Microtransactions: the Future of Games? (LootBoxes and Gambling)

[dobwal]

People crying about loot boxes when GTA online in my opinion is the worse offender of microtransactions. Shark cards can go for up to $175 which buys you up to $8 million in GTA currency. You can burn through $8 million with a handful of vehicle purchases.

Never mind that full access to some of the meatier content updates is gated behind high priced bases and warehouses. A casual player in GTA online would have a hard time accessing top level content outside of being someone else's lackey.

Devs don't need loot boxes to take advantage of some players' unhealthy addiction to games.

 

[Malo]

People crying about loot boxes when GTA online in my opinion is the worse offender of microtransactions.

You're buying ingame currency to buy whatever you want in the game, choosing your purchases. And it's for people who want the high end cars and apartments etc but can't be bothered playing the actual game to earn the money. The high priced bases and the associated content is there to cater to long term players that have earned a lot and provide content to them. It's the equivalent of their MMO "end game" content. That's very different than your actual levelling progression being tied to loot boxes that have highly randomized content, duplicates etc. with items that heavily sway your capabilities in the game. They're not really comparable.

edit: speling

 

[CSI PC]

Another example from EA showing how they are making recurring cost/microtransactions integral to the core game; UFC3 with level of integration worst than Battlefront 2.
https://www.astutegaming.com/single-post/EASPORTSUFC3BETA

I think some may not appreciate that this is the worrying trend; how they are developing games with such financial structures being core to gameplay mechanics in terms of progression and abilities, ala Battlefront2 and Shadow of War/more recent FIFA-MADDEN-etc.
The situation made worst when it also implements random loot boxes to the progression influencing financial incentives even more.

 

[Malo]

After they made >$800m or something with FIFA player microtransactions, similar amounts in Madden, they want to duplicate that to every game they make so they can become even filthier rich. Or did Ultimate Team for FIFA cost them 750m to make? Games are expensive!

 

[iroboto]

After they made >$800m or something with FIFA player microtransactions, similar amounts in Madden, they want to duplicate that to every game they make so they can become even filthier rich. Or did Ultimate Team for FIFA cost them 750m to make? Games are expensive!

licensing is probably not cheap, and the game development cost is probably not much more than 25-50 million max.

But that doesn't mean you don't owe royalties on the DLC. If you are selling 'players', there could be kick backs to FIFA for each MT sold. I'm almost guessing there is. You'd be a fool to licensing FIFA out for 10 million, and watch EA make 800 million from MT. Like hell FIFA would be played a fool.

If I were an IP owner, I would not be licensing out of my IP if I don't benefit from revenue from the MT. That would just be terrible contract writing on my behalf. I most surely will attempt to get profit from MT as well. I would likely fight for a larger portion of it honestly.

That's why the EA/Disney thing is interesting

 

[Shifty Geezer]

After they made >$800m or something with FIFA player microtransactions, similar amounts in Madden, they want to duplicate that to every game they make so they can become even filthier rich. Or did Ultimate Team for FIFA cost them 750m to make? Games are expensive!

That's screwing up the argument. The "games are expensive to make" point isn't an argument in favour of shitty monetising game mechanics. It's separating truth from random internet-logic founded on nothing but ill thinking and arm-chair analysis from people who have no idea what they're talking about.

There are two points here that shouldn't be muddled.
1) Are games more expensive to make?
2) Are these IGC fuelled games justified?

1 == true
2 == false (though technically legitimate in a free market)

Presence of crappy MT game mechanics doesn't mean 1 isn't true. And games being more expensive to make doesn't necessitate crappy MT mechanics.

 

[Cyan]

Yes, but after you reach the level 20 cap (which you can actually reach within 4-5 hours), the XP only counts for something called bright engrams.

Engrams are Destiny's version of in-game slot machines. There are 3 types of engrams: bright, legendary and exotic.


