Maybe We’re Looking at Microtransactions All Wrong (Op-Ed)

As a life long gamer, I’ve been a part of the movement that has wanted to see video games recognized as true entertainment media on par with movies and music. I’ve spent more than my fair share of time in heated debates and admittedly sometimes arguments over the validity of the art form as it pertains to the mainstream and where its place lies in regards to awards like the Tony’s, Oscars and Emmy’s.

Screenshot-2017-11-26 About - The Game Awards
The 2017 Game Awards are coming December 7th

Over these last couple of decades, I’ve seen video games grow exponentially both as an art form and as a business. So much so that the business growth now makes me wonder if it’s current state warrants re-examining some of my own thoughts when comparing the parallels between video games, movies and music.

Part of this revelation comes from the current debate over microtransactions and loot boxes in video games. For those unfamiliar with the terms, microtransactions are purchases made in-game usually in the $1-$10 range but can sometimes be as high as the not-so-micro $100-$150 range. These purchases are generally for something cosmetic like a new outfit or skins for a game character but can also be for new, more powerful weapons, vehicles or even experience bonuses that allow you progress faster than normal.

Not so recently (but seemingly a new point of contention in the console space) microtransactions have come to include loot boxes which can have any of the previously mentioned items inside but are more or less blind purchases because the contents are many times unknown prior to purchase. Think of them like buying a pack of collectable cards. There is a small percentage chance of receiving something rare and a much higher percentage chance of getting a duplicate that you don’t really want or need. Many are complaining about the appearance of these transactions in video games period, but especially in single player games and after having to purchase those games at the full $60 price point.

When was the last time you can remember a movie being so bad that it never even got released to home video?

Speaking of which, video games have largely stayed at the $60 price point for over a decade. Starting with the release of the Xbox 360 in 2006 and continuing to now. However, based on the way costs have risen within video game production, that pricing model is antiquated and games should be much more expensive. Or should they?  When compared to other disc based mediums like CD, DVD, Blu-Ray etc., that line of thought may seem a bit backwards because all of the aforementioned pieces of hardware have come down in price over time. At least until replaced with a better medium or until digital took over, where pricing has remained static even longer (another conversation all together). Comparatively speaking, the cost associated with producing an album or movie before it ever gets to one of those home consumer formats hasn’t grown by the same leaps as game production, but those mediums have additional revenue driving streams that exist before, after or next to them allowing for long term financial planning to recoup losses that may be had by the companies producing them. A movie is most often produced with theater sales in mind as the main way to recoup production costs,  followed by release to home video, then cable networks and streaming services and finally network TV, subsidized by advertising in the end. When was the last time you can remember a movie being so bad that it never even got released to home video? It doesn’t happen. That’s all part of the original budget plan. Traditionally, games don’t have a long tailed revenue plan that could potentially last for years built in to them. But they sort of do now. Games as a service,  DLC, and microtransactions are the way most developers and publishers can not only offset the high cost of game development up front but the cost of sustaining servers and adding newly created content.

 

As the world’s largest and most lucrative form of entertainment, the expectations are quite high from the fan base and costs of developing to meet these expectations have had to grow in tandem. Gaming is much bigger than movies and music and has been for years. As an example, the most recent release of Call of Duty: WWII from Activision made $500 million in its opening three days. That’s more than Warner Bros’ Wonder Woman and Disney’s Thor: Ragnarok’s opening weekends combined at $200 and $152 million respectively. No wonder companies are looking for ways to lengthen the cash grab when typically video games have been one and done purchases and the cost of producing those games can be higher than many big budget films.

 

Now, I’ve read many a complaint about microtransactions and considered the pros and cons across some very valid points. Ones that include addiction, gambling and pay to win issues as well as ones that contend that most of the time these loot boxes or the transactions themselves aren’t forced on anyone. Either way, I think that part of the solution lies in changing the way we rationalize the purchase of our beloved medium.

I think we may have to pull ourselves away from the idea of video game purchases being the same as buying a DVD or a CD.

I think we may have to pull ourselves away from the idea of video game purchases being the same as buying a DVD or a CD. It’s an interactive medium and has grown to reflect that. Purchasing a game is more like buying a ticket to a movie theater or a ticket to a theme park. It may cost a set amount to go to a movie but you still have to buy concessions. You may pay 60-65 bucks to get into a Six Flags, you may even have a season pass but you still have to pay to play games in the park that give you a chance at prizes… Sound familiar? You don’t have to play those games at all. Even as the kid with the microphone taunts and pressures you, swearing that she can guess your age, asking “Don’t you want to win a prize for your daughter?”, you can still just ignore her all together. But why aren’t those games free when you already paid for admission?? For the same reason that Tess Everess asks you to come buy shaders from her booth in Destiny 2. If you are afraid to ride roller coasters or don’t like rides that spin, the price of entry doesn’t go down. Just like there’s no price cut for individuals who choose not to participate in Call of Duty multiplayer or the Crucible in Destiny. It’s there if you want to jump in but choosing not to is up to you.  The business of “experiencial” entertainment has always been grounded in getting you to spend more money beyond the original barrier of entry.

Destiny 2 11_26_2017 1_43_47 AM
Tess Everis wants to sell you something for REAL money at her kiosk in Destiny 2

There is next to no profit in movie ticket sales. There hasn’t been for years. That’s why concessions are so important to them and partially why they are so expensive. There’s a need to keep the barrier of entry relatively low. That way people still pay for entry and may just buy some popcorn. When you go to a major concert venue there are stands selling T-shirts and even programs to an event you’ve already paid to attend. Both items designed to allow the purchaser to simply show and prove that they attended. Making additional purchases tied to experiential entertainment has been par for the course for as long as I can remember and certainly longer than video games have been around.

 

Maybe it’s time to consider Injustice 2 the concert event of the summer that costs $60 to enter and the additional characters as $100 VIP seating or backstage passes. The barrier of entry is the same for everyone and those that WANT a deeper experience can pay for it. This isn’t to say that companies aren’t robbing us of some experiences in order to push microtransatcions (I’m looking at you, Bungie!) or that we should simply lay down and accept these practices without question. It’s more of a way to shift our focus when looking at how a decades old business needs to change in order to continue to exist and our view needs to change with it. I personally feel better about this changing landscape that I love so much when looking at it from this perspective. It helps to make some sense of it all and that makes it just a little less infuriating.

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