Video Games Attack of the Microtransaction Let’s get on the same page.
Microtransaction: Purchase of virtual content in a video game using real money.
Loot Box: A random assortment of in game items, often offered for purchase through microtransactions.
AAA Game: A big budget game, similar to blockbuster movies in both production cost and hype. The Issue The Debate
GAME INDUSTRY GAMERS
- Costs of game development have - The game market has also skyrocketed increased, so sales volumes are - Unit price of games is constant higher or even declining due to - Game design fundamentally inflation changes, negatively impacting player experience - Illegal/underage gambling The Game Industry Economics
1 Williams, Dimitri. “Structure and Competition in the U.S. Home Video Game Industry.” The International Journal on Media Management, vol. 4, no. 1, 2002, pp. 43., doi:10.1080/14241270209389979. 2 Packwood, Lewis. “Microtransactions and Loot Boxes in Video Games - Are They Pure Greed or a Modern Necessity?” Gamesradar, 20 Dec. 2017, www.gamesradar.com/microtransactions-and-loot-boxes-in-video-games-are-they-pure-greed-or-a-modern-necessit y/. $18 B
The game industry now.3 4 Data From: “How Much Does It Cost To Make A Big Video Game?” Kotaku, Kotaku.com, 15 Jan. 2014, kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649. 5 Orland, Kyle, and Jonathan Gitlin. “Why Retail Console Games Have Never Been Cheaper, Historically.” Ars Technica, WIRED Media Group, 30 June 2013, arstechnica.com/gaming/2013/06/why-retail-console-games-have-never-been-cheaper-historically/ 4% of games that enter production make a significant profit.6 Microtransactions
Take-Two (2K & Rockstar): 42% of revenue from microtransactions (mid 2017)8
Ubisoft: 51% of digital revenue from microtransactions (mid 2017)9 Monetization Tactics Changes to fundamental game design
● Layering 7 ● Dynamic Difficulty 8 ● Pain Relief 7 Loot Boxes and Gambling ● MN State Statutes 10 ● Rep. Chris Lee, HI 11 ● Washington State 12 ● Belgium Gaming Commission 13 What do developers have to say?14
“...I actually think games should cost less” - EA dev
“The trouble...is the real risk that the game design fundamentally changes” - veteran game producer
“MTX will fail if it *doesn’t feel good to spend*.” - Game Designer Damion Schubert End Game (conclusions) Utility
Benefits: Harms:
- Game prices remain low - Some gamers will spend vastly more money than they otherwise - Development of more ambitious would games is possible - Exposure of children to - Shareholders make money addictive, gambling mechanisms - A game with microtransactions is not the same game as it would be without them Solutions
● Speak with our wallets 14 ● Self-regulation (i.e. ESRB) 11 ● Government regulation The Future References 1. Williams, Dimitri. “Structure and Competition in the U.S. Home Video Game Industry.” The International Journal on Media Management, vol. 4, no. 1, 2002, pp. 43., doi:10.1080/14241270209389979. 2. Packwood, Lewis. “Microtransactions and Loot Boxes in Video Games - Are They Pure Greed or a Modern Necessity?” Gamesradar, 20 Dec. 2017, www.gamesradar.com/microtransactions-and-loot-boxes-in-video-games-are-they-pure-greed-or-a-modern-necessity/. 3. “Video Game Industry - Statistics & Facts.” Statista, 2017, www.statista.com/topics/868/video-games/. 4. “How Much Does It Cost To Make A Big Video Game?” Kotaku, Kotaku.com, 15 Jan. 2014, kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649. 5. Orland, Kyle, and Jonathan Gitlin. “Why Retail Console Games Have Never Been Cheaper, Historically.” Ars Technica, WIRED Media Group, 30 June 2013, arstechnica.com/gaming/2013/06/why-retail-console-games-have-never-been-cheaper-historically/ 6. Irwin, Mary Jane. “Cooking Up A Blockbuster Game.” Forbes, Forbes Magazine, 13 July 2012, www.forbes.com/2008/11/21/games-eedar-developers-tech-ebiz-cx_mji_1121eedar.html?partner=yahootix#6f610bd61f00. 7. Shokrizade, Ramin. “The Top F2P Monetization Tricks.” Gamasutra, 26 June 2013, www.gamasutra.com/blogs/RaminShokrizade/20130626/194933/The_Top_F2P_Monetization_Tricks.php. 8. Fulton, Will. “Do Players Really like Loot Boxes, or Are Game Publishers Forcing Them on Us?” Digital Trends, Designtechnica Corporation, 16 Nov. 2017, www.digitaltrends.com/gaming/do-players-like-loot-boxes/. 9. McAloon, Alissa. “Ubisoft's 'Player Recurring Investment' Revenues Outpace Digital Game Sales.” Gamasutra Article, 7 Nov. 2017, www.gamasutra.com/view/news/309155/For_the_first_time_Ubisofts_microtransactions_outearned_digital_game_sales.php. 10. “2017 Minnesota Statutes.” 609.75 - 2017 Minnesota Statutes, State of Minnesota Revisor of Statutes, 2017, www.revisor.mn.gov/statutes/?id=609.75#stat.609.75.4. 11. Orland, Kyle. “Meet the Legislator Trying to Do Something about Video Game Loot Boxes.” Ars Technica, 16 Dec. 2017, arstechnica.com/gaming/2017/12/meet-the-legislator-trying-to-do-something-about-video-game-loot-boxes/. 12. Orland, Kyle. “The Legislative Fight over Loot Boxes Expands to Washington State.” Ars Technica, 25 Jan. 2018, arstechnica.com/gaming/2018/01/the-legislative-fight-over-loot-boxes-expands-to-washington-state/. 13. Chalk, Andy. “Belgium's Justice Minister Calls for Loot Box Ban in Europe (Updated).” Pcgamer, PC Gamer THE GLOBAL AUTHORITY ON PC GAMES, 22 Nov. 2017, www.pcgamer.com/belgium-says-loot-boxes-are-gambling-wants-them-banned-in-europe/. 14. Fenlon, Wes. “The Case for and against Loot Boxes, According to Developers.” Pcgamer, PC Gamer THE GLOBAL AUTHORITY ON PC GAMES, 22 Nov. 2017, www.pcgamer.com/the-case-for-and-against-loot-boxes-according-to-developers/. 15. Prell, Sam. “After Heavy Criticism, Star War Battlefront 2 Lootboxes Go Cosmetic Only - but Is It Too Little Too Late?” Gamesradar, GamesRadar+, 16 Mar. 2018, www.gamesradar.com/after-heavy-criticism-star-war-battlefront-2-lootboxes-go-cosmetic-only-but-is-it-too-little-too-late/.