The Advertising in Free-to-play Games: A Game Theory Analysis

Abstract

With the rapid market growth of free-to-play games, how to choose a proper revenue model becomes an important problem for the game provider. The classical method is the in-game purchase. To utilize the large install base of the free-to-play games, numerous game providers have also adopted advertising. This paper analyzes the mixing revenue model of the in-game purchase (premium subscription) and advertising. Taken the player's snobbery into consideration, we prove the mixing revenue model existing equilibrium in a two-stage Stackelberg model. The experimental result provides theoretical support in the design of the revenue model of the free-to-play games.