- "Legendary Engrams" are something you usually pick up randomly throughout missions and events, and then you have to take it to a slot-machine guy who will trade it for a legendary weapon or armor at the engram's pre-determined level. This level is usually some 5-10 levels below your "light level". (light level a weighted average of the level of your weapons and armor that can go up to 300, it's not the "character's level" that caps at 20... a mess I know)


- "Exotic Engrams" are just like the Legendary ones, except they're a lot less common and their levels can actually come at a level way above your character's light level. Still have to be taken to slot-machine man to trade.


- "Bright Engrams" are given according to XP gained by killing enemies, completing missions, etc. Bright Engrams only bring cosmetic items, nothing else.



At the same time, you can buy "Silver" with real money. And like most of the current games with microtransactions, silver is just another currency to add to the game's ridiculous number of currencies like "glitter", "legendary shards", "bright dust", "mod parts" and "weapon parts".

But can you guess what Silver can be used for? To buy purchase Bright Engrams.
Again: bright engrams are slot machines for cosmetic items.


But in the end, what Bungie is doing by artificially making it harder to get through gameplay the only thing that you can purchase with real-money.






This is pretty shitty in the way it wasn't transparent, but IMO Battlefront 2 is a completely different beast as far as preying on little kids and gambling by suppressing regular gameplay progression to ridiculous levels, making the game an effective pay2win title.

I miss the times of Call of Juarez Map Pack, you paid for it if you wanted to, but it wasn't a game changer whether you had it or not --in fact the X360 version, which was released later, had all the maps from the get go, iirc.

 

[CSI PC]

Great article on Kotaku about a 19 year old who spent $10K over the space of 6 years (most was in the recent few years) just on microtransactions and highlights an addiction issue that became reinforced.
The problem will only become worst as AAA games fine tune the way they target recurring cost services, especially if consumers are impressionable or younger than a lot of us old fogies here
Meet the 19-Year-Old Who Spent Over £10,000 on Microtransactions: http://www.kotaku.co.uk/2017/11/29/meet-the-19-year-old-who-spent-over-10000-on-microtransactions

 

[Billy Idol]

That's screwing up the argument. The "games are expensive to make" point isn't an argument in favour of shitty monetising game mechanics. It's separating truth from random internet-logic founded on nothing but ill thinking and arm-chair analysis from people who have no idea what they're talking about.

You mean bullshit arguments like games are more expansive to make, hence developers need other ways of making money to survive...hence MT?

Yep, that is really arm chair bullshitting at its finest imo, especially with the evidence publishers themselves provide:


“On November 16, 2017, Electronic Arts Inc. (‘EA’) announced in a blog on its website at www.ea.com/news that it will turn off all in-game purchases for the Star Wars Battlefront II title until further notice,” the statement read. “This change is not expected to have a material impact on EA’s fiscal year 2018 financial guidance.”

...to be found here

http://investor.ea.com/secfiling.cfm?filingID=712515-17-95&CIK=712515


This imo clearly shows that MT is the cherry on top, instead of being necessary to break through. It shows that the premium 70 Euro price, the super duper enhanced edition 90 Euro price etc etc is easily enough to make profit.

 

[Billy Idol]

Here is one of the most interesting articles surrounding these recent AAA developments imo, especially regarding the argument about security of investment, single player AAA is dead, etc etc.

Great read from a game developer, highly recommended:

https://venturebeat.com/2017/11/22/...orld-of-warcraft-theyll-survive-pubg-too/amp/

 

[Shifty Geezer]

You mean bullshit arguments like games are more expansive to make, hence developers need other ways of making money to survive...hence MT?

Again, you are failing to separate two issues. The invention of MTs came about partly as a need to finance games (partly because they could with the progression of digital currency).

Yep, that is really arm chair bullshitting at its finest imo, especially with the evidence publishers themselves provide:

If you look back further in this thread, you'll find people arguing that games weren't even more expensive to make than they used to be. That's arm-chair bullshitting. They are more expensive to make. So issue one, cost of games, reality is they cost more. Issue two, do MT's need to be money-grubbing parasitic infections in order to fund those games? No. MTs can be handled in a way that's respectful to consumers and producers. As they were last gen - how many were up in arms over the cost of DLC expansions or optional cosmetic items?

