Part 10. Dissolving Boundaries — Hybrid Business Models and GaaS

Games once had endings.

The final screen of a 1980s console game said “THE END.” After game over, you started again or inserted another cartridge. Payment was already complete; the transaction ended when you bought the package.

Subscription MMORPGs altered that structure. The game continued for as long as you paid $14.99 a month. Yet they too assumed the idea of an “end.” When users exhausted the content, they left, and the company had to release another expansion. The cycle was “deliver a finished product → users consume it → deliver the next finished product.”

In the mid-2010s, another kind of game appeared: games that did not end. Release was the beginning, and the game kept changing. Each time users logged in, the world was slightly different. This was GaaS—Games as a Service, a model that treats a game not as a finished product but as a service.

GaaS changed more than the revenue structure. It changed the relationship between game and user: from “owning a game” to “joining a game.”

League of Legends — The Paradox of Completely Free

League of Legends (Riot Games, 2009) was completely free.

Downloading and playing cost nothing. Champions, the in-game characters, entered a time-limited free rotation or could be purchased with IP, a virtual currency earned through play. Users could also buy them directly with cash.

What, then, did the game sell? Skins—cosmetic items that change a champion's appearance. They do not affect win rate; the statistics of the same champion remain identical with or without a skin.

Users bought them anyway, for two reasons. First, they wanted their favorite champions to have a preferred appearance. Second, their teammates could see it. Collection and display: a structure in which users paid to express identity, not improve performance.

Where did this structure land among existing payment habits? Clothing and fashion. Two pairs of jeans can perform the same function yet differ in price by hundreds of dollars because of their brands. Just as clothing is not solely about regulating body temperature, a game skin is not solely about winning. The payment answers the question, “How do I want to appear?”

Riot Games has continually updated League of Legends since 2009. It added champions, overhauled maps, adjusted rules, introduced seasons, and awarded season-specific ranked rewards. The game became not a “finished product,” but a “living environment.”

In 2012, League of Legends became the world's largest PC game by monthly active users, retaining the position for years. Riot does not officially disclose revenue, but market researchers estimate that the single title peaked at approximately $2.1 billion in annual revenue in 2017 and has continued generating well over a billion dollars a year.

The League of Legends model is often cited as an archetype of “GaaS + cosmetic sales.” The game itself is free, and the longer users stay, the more payment opportunities accumulate.

Fortnite's Battle Pass — Inventing the Season as a Unit of Time

In September 2017, Epic Games launched the battle-royale mode of Fortnite. The genre, in which one hundred players land on an island and fight until the final survivor remains, had just been popularized by PlayerUnknown's Battlegrounds (PUBG, 2017).

Fortnite Battle Royale was free.

Beginning with Season 2 in December 2017, Fortnite introduced the Battle Pass. For $9.99, users could play through the season and earn one hundred tiers of rewards: cosmetic items including skins, emotes or dance moves, and pickaxe appearances. Free users received only some of the rewards.

The Battle Pass had three core elements:

• Season deadline: A pass ended with its season, roughly ten to thirteen weeks. Season-specific skins were obtainable only during that period.
• Progression rewards: Playing raised a user's level and accumulated rewards. Playtime was linked directly to reward acquisition.
• Advance disclosure: The complete list of rewards available that season was visible from the start.

The last element is the decisive difference from gacha. Gacha conceals what the next draw will produce; a Battle Pass shows what can be received from the beginning. The condition is that the user must play enough during the season to earn it.

The payment motive—“I already paid $9.99, so I need to play in order to receive the rewards”—increases playtime. More playtime then raises the likelihood that the user will buy the next season's pass. The cycle repeats.

There is another element: FOMO, the fear of missing out. When the season ends, its limited skins can no longer be obtained. The restriction “only during this season” pulls the purchase decision forward. Psychologically, it resembles the arcade game's game-over countdown: the anxiety that waiting means losing the opportunity.

Fortnite's cross-platform strategy also deserves attention. Epic offered it for free on PC, PlayStation, Xbox, Nintendo Switch, iOS, and Android. One account worked across devices, and purchased skins appeared everywhere. No matter where the game was played, the wallet was the same.

Fortnite's estimated annual revenue in 2019 was roughly $1.8 billion.

The Battle Pass later spread to many other games, including Apex Legends (EA/Respawn, 2019), Rocket League after its 2020 F2P transition, Call of Duty: Warzone (2020), and Valorant (Riot Games, 2020). Since 2020, it has become the de facto standard business model for multiplayer GaaS titles.

