The past few years free-to-play games such as Fortnite are becoming increasingly successful in the industry, driven largely by downloadable content (DLC). Downloadable content is add-ons to games that benefit consumers and are driven by positive network effects by an increasing userbase, the users realize the game has a higher utility due to more users playing causing DLC purchases to rise. This study examines how free-to-play games and premium games expenditures benefit from positive network externalities through an increase in users. A sample of 37 observations regarding the top earning free and premium games and a sample of 95 of the top ranked games from 2018 to 2019 are used in this study. I argue that free-to-play games have a larger positive influence than premium games and then analyze an equation regarding to my hypothesis. Four regression models are run using a Pooled-OLS methodology and robust standard errors. Two of the four specifications use revenue per player as the dependent variable and the other two use a consumer rank. Overall, the results show that the variables tested were not statistically significant.
Schuch, Zach Dean, "An Analysis on Free-to-Play and Premium Games and Their Effects from Positive Network Externalities and Keeping Up With The Joneses Theories" (2021). Senior Independent Study Theses. Paper 9543.
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2021 Zach Dean Schuch