If you can't separate your emotions from the facts, you'll be pushing for a gaming industry broken in the other direction. If you can put your emotions to one side for a second and see the big picture, you'll see there's a balance that works best for everyone and that's what we should be working towards. Sadly few people can do that, and humanity tries to achieve balance by pushing completely one way until they go too far, and then pushing too hard the other way until they end up with the first problem again.

 

[Billy Idol]

In my post, MT stands for all additional mechanisms to increase profit. That is just the first time we hear about pubs revealing their finance plans.

Look: some here argue that 70€ is not enough to pay for AAA games. None of us actually know! Thus, all of us are arm chair bs-ing.

We have here however an explicit example from the pubs themselves stating that they very well survive with the standard (premium) price tag.

They explicitly state that the additional profit stream is not necessary. It happens in this case to be MTs as the additional profit stream.

That is what I wanted to say. Lots of arguments are now to be judged agaim. Sorry that I say bullshit so often.


PS: regarding the game dev costs. I showed you arguments that a single game costs more to make, but that at the same time pubs spend less money for game development per year in total. A publisher only cares for total cost. You cannot go on and completely ignore the implications of the second statement.

Furthermore, we never discussed the massive change in distribution: more and more games are sold digital. This can have implication on the distribution costs (I don‘t know how much Sony et al take away compared to physical media costs). Way more important imo: it kills the second hand market pubs tried to fight for years...less used games sold cheap.

 

[Billy Idol]

And last but not least: yes, there are emotions involved! Of course! Gaming is my fav hobby.

And yes, I am completely against the direction the AAA industry is moving.

But you are, as explained by me many times, emotional yourself: you are extremely defensive and pro publishers without accepting that some arguments don’t compute.

I don‘t want publishers and especially game devs to be starving. On the contrary of course, I want a healthy industry. But note, too fat is also unhealthy ;-)

 

[AlNom]

As they were last gen - how many were up in arms over the cost of DLC expansions or optional cosmetic items?

halp.
¯\_(ツ)_/¯

 

[Shifty Geezer]

But you are, as explained by me many times, emotional yourself: you are extremely defensive and pro publishers without accepting that some arguments don’t compute.

I've accepted all arguments that are valid, The thing I'm emotional about, as ever, is people being fair and just and coming to sensible solutions to problems. Which also includes using clear terms to help facilitate discussion - using 'MT' to mean 'additional mechanisms to increase profit' is plain wrong. MT are small digital transactions, which can include selling content to help try to break even. IGCs (in game consumables) are the thing every who's complaining is actually complaining about.

Look: some here argue that 70€ is not enough to pay for AAA games. None of us actually know!

It doesn't work that way. When you set out to create a game, you have no idea how many units will sell. You can't budget for a perfect expenditure followed by an egalitarian break-even so gamers don't overspend and devs don't starve. You can't do "n million * $70 gives us a budget of $140 million for this game". Putting aside capitalism and greed for one minute, as a dev/pub you want to have enough money in the bank to be able to bank roll a few flops in case you get a run of flops. That makes making as much (fairly) back on the content people are willing to pay for a vital part of the industry. This means even if you reach break even on a AAA game and don't need to charge more for that game, if you can roll out some cheap additional content and get users to buy it, yo want to. And gamers had been happy with that, initially. Then it became 'day one DLC' and then 'loot boxes'. Calling MTs bad is counterproductive. Make the differential between positive and negative MTs and campaign against the bad ones.

And yes, I am completely against the direction the AAA industry is moving.

Then argue fro a position of moderation. In any argument, the moment someone is polarised, the counter-argument looks at the bits they are wrong on, instead of right.

By complaining about 'MTs' and suggesting games aren't that expensive, you generate counter arguments that not all MTs are bad and games do actually cost a lot to make. Focus solely on loot boxes etc. and you'll have no counter-arguments and instead people nodding their agreement.

 

[Billy Idol]

Without particular order :

1.) There is evidence out there that the total amount of money spend for game development is decreasing every year, while the amount of profit is going up. I posted this pages ago, it includes statistics for three big developers.

Form this, in my opinion, a legit point of view is that game development gets cheaper overall.

