud gaming or gaming-on-demand is expected to disrupt the traditional gaming industry. However, the success of the gaming-on-demand model would depend to a large extent on the availability of broadband services. As the quality of broadband services is not uniform across the di erent geographies, pricing of cloud gaming services must take this non-uniformity into account. The paper provides managerial guidelines for cloud game providers on pricing their o erings. We develop a pricing schedule for a typical cloud game provider by modeling the non-uniformity of broadband availability, and a gamer's propensity to engage in gaming. We explore two pricing plans: usage based and xed fee plan. We determine the conditions under which gamers would select one plan over another, and discuss the signi cance of these conditions for cloud gaming providers.