Ever since Minecraft has become a global phenomenon, companies have popped everywhere to benefit from the growing market. From children buying Minecraft, building teams helping companies exploit the openness and ease of use that Minecraft offers, to community servers finding an extremely expansive market in hosting games for players. With the market still in growth and never truly dying, people have found ways to optimize their business models and formed multi-million dollar companies.
Revenues, in order of niche:
- Community Servers: Since community servers benefit from the largest market in the Minecraft community (players), their revenues are the highest. Players purchase in-game benefits, either cosmetic or with real in-game value for large sums of money. The amount of server earns depends highly on the culture of the community they focus on, with the largest earners being focused on US players (for which, the average earn is over 30$/h), and the smallest earners focusing on eastern countries (Turkey, Russia, Romania: where earn is only 2$/player). Because of that, the market is highly differentiated based on the country they focus on. Players have different expectations, expenditures, and behavior.
- Building Teams: Building teams also benefit from the large market of players, but since their work often provides less entertainment than live interaction with other players, their earn is also reduced. With the release of the Minecraft bedrock marketplace, builders are now able to monetize their work at way better margins than before. This encouraged innovation in building, which in turn grew demand, and along with it, prices. The largest downside with build teams is their requirement to work with Mojang to use their marketplace. This means fewer percentages left to the builders and a big dependence on Mojang's policies.
- Developers: With these two main markets emerging and thriving, second-layer providers such as Developers now have a market to provide services to. While this niche is the worst paid, it also benefits from reasonable profits that can benefit sellers from third world countries and empower them to grow their skills. In my opinion, the limit that this market imposes is too small for any large company to develop, but this doesn't mean people haven't tried with moderate success.
- Youtubers: Youtubers have become a large reason for Minecraft's booming success. The large community and simplicity of the game make it a perfect public presentation tool. This gave rise to diverse youtube niches, all stemming from the game. Their revenues depend on the country of origin and the contracts they have, but it is safe to assume it's a good and sustainable business model.
Monetisation Platforms With gaming servers being harder to monetize than other venues, several dedicated community platforms were created:
- BuyCraft (now Tebex): BuyCraft was the first player in town, with its first plugin release on Aug 29, 2011. They quickly gathered most of the market and built a strong reputation for being reliable, efficient, and easy to use. Even so, their large costs meant both small servers (which couldn't afford the monthly cost) and enterprise networks (which wanted to avoid the 1% payment tax) started to look for alternatives
- Enjin + DonationStore : Enjin was the second player on the market and quickly started to be used by several large networks (eg: Mineplex). They cost less, came with a decent amount of features (forum, web hosting, etc) and supported a wide array of payment providers. Even so, the old look that enjin had along with decreasing support for Minecraft (as they moved their focus to crypto) again created gaps in the market.
- MinecraftMarket (now defunct): Minecraft market was the third player in the monetization platform business. With low costs and a "lifetime" plan costing only 15£, it quickly gathered many smaller income servers to use it. Unlike the previous two players, minecraftmarket came with more customization capability and was focused on the small server market. It suffered a security breach on 6/21/18, which along with a poor business model meaning always-decreasing profit margins made it die on June 21, 2018. This came with a large leak of client information containing hashed passwords, email, home addresses, etc.
- CraftingStore (Recommended by us): With minecraft-market defunct, low-income servers started looking for low-cost alternatives. CraftingStore's effective support and reasonable feature set made it a good choice for server owners to move to. With many large networks (eg: Gamster) also using their solution due to the large feature set and 0% income tax. It is now the biggest contender with Tebex. Since CraftingStore is a smaller player and has a less mature solution, it also means less stability and security. Luckily, they have been quick in patching security issues.
- DonationStore : Donation store is currently the only contender in the self-hosted marketplace market. With its business model being catered to a small number of networks, it is in my opinion the least favorable of choices. Being self-hosted means you take care of handling, updating and securing your own store, which drives focus from running your server to doing maintenance on things you can pay 15$ a month to get somebody to take care of it for you. The fact that the platform is self-hosted also means it is more prone to vulnerabilities, as the platform can't force updates on its customer base, and potential attackers can analyze the code to find vulnerabilities and exploit them. Again though, their team was quick to solve security issues, which along the self-hosted nature brings some value to the table.
The EULA controversy
With such a large market forming and relying on their game, it was reasonable to assume Mojang would take a stance. With their updated EULA, servers were now discouraged from exploiting the market (mostly comprised of children). This meant lower revenue margins for many servers, which now had to either comply or risk being blacklisted by Mojang.
Community drama Even though Mojang seemingly stepped out of the EULA battle, the expectations that players had changed. Many now viewed EULA compliance as a must and a sign of good server management. On top of that, several YouTubers jumped on the train, pointing to EULA non-compliance being a reason to cheat and attack servers. %[youtu.be/_gF67eaiLIk] With the video being a large success and garnering over a million views, several other YouTubers have also jumped on the train to exploit the trend. This restricted some communities to only following the EULA or face backlash from their playerbases.
Coming up with solutions Even though the EULA came with harsh restrictions, server owners have found ways to go around it and still keep their profit margins high. A few includes:
Bypassing the EULA: As time passed, people found a way to bypass Mojang's EULA by using SRV records. Many large-scale networks decided to ignore the EULA and benefit from this bypass to keep their margins the same. While this technique is relatively safe for medium to large servers (under 3000 PB), it is impossible to implement by the large players (Hypixel, GommeHD, CubeCraft) without being noticed by Mojang.
In-Game trades with real money: Players are encouraged to sell EULA friendly ranks to each other for real benefits. This allows players to pay to receive money or OP items from other members of the community. Since the server is not selling anything infringing on the EULA, it makes it both allowed and a way to reduce inflation due to injecting generated items. To incentivize this, server owners have to create rules and systems to ease this kind of transaction and reduce scamming. A good solution we have found is selling a virtual currency that can be used to buy store coupons. For example, if you sell 100 vcash for 1$, and the vcash can be transacted in-game either via in-game items (vcash vouchers) or commands (/vcash pay) and then cashed for coupons, this means players can virtually transact any item for virtual money.
Giving away global rewards: XP Boosters, Spawner boosters can be a good way for a server to still provide rewards for spending money in-game without infringing the EULA. Additional systems such as extra boosts, if the server is low on players, can make sure as few players receive the perks while still rewarding the purchasers.
Our Solution Our solution to incentivize payments by allowing players to transact with real money. This has proven to be the most effective method of increasing growth at a smaller scale (~75 PB) but has faced issues with larger, less close together communities. To offset that, we have created a safe to use coupon plugin that prevents scamming and handles potential dupes. It is built on top of CraftingStore's recently added coupon API and allows owners to grant virtual cash to players. Get ERCoupons Now