We Lost the Battle on Microtransactions

We Lost the Battle on Microtransactions

We’ve lost the battle on MTX. Outrage for horse armor has been replaced with joy on the Carleton dance. Most people are OK with cosmetics in the store, it’s simply the price point that is debate point. 

Asmiroth (2019), Dark Clouds at Acti-Bliz (Leo’s Life)

Asmiroth’s post as you may have gathered by the title focused most on the rumoured impending lay-offs at Activision Blizzard. I replied with a comment before I left for work, but the above quote has stuck with me through the day.

Did we actually lose?

And was it ever even a battle?

Now, I’m not experienced in the games industry. I have no insider contacts. For all I know, they’re every bit as evil as we’d sometimes like to believe.

But I doubt it. I don’t have experience inside the games industry, but I do have strong parallel experience from working in product and propositions for a corporate in another industry that people love to hate. We sometimes have to make decisions that make media in less than positive ways.

We have people very focused on the business interests. The short term profitability, tactical decisions. But we also have people whose job it is to put the customer first and advocate for their needs. Long-term success requires a healthy tension between the two.

Decisions in favour of the business (e.g., microtransactions) are often the very things that allow for decisions in favour of the customer (e.g., Anthem giving story DLC to all players for free).

At the very least, consider this an alternate perspective.

First, Let’s Talk Money

In 2004, when Half-Life 2 launched the ‘Bronze’ edition (i.e., standard) cost US$49.95 ($US66.43 in 2019 money). It had a development budget of US$40m (US$53.2m 2019).

If the box-price of games followed in line with the growing costs of AAA development — we would be paying ~$US97.50 for a game’s standard edition.

Last year’s Shadow of the Tomb Raider cost $US59.99 to buy, and had a development budget of up to $US100m.1

In real dollar terms, that means we’ve had an almost 11% reduction in cost to purchase a day-1 title vs. an increase in cost to develop a modern AAA title by 46.8%.

If the box-price of games followed in line with the growing costs of AAA development — we would be paying ~$US97.50 for a game’s standard edition.

And Shadow of the Tomb Raider is not even a particularly exceptional example. Some titles have cost more, and the predictions indicate development costs for AAA titles will only continue to increase.

Of course it’s a little more complex than this. This doesn’t cover all the material factors. One could also consider the growing addressable base as more and more people accept gaming. The relative ease of cross-platform releases now compared to then. Or likely a dozen more factors I’m not presently thinking or even aware of being an outsider to the industry.

But the bottom line of it is, that MTX subsidise the increased costs of development where a box-price increase of the required magnitude could well price AAA games out of reach for many.

Test & Learn, Adapt

Sometimes, the money-people get a little too much power, or get to make one decision too many. This appears to be where Activision-Blizzard are at presently. It would have been the case in EA, when decisions on monetisation in Star Wars Battlefront II for launch were made.

To an extent it is their job, to push the envelope and find the edge of profitability, the edge of what consumers will bear.

But ideally the balance of power internally is not so far off that when it becomes exceedingly clear that edge has been found? Or even surpassed? That the customer-focused advocates in the business cannot pull things back.

There has been no indication as yet that Activision-Blizzard has found how to rebalance. EA by contrast does appear to be learning its lesson. Possibly out of fear, as I noted in an earlier post.

I think EA has been sufficiently frightened off being too obnoxious for a time by the fallout over lootboxes and the intense backlash they’ve received; not only by their customers but by legislators and as a result their shareholders.

Naithin (2019), Why Anthem? Why not The Division 2? (Time to Loot)

They appear to be in the ‘adapt’ phase, with full removal of paid loot boxes in current and upcoming titles such as Anthem, giving solemn promises not to introduce them after launch.

Anthem will have MTX for cosmetics, but real money will not be the only means of purchase. They will also be obtainable purely through ingame means. That neither the real world cost nor the time required to gain sufficient ingame currency has been revealed is certainly the cause of consternation in some quarters.

I might be crazy, but I’m willing to give them the benefit of the doubt in this until proven wrong. I feel not screwing over their player base on this to be inline with where they’re at on the corporate swing at the moment. Time to adapt.

It’s Not All Roses Though…

As you may have gathered throughout this piece (or from the original comment I left) I wouldn’t exactly jump with joy for a Carleton dance, I am fairly accepting of cosmetic MTX. At least when handled in a fair and reasonable manner.

In the transition to MTX, there have certainly been losses though. I want my expansions back, dangit. No — not little pieces of DLC with a few tidbits of story and maybe one or two no areas. I want the good stuff. The expansions that essentially came with all new campaigns, like Neverwinter Nights!

Sure, they still exist in pockets here and there. WoW is a pretty easy example to point at. But there was a time when it was essentially a given that any truly successful title would gain at least one full expansion.

I would happily pay for them. But they’re also a much greater risk to a company than the more bite-sized content. Perhaps a topic for another day. :)

Footnotes

  1. Given came out Sept 2018, I have not adjusted for inflation. Also worth noting these costs are development only and do not reflect marketing costs which can easily double the overall spend.

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8 thoughts on “We Lost the Battle on Microtransactions”

  1. Funny thing to me. We have Anthem coming out, no “loot boxes” and all the YouTubers are savaging it because “don’t trust EA” yadda yadda. But then Apex Legends comes out, also from EA, powered 100% by loot boxes, and all we hear is “Apex Legends is AMAZING!!!”

    It’s like there is some weird herd mentality in gaming and somewhere an evil wizard decides what games the “influencers” are going to embrace and what ones they’re going to hate on, and there’s no logic behind it.