2.) In the same link, it is also clearly stated that the cost per game went up. Considerable. However, I argue that at the same time, the actual real game price went up about the same rate. The key word is DLC.
Let me explain, how I see it:
- Back in the day, when you bought a 20h game, there was 20h of new and unique content. The game was huge!
- Now, if developers want to make a game with 20h of unique content, the game development costs explode. The extreme density of worlds we have nowadays cause an extreme increase in asset creation.
- So how did game developers adapt? This, is of course my personal opinion: They develop the 20h game, then they split it this 20h game up in a base game of about 10h unique and novel content, the rest of the 10h are packed in 2-4 DLC, depending on the strategy. As it is difficult to sell a 10h game, when the predecessor was 20h, game developers have started to fill the 10h unique gaming content with side missions/quests/tasks/backtracking/collection/trophies/ etc etc to artificially extend the lifetime of the game to 20+ hours. Some people like these kind of time filler content, some are even obsessed with trophies and gamer score, some don't.
- So, in my opinion, if you want the actual unique 20h content you pay the base price of 70 Euros + the 40-50 Euro price for the DLCs, season pass.
- The higher development costs are compensated by low density content. Thus, I do not share the opinion that DLC has substantially improved games.
- You see that I do not believe that DLC is developed after the game launches. In the early days of DLC, we have many cases of day 1 DLC, on disk DLC where one has to download a 100kB file to unlock. After the backlash that this business practice cause, game developers learned from it and offer DLC now after some time.

This observation is of course not true for all the games out there, but applies more so the games from the big publishers like e.g. Ubisoft with its standard blue print formulae to generate a world with 100h+ "content".

An absolute exception to this is Witcher 3. This game is nowadays unique, as even the side missions and side quests feel like high quality meaningful content. That is also the reason this game got so much praise imo, as having real 50h+ unique content...is nowadays unique. So yes, in case of this game, I can see that the development costs are crazy high, I can see that they need the DLC, I can see that they can only afford this because of the cheaper conditions found in Poland.

In general, my conclusion however are that games are more expansive than ever. The 70 Euro per game price tag is a myth and is not valid for years now.

3.) You ask me about a sensible solution for the industry to move forward. But here is my issue with this question: the gaming industry is healthier than ever. This seems as if you feel that the gaming industry as a whole is in great danger and almost dead. Fact is, however in my opinion, that there is nothing to fix. Except if you are a stock holder of the publishers, than of course the standard demand is to increase the profit exponentially, every year. If you look at the statistics available: Profits are higher than ever, the increase in profits every year is substantial. We are talking about one of the most successful entertainment industries. For me, it is interesting that these statements are also true before(!) the gaming industry discovered MT and loot boxes. They were extremely successful two years ago, they were healthy with big profits. MTs and loot boxes are not necessary for the survival of the industry. The link I posted about EA explicitly stating exactly this in case of BF2 is a statement directly from the publishers about this: EA says they do not necessarily need MTs for the finance plan.

4.) Imo it is always a sign of an industry being overly successful and unhealthy "fat", when profitable parts are sold and closed...as they are not profitable enough(!). This happens nowadays in the gaming industry: game devs are shut down, when they "do not meet expectations". When it is not sufficient to be profitable, but over-profit is expected...this industry is not in great danger and almost dead imo. Hence, I think that people using the facts that game studios get closed in a wrong way.

 

[Billy Idol]

Interesting part in the interview of the Witcher 3 dev CEO:

What will be the cost of the game?

From the beginning we assumed that it was significantly bigger than "The Witcher 3", whose budget amounted to just over PLN 300 million. Approximately half of them were marketing expenditures, most of which were not seen as costs but reduced revenues from distributors. Direct costs of production exceeded PLN 90 million. "Cyberpunk 2077" will be more expensive, but also more ambitious and, as we believe, will have significantly greater sales potential.

From resetera, from this google translate link:

https://translate.google.cz/transla...rpunk-liczy-kamienie-milowe-898363&edit-text=
https://www.pb.pl/cyberpunk-liczy-kamienie-milowe-898363

Adam Kicinski

 

[iroboto]

Without particular order :

1.) There is evidence out there that the total amount of money spend for game development is decreasing every year, while the amount of profit is going up. I posted this pages ago, it includes statistics for three big developers.