Destiny — An Early Experiment in GaaS

Before Fortnite, there was an early attempt at the GaaS model: Destiny (2014), jointly released by Bungie and Activision.

Destiny began as a $59.99 packaged game, but its internal structure differed from the traditional package. Endgame content, including raids and Nightfalls, received regular updates, and seasonal events continued to run. The design assumed ongoing content consumption rather than a single purchase of a finished product.

Its expansion policy, however, became controversial. The Taken King, released in 2015, cost $39.99. A complete edition for new users cost $59.99. Existing users had to spend more than newcomers to enjoy the same content.

Destiny 2 (2017) also launched initially as a $59.99 package, then shifted to F2P in October 2019 to broaden its user base. Existing customers objected that a game they had bought was now free.

The Destiny series is a transitional GaaS case. Package purchases, expansions, an F2P conversion, and season passes were tried in succession.

Fall Guys — The Transition from Paid to Free

Fall Guys: Ultimate Knockout launched in August 2020 from Mediatonic, which Epic Games later acquired. It was a battle royale in which sixty players navigated a succession of obstacle courses. The launch price was $19.99.

The response was explosive. On Steam, concurrent users peaked above roughly 170,000 in August 2020. On PS4, the game was offered free through PlayStation Plus.

One year later, however, the user population had fallen substantially. In June 2022, after Epic's acquisition, Fall Guys became fully free to play and introduced a season-pass system at the same time.

The number of users surged again after the change. Reports indicated that more than ten million new users joined during the first week of free access.

The case reveals a paradox of the GaaS era. If a paid game struggles to retain users after they exhaust its content, an F2P conversion combined with cosmetic monetization can produce a longer life. The unresolved task is managing the emotional resistance of existing paying customers.

Failure Case: Anthem — When the Promise of GaaS Goes Unfulfilled

BioWare built its reputation on story-centered single-player RPGs, especially the Mass Effect and Dragon Age series.

In February 2019, it released Anthem, a GaaS-based shooter published by EA. Its prelaunch marketing emphasized continuing content updates, seasonal events, and long-term expansion of the world.

Anthem cost $59.99 at launch. Although it was GaaS, an initial purchase was required. Buying the game signaled an “investment in the service.”

After release, players encountered a short story, too little endgame content, numerous bugs, and promised seasonal updates that were delayed or reduced in scope.

In February 2021, EA officially canceled plans for a major redesign of Anthem. It announced that the existing service would remain available but further development would stop. Users who had paid $59.99 were left with a game kept online without additional development.

The GaaS model contains a “service promise.” A user's $59.99 is not merely payment for a finished game; it is an investment in a service expected to receive continuing updates. When that promise goes unfulfilled, the feeling is more than dissatisfaction. It is betrayal: “The service I invested in has withdrawn.”

Diablo Immortal — A Collision Between F2P and an Existing IP Space

At BlizzCon in 2018, Blizzard Entertainment announced Diablo Immortal.

The atmosphere in the hall turned cold. After the presentation, an audience member took the microphone and asked, “Is this an out-of-season April Fools' joke?” The question became widely quoted.

Since the 1990s, Diablo had been an action-RPG series supported by core PC gamers. Immortal was a mobile game, co-developed with the Chinese game company NetEase and built around a mobile F2P business model.

Following its June 2022 release, game analysts estimated the maximum payment required to secure a complete set of top-tier items—the strongest equipment in the game. Estimates reached hundreds of thousands of dollars, though they varied by analyst and were not confirmed official figures.

The PC version's Metacritic user score fell to 0.2 out of 10 shortly after release, at the time the lowest score ever recorded. The criticism was not chiefly about gameplay quality. It was resistance to the very idea that “the Diablo IP had been turned into a mobile F2P gacha game.”

Actual revenue told a different story. Reports said the game generated roughly $100 million within three months of launch.

The case demonstrates that the users criticizing a game and those paying for it may be different people. Existing Diablo fans—core PC gamers—and casual mobile users occupied different payment habit-spaces. Diablo Immortal did not land fully within the established fandom's space, but it did land within part of the mobile-user space.

“The reaction is bad” and “revenue is bad” are different diagnoses. We must identify which space a reaction comes from.

Roblox — The Platform Where Users Create the Business Model

Roblox (Roblox Corporation) launched in 2006. The platform itself was not one game but a metagame structure in which users created games for others to play.