    I never really cared about loot boxes and I wonder what percentage of actual consumers really did. I’ve rarely, if ever, purchased any, and I’m not competitive enough to worry about whether the guy I’m playing against is beating me because he spent an extra $15 for a weapon or because he has 40 hours/week of free time to spend getting better than me. I understand why people who DO play competitively don’t want someone to be able to skip the hundreds of hours of practice and instead buy power. It just never bothered me personally very much. In fact I was happy there were “whales” dumping $$ in the studio so I could get more stuff free! LOL

    • The logic here is that Apex is F2P + MTX, while Anthem is B2P + MTX. A bit like Path of Exile/Diablo 3, or Destiny/Division/Warframe.

      People are insanely willing to accept lootboxes in a F2P game since there’s no entry price. Like a free trial, with some bells and whistles.

      People also watch something like BLOPS4 and see MTX come in after the review cycle and wonder why they had to pay the $60 entry fee in the first place? That’s ~$30m more in Activision’s pockets AND the F2P $$$.

      After the success of Apex, and crash of BFV I would be really surprised if any future AAA shooter (that isn’t in gold mode now) had a box price.

      • Using this comment as a reply to both of you, Pete and Asmiroth. :)

        I didn’t even start down the track of when lootboxes / MTX move from subsidising to completely covering! I do agree with Asmiroth that there is something of a valid reason to accept or at least consider a different set of rules for F2P over B2P.

        It sounds like we might have a bit of a difference of opinion though, Pete, on where an appropriate line should be drawn – even if talking F2P titles. I’m completely against any form of Pay to Win, or Pay for Power. That includes paying to skip time that is so popular in the cesspool of mobile titles.

        XP Boosters are an interesting one though, because they essentially offer that pay to skip time function in a way, but in a title like Warframe or War Thunder they don’t immediately make me consider them a bad thing. I’d have to think on why that is, but that the title is quality and free may have something to do with it.

        Or maybe because unlike in many of the Mobile titles that offer a direct pay-to-skip function, it actually is humanly possible to reach the same level of power as a free player. It isn’t just lip service, you actually can. That’s probably a big part of it for me.

        And then Activision Blizzard! Ugh, I hear you on that one Asmiroth. I indicated in the post too, but I just see no sign of them learning or turning the corner with any of their customer-first people leading the way. With all the departures they’d already suffered even before this round of lay-offs, and the sounds of how the culture is there… It’s possible they have several more really painful lessons ahead, both for them and their remaining customers, before they finally see the writing on the wall with their current path.

        Interesting take on future top-tier shooters going F2P as well though Asmiroth. Not sure I necessarily agree, but I would certainly concede it being possible.

      • Yeah but it makes no sense. Consumers should measure the cost of a year of gaming. F2P with loot boxes end up costing more than $60 that way. Ask any parent of any kid who plays Fortnite.

        • There are some rare folk who have wills of iron and never spend a cent in a F2P game, no matter the odds they’re up against. My wife is one of these, she manages to play a few of those terrible Facebook games and has never so much as wanted to buy the ‘gems’ or whatever else.

          Then there are others, like me, with willpowers with all the strength of a wet paper bag, who will impulse buy way beyond the cost of a box at times. ;)

          In any case — with a logical brain activated, I think you’re right. But I think the less rational / more emotional side tells us this is OK since they didn’t take any of our money in the first place.

  2. People always act as if microtransactions were this evil thing thought up by greedy corporations, but I still remember the time when the subscription model ruled the roost in the MMORPG space at least and there was a certain group of players who were constantly complaining that they couldn’t buy things in smaller chunks instead. I also remember when World of Warcraft added its first ever item purchase to the game and people were crashing Blizzard’s servers in their rush to spend $25 on a sparkly pony. That we ended up with some weird outgrowths of additional transactions over time is another matter, but generally speaking, gamers as an audience have been signalling a demand for more things to spend money on from the beginning. It was hardly some purely corporate conspiracy.

    • Interesting take, Shintar.

      While I’m certainly not on the ‘MTX are evil’ bandwagon, I wouldn’t have really have laid any sort of attribution to player clamouring for them as the impetus. Certainly the likes of the WoW Sparkle Pony gave a fairly strong evidence base to KEEP doing it.

      But the conversations I recall back around the time of subscription models being king and the start of the F2P model trying to edge itself in was one of the greatest disdain for the F2P / MTX titles.

      There was a distinct feeling of distrust, that they were low effort cash grabs prioritising the MTX over player fun.

      It was Allods Online that first grabbed my attention and started shifting the needle on my thinking that maybe they wouldn’t all be low-effort titles after all.

      Certainly at the time it did have a heavy reliance on Pay-to-Win MTX though, and that was a fair turn-off after a very short while.

      I’d be hard pressed to say when I think the F2P model for MMOs became more generally accepted though… Possibly with the first Guild Wars where you purchased the box, but then had no Subscription? I remember that model being a major win in my circles at the time at least.

  3. Hey all — it appears that unfortunately the lay-offs at Activision Blizzard are no longer just a rumour. https://www.gamespot.com/articles/activision-blizzard-confirms-layoffs/1100-6464969/ for more info.

    In retrospect this post could have been better timed — but I hope to make clear, if it wasn’t already, that the developers and indeed much of the company will *NOT* be the ones at fault for the decisions we may not like.

    It sounds like the layoffs will most impact the duplication of services that Activision Blizzard has in PR, marketing, distribution and similar roles. But it isn’t their fault either.

    So while I think it is perfectly valid to criticise Activision Blizzard’s business approach of late, and make it heard loud and clear that we don’t necessarily approve of red-dot MTX, let’s also try to show a bit of empathy for those impacted by this decision and ensure we’re not making any comments placing blame in the wrong places.

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