Economics in the Small and Independent Game Industry

Abstract

In order to look into the small and independent game industry this thesis presents an analysis of the business model of the game Minecraft using the ontology and framework defined in Osterwalders dissertation. The main pillars, product, customer interface, infrastructure management and financial aspects are explained in addition to various common revenue models used by game developers and publishers. The thesis further models the economy of the game and identifies its main cost accounts; storage, bandwidth, office rental, salaries, professional taxes, transactions and miscellaneous costs. Based on this, in addition to the revenues connected to the game, the thesis shows the most important success factors for the developer in regards to peer-production and value creation and shows the most important changes and suggestions for the future of the game.Furthermore, the thesis suggests important traits and effects for independent and small games based on the findings in the case study of Minecraft. Among these are free model effects and network effects in order to attract users and obtain high value networks at low costs and utilizing revenue models based on the value of the network through increased sales of value-added services, advertising and new market acquisition.