Its core business model centers on Robux, a virtual currency purchased with cash. Users spend it on items, avatar clothing, and access rights inside games made by other users. Creators earn Robux from their games and, after meeting certain conditions, can exchange it for cash.

Roblox Corporation does not directly create the game content in this structure. It operates the platform and virtual-currency system. Users—the developer community—make the content.

In 2023, Roblox averaged roughly 68.4 million daily active users, a substantial share of them under thirteen. At the close of its first day of direct listing on the New York Stock Exchange in March 2021, its market capitalization was approximately $38 billion, or roughly $45 billion on a fully diluted basis.

Roblox's payment habit-space is toy purchasing. The established habit of children asking parents for games and toy accessories connected naturally to Roblox gift cards and Robux top-ups. Parents bought Roblox gift cards for birthdays and holidays. This was not a new payment habit, but a new channel for an existing one.

The model demonstrates that a platform can transfer the cost of content production to its users. Roblox Corporation could never develop hundreds of thousands of games itself. Instead, its community creates the content and other users consume it. Roblox intermediates the transactions and takes a percentage.

The company operates Developer Exchange, or DevEx, a revenue-sharing program that allows developers to convert earned Robux into cash. As of 2023, leading developers were known to earn from hundreds of thousands to millions of dollars per year through the system. Users create games; those games attract other users; more content attracts still more users. It is a self-reinforcing structure.

Virtual YouTubers — How Idol Fandom Landed in Streaming

In November 2016, Kizuna AI appeared on YouTube. A virtual character was directly operating a YouTube channel. This was an early form of the virtual YouTuber, or VTuber.

The VTuber business model includes:

• Super Chat: A donation feature during YouTube livestreams. Users choose an amount to send, and their message is highlighted in the chat, making it more likely that the streamer will read it.
• Memberships: Monthly subscriptions offering exclusive emojis, badges, and members-only content.
• Merchandise: Physical products such as character figures, light sticks, and albums.
• Digital products: Voice packs, wallpapers, and other character-related digital content.

Cover Corporation, which operates Hololive, was founded in 2016. Its first affiliated VTuber, Tokino Sora, debuted in September 2017, and the Hololive group brand formally launched in 2018. By 2022, numerous Hololive VTubers ranked near the top worldwide in YouTube Super Chat revenue.

The payment habit-space of the VTuber is idol fandom. Fans of Japanese idol groups have long spent heavily on concert tickets, handshake events, and limited-edition merchandise. VTubers transplanted those fandom habits into livestreaming and Super Chat.

There is one difference: idols are physical people, while VTubers are virtual characters. Yet the fans' payment behavior is similar. They pay for the experience of “eliciting a direct response from the character or person I support.”

The psychology of Super Chat is particularly interesting. The sender wants more than to make a donation; they want the streamer to read their name and respond during the broadcast. It resembles throwing a bouquet at a concert, then watching the star pick it up and acknowledge you. The experience also connects with the arcade structure discussed in Part 6, where a spectator becomes a participant.

VTubers also occupy an important place in game-streaming culture. Streams from Hololive members have at times affected game sales. The relationship between streamer and game company has evolved beyond simple promotion into a new distribution channel.

Controversial Case: NBA 2K — The Paradox of Repeated Purchases

The NBA 2K series (2K Sports/Visual Concepts) is a sports simulation with a new version released each year. It is a $60–70 packaged game.

MyTeam mode lets users collect player cards and assemble a team. Its structure resembles EA's FUT. A purchased pack contains an unknown player, and the highest-tier athletes appear at low probabilities.

Across NBA 2K19 (2018), 2K20 (2019), and 2K21 (2020), criticism within the fandom grew over the intensity of paid elements in MyTeam. Even after buying a package costing more than $60, players needed additional purchases to assemble a competitive team.

The structure presents a particular problem. A new version arrives every year, but cards and money invested in the previous edition do not transfer. Each year, users start again and repeat the same payment structure.

As of 2022, the United Kingdom, the Netherlands, and other countries were debating gambling regulation for paid in-game item packs. The NBA 2K series was mentioned in these discussions.

The NBA 2K dilemma is also the dilemma of sports games throughout the GaaS era. The annual-new-release structure, driven by license renewal and player-data updates, conflicts with the long-service philosophy of GaaS.

