News Microtransactions and the Future of the Gaming Industry

ClunyTheScourge Dec 4, 2017

  1. ClunyTheScourge

    XPG Administrator

    Nov 21, 2017
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    'Loot boxes', 'microtransactions', 'free-to-play'....


    The terminology of video game purchases has become more complex as the Internet and online gaming gained prominence. You may have heard some of these words before, or perhaps even played a 'freemium' game that limited some aspects of itself behind a paywall. So what are microtransactions? Can they be useful to small video game companies trying to get their foot through the door of the market? Or are they simply a mechanism through which large multi-national corporations can squeeze more money out of their customers?

    Put simply, microtransactions ("MTX") are in-game purchases of often aesthetic but, as we'll see further, sometimes gameplay-affecting add-ons. MTX are a staple of so-called 'free-to-play', or 'freemium', games, i.e. the kind that is free to install but becomes substantially easier or more diverse if you spend real money on it. The concept began a decade or so ago, when online gaming was expanding beyond just obscure MMORPGs and real-time strategy games. China played a huge part in the growth of MTX, as most people could not afford a high-end desktop at home and played online games that only required login details at Internet cafés. Piracy also largely contributed, leading games companies to release their products for free to sideline the pirates and subsequently adding in-game gear and other add-on purchases.

    Before long, many Western games embraced the concept, starting with the now-infamous 'armoured horse' downloadable content for Bethesda's Oblivion ('DLC'). EA Games, unsurprisingly, was the company that substantially expanded the concept and introduced loot boxes: random-number-generated reward packs that contained new skins, maps, weapons, and gear. Since then, most video game behemoths, like Blizzard Entertainment, have also incorporated the model. Blizzard started off with World of Warcraft pets and mounts, but moved on to weapon- and gear-reskinning with its 'transmogrification' feature. However, it is important to note that every real-money purchase in WoW was and still is purely aesthetic: nobody receives a gameplay advantage for buying one of the e-Shop's items. The company implemented the same model in Overwatch, their latest game, again ensuring nobody could 'pay-to-win'.

    This brings me to the recent furore surrounding one of EA's latest and most eagerly anticipated video game titles: Star Wars Battlefront II. When an EA representative went on Reddit to explain the reasoning behind having locked heroes and loot boxes purchasable with real money, the comment became the most downvoted in the website's history, the company's stock plummeted by 8.5%, and outrage over what was perceived as a brazen cash-grab spread like wildfire. EA promptly made its pay-to-win loot boxes unavailable, but two weeks later announced that microtransactions would return in the game 'at a later date'. Perhaps the company thought that all the damage that could be done was already done. That remains to be seen, but they're probably wrong.

    Any move towards MTX from major games companies that seems money-grubbing, particularly if it affects players' in-game abilities and strengths, will be met with almost-universal ridicule and disdain. Besides the financial argument, critics have railed against MTX content by arguing that, most importantly, it makes the game deeply unfair. Anyone can improve their video game characters by investing time and energy. If somebody can cough up some ash for that one-shot alien rifle for which you've been sweating for weeks, why should you put any effort in improving your avatar the old-fashioned way?

    It also has an impact on the communal feel of online games: in MMOs, people would band together to defeat a particularly challenging boss and receive its above-par loot. Opening what is essentially a roulette box of rewards removes this sense of working together towards a common goal. MTX also takes away the special sense of achievement out of receiving a reward for something that you, on your own, have accomplished. The harshest MTX critics have even suggested that microtransactions are the video game equivalent of gambling. They say it is toxic to expose an audience that comprises mostly of minors and teenagers to the pay-to-win mentality.

    There are many arguments against in-game purchases, but most are due to the model's terrible implementation by a number of games companies. Where microtransactions could truly shine is with nascent and indie companies. The Internet may have made it easier to expose your product to the world, but it certainly hasn't improved the chances that people will actually spend money on it. In fact, due to the web still having a laissez-faire attitude towards copyright, people have become quite used to getting stuff for free.

    The MTX model, to throw back to its beginnings in China, means that a blooming, small video game company can put their game out there free of charge in order to entice gamers into at least giving it the time for a trial run. If even a part of those gamers keep the game, and out of those a fraction spends money on microtransactions, that's still a net gain compared to someone who would never spend full-price money on an unknown title.

    Of course, it goes without saying that even smaller companies should be wary of EA's blunders: pay-to-win MTX will always be reviled due to its inherent lack of fairness. The only viable path for a small company would be implementing purchasable loot that is purely aesthetic, like skins and hats (shout-out to Team Fortress 2!) or, at worst, DLC that expands the game's story. However, it should definitely not lock players out of the game's actual ending!

    Microtransactions are, nonetheless, a difficult topic on which to take a solid stance. As the Battlefront II outcry has shown, the business model is still evolving and on precarious ground. The direction it will take will depend both on the lessons larger companies learn from EA's blunder, but also how smaller developers appropriate and revolutionise that same business model. One thing's for certain, though: pay-to-win should be forever buried, next to 3D films and Betamax.

    -ClunyTheScourge- Content Contributer

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