Are Micro-Transactions And Loot Boxes Just Corporate Greed?

Stuart McLean writes about the possible reasoning behind microtransactions and loot boxes in video games.  It couldn’t just be greed…could it?

It seems everybody and their dog has an opinion on micro-transactions, loot boxes, in-app purchases – call them what you will. So, here’s mine: they suck, they’re evil, the bleed us dry and create an unfair advantage for the more well-heeled players.  They need to be stopped!  Thank you and good-night.

What?  That’s not enough?  Okay, have it your way, I’ll waffle on for a bit longer.

THE BUSINESS OF MONEY

There’s a fundamental part of games companies, that as consumers we like to conveniently gloss over from time to time. They are businesses, plain and simple. As much as I hate to say this, it practically sticks in my throat, they have an obligation to their shareholders to screw us for every last penny they can. So they will try and find creative ways to do that as often as they can.

I know, it’s all too easy to forget about some aspects, but it’s a really expensive business making big-budget AAA games. It doesn’t start and stop with the developers. They may, arguably,  be the most hard-working, most creative side of the equation. But there’s the PR, which can steamroll into the hundreds of millions of dollars ballpark quite easily.

Then there are all of the suits. The people at the publishing houses we never get to hear about, the support staff, everyone and everything all the way down to the lovely ladies (or gentlemen) in the canteen. Aside from the pure development costs, everyone in the company has a wage to be paid every month of every year.

NOT EVERYTHING GOES TO PLAN

Then you have to account for games that may unexpectedly bomb. If you’ve sunk millions into a lengthy game development process and it doesn’t pay off as expected you need to know you can handle that loss.

You need to be as sure as you can that there’s enough in the coffers to offset the losses involved with that product. If a game doesn’t perform as expected, the costs associated with it don’t magically vanish. Worst of all, you still have to continue developing and supporting the game for those customers who did buy it. Not to mention to try and improve on it to further drive sales.

Through every single step of this, you’ve got the investors nipping at your heels. Pushing you to make bigger and bigger profits, primarily to line their pockets, well why not we all would if we could. But the future success of the company has to be ensured, it’s where their money comes from after all.

THE AGE OLD TRADITION

Lying at the heart of all of these issues were currently facing is the fact that, for many investors and executives, the good old-fashioned method of delivering a game as a product just doesn’t cut it anymore.

For decades we’ve enjoyed the simplicity of a company making a game, selling a game and that being the end of it. With maybe the exception of selling expansions in more recent years, but were fine with that because we generally get our money’s worth.

But the executives will point out, perhaps not entirely without merit, that this classic model is fundamentally flawed, from a business perspective. With the costs involved in making AAA games skyrocketing, the barrier of entry is climbing higher and higher. That by itself creates two problems.

For a start, it means spending more and more on advertising and promotion to convince a customer to take a chance on dropping 60 bucks on a game. Usually sight-unseen, it can be a pretty big ask in a crowded marketplace.

Secondly and the one we tend to contest more, selling games in this manner creates a cap, or spending limit if you like. There’s only so much money each gamer will spend on an expansion for a game. Some aren’t going to buy them at all and those who do? Well, they’re only ever going to buy it once. That’s a real problem for the investors who want increasing returns on rising outlay.

THE LOGICAL SOLUTION

For your average investor and executive, the solution to these problems, as much as we may not like it, seems to be moving towards the “games as a service” business model. I should be clear here, though it may not sound it, I’m not really in favour of what some of these companies are doing to us. Far from it, but I like to try and remain impartial and see both sides of the coin if I can.

Games as a service, for investors, solves their biggest issues with games development. It can lower the barrier to entry to as low a zero, as we see in “freemium” games. Theoretically expanding the audience exponentially, after all, its free – why wouldn’t gamers just try it out?

I say theoretically there because, while certainly there are some around. How many of the big AAA publishers do you see doing it? Not many, simply because they want all of the cash from both sides of the equation. Charging us the full price for the game in the first place, then gouging as much money as they can out of us after the fact.

You can blame mobile games as the originators of these practices, it’s easy and convenient to do so. But really, micro-transactions started out on PC and Xbox Live more than a decade ago, before the whole free-to-play craze on mobiles. The infamous horse armour pack in Oblivion anyone?

HOW NOT TO DO IT  

Ultimately then we end up where we are today, in a situation where the established publishers are putting out their big-budget AAA online games with all of the built-in optional extras you could imagine. Is it wrong for them to do so? Of course, it’s not, they have business to run and shareholders to keep happy. It’s not easy for them and as much as we’d like to say it’s so, it’s not really greed. It’s just business.

But the crux of it is, as far as I’m concerned, they just aren’t doing it right a lot of the time. Particularly when you end up creating a system that favours those with more cash at their disposal. That then turns a game from an enjoyable, fair experience, into a “pay to win” product and that’s not good for any of us. I certainly don’t think it’s the right way forward.

WHERE TO FROM HERE?

So what do we do? Or more to the point, what do the publishers do? I think there’s plenty of scope in games to offer additional purchases that don’t make it unfair on other players. Sure, if you want to offer a short-cut power-up or more powerful arsenal, whatever it may be that’s ok. Just make sure it’s not impossible, or so damned boring and lengthy that we cant be bothered, to obtain these items through natural organic methods.

Better yet sell us things which don’t give people an unfair advantage. It’s been shown time and time again just how willing players are to spend money on what are little more than cosmetic items. Or create your online games to accommodate for players who have purchased items to boost their abilities early. Maybe when the matchmaking is taking place, you don’t allow these more advanced players to be in the same matches as considerably less fortunate players?

Are these the solutions? Probably not, I’m just a guy riffing. However, there must be an acceptable middle-ground. One that is both fair to players and which keeps the vulture’s shareholders happy. Because like them or not, these additional in-game expenses aren’t going anywhere. Particularly with big-budget AAA online games, they’re just too expensive a proposition for publishers to not want them to be games as a service.