Form this, in my opinion, a legit point of view is that game development gets cheaper overall.

Development for doing the same type of work is cheaper, I guess. This is just a product of better tools and the investment to make those tools spanned over years.
But the result is that games have more detail, more fidelity, more of everything, so those savings went away. It's like buying power saving light bulbs, filling your house with them and leaving the lights 24/7 because its cheaper to run than 60W. Your electricity bill will still be higher, despite the fact that per bulb is less on energy. It's about the total investment, and there are lots.

2.) In the same link, it is also clearly stated that the cost per game went up. Considerable. However, I argue that at the same time, the actual real game price went up about the same rate. The key word is DLC.

So this is a symptom of developers not being allowed to charge higher than a certain price point otherwise the market won't accept it.
They take a risk by splitting the content up, and charging DLC. This isn't guaranteed profit since many users can decide to refuse to buy the DLC. I doubt the success rate is anywhere close to 90%.

An absolute exception to this is Witcher 3. This game is nowadays unique, as even the side missions and side quests feel like high quality meaningful content. That is also the reason this game got so much praise imo, as having real 50h+ unique content...is nowadays unique. So yes, in case of this game, I can see that the development costs are crazy high, I can see that they need the DLC, I can see that they can only afford this because of the cheaper conditions found in Poland.

Yea heh not just cheaper conditions, but they can charge US prices with US currency, that leads to massive profits especially if you do the conversion.

3.) You ask me about a sensible solution for the industry to move forward. But here is my issue with this question: the gaming industry is healthier than ever. This seems as if you feel that the gaming industry as a whole is in great danger and almost dead. Fact is, however in my opinion, that there is nothing to fix. Except if you are a stock holder of the publishers, than of course the standard demand is to increase the profit exponentially, every year. If you look at the statistics available: Profits are higher than ever, the increase in profits every year is substantial. We are talking about one of the most successful entertainment industries. For me, it is interesting that these statements are also true before(!) the gaming industry discovered MT and loot boxes. They were extremely successful two years ago, they were healthy with big profits. MTs and loot boxes are not necessary for the survival of the industry. The link I posted about EA explicitly stating exactly this in case of BF2 is a statement directly from the publishers about this: EA says they do not necessarily need MTs for the finance plan.

Its certainly growing as an industry, as least from a revenue POV. I don't think Shifty is implying it's going to die, but the rate increase of costs to develop a game, with higher expectations, and still being limited by the same price point, makes a special case to be concerned about a AAA developer bubble pop. If we remove the other channels of revenue from these expensive AAA games, you're likely going to die. Competition is so fierce now a days. There's no such thing as as system seller, it's impossible to corner the market like they did in the past.

The thing with a growing industry is that the industry also matures. Workers don't want to grind crunch time 24/7. They want their holidays, they want to see their families, they want to do more than work and die, people want to know that they have a stable job, and they want to have things like insurance and health benefits. As the industry matures, it takes on more overhead much like the enterprise market. That's why profits are important, these large AAA studios aren't startups anymore, and they're going to incur significantly more costs to keep their labour force happy.

4.) Imo it is always a sign of an industry being overly successful and unhealthy "fat", when profitable parts are sold and closed...as they are not profitable enough(!). This happens nowadays in the gaming industry: game devs are shut down, when they "do not meet expectations". When it is not sufficient to be profitable, but over-profit is expected...this industry is not in great danger and almost dead imo. Hence, I think that people using the facts that game studios get closed in a wrong way.

Games are expensive and few studios can afford to spend tons of money on developing a game and absorb the cost of a flop.

 

[Shifty Geezer]

Without particular order :

Form this, in my opinion, a legit point of view is that game development gets cheaper overall.

We had that discussion. Development isn't cheaper - pubs are just spending less. You go on to say as much yourself in your other points.

