NFTs coming soon to your favorite video games?
In the first quarter of 1996, the Nintendo 64 was sold to 1.6 million Americans (at $200 each). Its closest competitor for the holiday season was a $30 Tickle Me Elmo doll, which sold around a million units.
When Nintendo's $300 Switch sold 1.5 million units in its first week more than 20 years later, there was a lot more competition, and not just for the holiday season.
The gaming industry has changed dramatically since the early days. A pronounced shift in the gaming landscape has been caused by the widespread adoption of the internet, which has dramatically changed the in-game monetization model as well as how games are marketed.
Unlike video game studios of the previous millennium, today's industry giants no longer rely on sales of games and gaming hardware to generate revenue.
The Nintendo company is a relatively rare example of a large studio that hasn't gone too deep into microtransactions. Epic Games makes around $5 billion a year from Fortnite, and you can bet most gaming companies are at least investigating the free-to-play model.
Consumer mindset has taken a long time to shift from deep loathing to moderate acceptance of microtransactions.
Even though Fortnite wasn't the first game to introduce microtransactions, it was the first mainstream example of a live-service game that solely relied on in-game purchases.
It was at a time when the concept of microtransactions conjured images of toxic loot-box economies and chance-based purchases that had games morphing into "pay-to-win" ecosystems at a time when consumers were growing increasingly frustrated with game publishers.
As a way of distinguishing yourself in-game and supporting the developers, Fortnite introduced microtransactions. While they did not affect gameplay, they prevented those with deeper pockets from dominating the games, as well as serving a purely vanity-fueled charity function. Does this sound familiar?