Xbox Game Pass — Turning the Game Library into a Subscription

If GaaS operates at the level of one game, there is a larger unit of GaaS: turning the game library itself into a service.

Microsoft launched Xbox Game Pass in 2017. A monthly fee of $9.99 to $14.99 provided unrestricted access to hundreds of games. Microsoft's new first-party games joined Game Pass on their launch dates.

The core model is identical to Netflix. Users subscribe to access a game library rather than buying individual titles. Netflix offers a film and television library by subscription; Game Pass does the same with games.

For users, the habit moved from buying one game for $60–70 to accessing hundreds for $14.99 a month. It is access, not ownership. A user does not possess the games and can play them only while maintaining the subscription.

For game companies, the inclusion of Microsoft's first-party titles changed the meaning of sales. “How many copies sold?” became less important than “How long did Game Pass subscribers play?” As of 2023, Game Pass had tens of millions of subscribers.

Game Pass is a descendant of the Sega Channel (1994) discussed in Part 7. The 1994 attempt to subscribe to games through cable television became viable at scale in the internet era.

The Fortnite Concert — The Moment a Game Becomes a Venue

GaaS evolved in another direction: game space became event space.

In April 2020, rapper Travis Scott held the virtual concert “Astronomical” inside Fortnite. Users watched the performance in the game. Epic Games reported that roughly 12.3 million people participated concurrently, at a time when COVID-19 had made physical concerts impossible.

The game became a performance venue. Users entered Fortnite to play and encountered a concert. The event was linked to a limited skin release, with Travis Scott cosmetic items sold during the event. Game event and cosmetic sales were combined.

Marshmello (2019), Ariana Grande (2021), and other artists held similar virtual concerts inside Fortnite.

The structure shows that a GaaS space can do more than continually supply game content. It can expand into a stage for other forms of entertainment. “The boundary between game and performance dissolves”—the precise theme of this chapter.

Cross-Platform — A World Where the Wallet Follows the Device

Fortnite opened another door: cross-play and cross-platform purchases.

Before 2018, in-game purchases were bound to their platforms. A skin purchased on PlayStation could not be used on Xbox. Moving to a new device meant starting purchase history again.

Fortnite allowed one Epic Games account to share the same skins and purchases across PC, PlayStation, Xbox, Nintendo Switch, and mobile. It was also the first game to implement cross-play broadly between PlayStation and Xbox.

This shift affects the payment habit-space. The lock-in effect—“I have already bought so much on this platform that moving is difficult”—moves away from the platform and into the account and purchase history. What a user paid for follows them when they change platforms.

The structure is convenient for users but unfavorable to platform operators. It weakens the traditional practice of locking users to a platform through exclusive titles and exclusive purchase histories.

Sony Interactive Entertainment, which operates PlayStation, was initially reluctant to support cross-play. It rejected Fortnite's requests until 2018, then allowed them. Nintendo, by contrast, continues to pursue exclusive content within its own ecosystem. Open cross-platform and closed-ecosystem strategies coexist in the game market of the 2020s.

Hints from This Chapter — Checkpoints for New-Content Planners

Checkpoint 1: Does my content design what happens “after release”?

The essence of GaaS is that launch day is a beginning, not an end. How does your content remain alive after release? Without an update cadence, seasons, and event structures, users consume the content and leave. The first task is not to make content without an ending, but to design “what comes after this content.”

Checkpoint 2: The core of the Battle Pass is a promise

The Battle Pass works because users know in advance, “I can receive these things during this season.” If the outcome is unknown, it is gacha. If the reward is clear but time-limited, it is a Battle Pass. When designing a limited-time benefit, first decide what to disclose so users can assess its expected value in advance.

Checkpoint 3: Critical opinion and payment behavior are different signals

Diablo Immortal recorded both one of the lowest user scores ever and more than $100 million in revenue. Critics and payers can be different people. Distinguish which space contains the users who criticize and which contains the users who pay. Reactions on social media and actual payment data are separate information.

Checkpoint 4: Is there a business-model space created by users?

Roblox built a structure in which users create content and earn revenue into the platform itself. Can users create value for other users inside your content? If so, the community shares part of the cost of content production. First, however, verify that the revenue-sharing structure is transparent and sustainable.

The next chapter moves to the moment when games become venues: esports, game broadcasts, and the structure in which watching becomes a payment habit. Why do users pay even when they do not play the game themselves?

Kim Dongeun WhtDrgon@MEJE.kr 2026