2.) In the same link, it is also clearly stated that the cost per game went up. Considerable. However, I argue that at the same time, the actual real game price went up about the same rate. The key word is DLC.
Let me explain, how I see it:
- You see that I do not believe that DLC is developed after the game launches. In the early days of DLC, we have many cases of day 1 DLC, on disk DLC where one has to download a 100kB file to unlock. After the backlash that this business practice cause, game developers learned from it and offer DLC now after some time.

Firstly, the earliest days of DLC didn't have day 1 DLC. Originally it was additional content created after the fact. Then devs/pubs came to realise they could rely on DLc sales and factored it into the initial development plan as part of the financial strategy. I argue against that games are now adding filler to push valid content into DLC. Games have always had filler. RPGs since the earliest days have had fetch quests.

Secondly, you acknowledge the cost of the games has exploded in making this 20h game. So how are the devs supposed to pay for the creation of that content if not via selling DLC? Charge $90 up front? You're absolutely right that DLC is factored into the game's financial strategy from the outset, but it's been necessary for many years for exactly the reasons you state - the costs of making the games people want exceeds the $60 they are willing to spend on an initial purchase.

3.) You ask me about a sensible solution for the industry to move forward. But here is my issue with this question: the gaming industry is healthier than ever. This seems as if you feel that the gaming industry as a whole is in great danger and almost dead.

Where have I suggested it's in peril? I think the only concerns I've voiced are if your opinions, dves make plenty enough money and MTs are just greed, were the ones to shape the industry, then it would be in peril. Although I'm not in favour of a move towards loot-boxes which is problematic.

Fact is, however in my opinion, that there is nothing to fix.

Yes there is! You want the abuse of MTs to end and for content to reflect what people are being asked to pay! And prior to that, devs needed a way to make more money than just the initial <= $60 asking price. So now there's a problem in how to fairly fund devs without robbing them of their extended income.

For me, it is interesting that these statements are also true before(!) the gaming industry discovered MT and loot boxes. They were extremely successful two years ago, they were healthy with big profits.

You're looking at a very small part of it. Look at the industry over its whole evolution, with the rise and fall of publishers, the closing of old, noble developers, and the mass of indies appearing in their wake. And please don't make loot-boxes part of the argument about the need for MTs. Loot boxes are exploiting the opportunity, and add massively to profits. That's a different thing to the requirement to MTs.

MTs and loot boxes are not necessary for the survival of the industry.

I literally have no idea what you are saying here because I don't know what definition of MT's you're using. Are you saying all DLC is unnecessary and gamers should only ever pay $70 or less (games get discounted) and that's all any dev can ask for?

I can't see how you're comfortable with your logic above. AFAICS the points above state that:

• Games cost more to make than they used to for each hour of content.
• Game price has increased because of DLC, to pay for this content.
• If you were to do away with DLC, there wouldn't be enough money to pay for this content, but you want to do away with DLC anyway.

I would have thought that your logic would have gone like this:

• Games cost more to make than they used to for each hour of content.
• Game price has increased because of DLC, to pay for this content.
• Publishers have found they can exploit MTs via loot boxes and are making more profits than ever which they aren't investing in their games.
• Publishers and developers should go back to just selling DLC and using extended, optional purchases.

 

[CSI PC]

Do not forget the big games sell more than the standard game, they have delux and gold versions that can be 33% more to 100% higher in price.
TBH this is what also helps to offset the standard 60$ price point, which can be seen with how EA admits disabling the recurring cost services in Battlefront 2 is not goint to have a material impact on their 2018 finances.
Then as mentioned we also have the trend how DLC and content has been transforming over the last few years apart from a few exceptions, but yeah enough has been mentioned in this thread to show costs have increased over the years and the larger a studio is the more cumbersome it is to be lean and effective in an ever increasing complex R&D landscape with publisher lead times/milestones that seem to be rather unrealistic.

But lets be honest what is looking to be pushed now is not about covering costs/risks but about maximising revenue even if it is seen as exploitative, look back at the chart I provided awhile back showing the revenue EA has from recurring costs vs revenue of games sold; the difference is astronomical.

I think most of us can agree there can be a balance that would be acceptable to all, but the trend suggests it will continue to push further and further against that with the precedents being set by some publishers and studios.