Player-vs.-Player Game Design and Pricing: A Tournament Design Perspective

This paper examines how game developers can effectively design player-versus-player (PvP) games while balancing revenue and player engagement. In many PvP games, the ability to purchase powerful items creates a “pay-to-win” environment, often frustrating nonpaying players. To address this issue, this paper proposes a tournament design model that allows developers to create different game versions with varying advantages, influencing players’ chances of winning. The findings indicate that this approach enhances developers’ pricing flexibility and mitigates competition between versions. By offering multiple free versions alongside paid options, developers can engage players who may be unwilling to spend money, thereby translating their willingness to play into other players’ willingness to pay. Furthermore, the model shows that tournament design can significantly increase profits, particularly among players with limited budgets. Ultimately, this strategy benefits both developers and players, fostering a win-win outcome for the gaming community. This work elucidates the rationale of the freemium model that offers differentiated free versions in games with PvP battles.