Price Differentiation in Video Games : A Closer Look at the Free-to-Play Segment

Companies which offer ‘free-to-play’ video games have to optimize the in-game-shop in order to generate revenues. Price differentiation is one possibility to optimize the profitability of the game. For example, Fortnite—the most successful video game in terms of revenues—offers uniforms (skins) at four different prices. This attracts different segments of the market. The authors use a microeconomic approach in order to highlight the implications of price differentiation for the profit maximization problem