Microtransactions: the disease or the symptom?

Wednesday, 3 April 2013 11:10 GMT By Brenna Hillier

Buying a triple-A game is now a slow drip-feed of your cash into publisher coffers. Brenna worries there may be greater concerns than anti-consumer fleecing.

Consumer disenchantment with the industry may not be the problem here, though – just the symptom of something far worse.

I don’t know how to feel about microtransaction DLC. I think the Hello Kitty and bacon guns in Black Ops 2 are great – a harmless bit of fun with a definite “take it or leave it” vibe. I’m grossed out by Gears of War: Judgment’s double XP, particularly in light of Kotaku‘s argument that multiplayer progression brainwashes us into spending. I have mixed feelings about Mass Effect 3′s booster packs, which can be earned or purchased, and are entirely randomised.

Mainly, my issue is that I don’t particularly enjoy parting with money. Who does? Microtransaction DLC – like heftier DLC expansions, online passes, premium services like Call of Duty Elite and Season passes – is designed, explicitly, to provide an alternate revenue stream on top of what the publisher, developer and retailer will earn from your purchase of a game.

Jim Sterling is one of just a number of vocal opponents to what is, essentially, a way to try and convince you to part with cash above and beyond the core game’s cover price, something that rarely occurred in previous generations. The argument “the games industry is an industry”, as expressed by Gears of War creator Cliff Bleszinski and many others, doesn’t hold water with Jim, and really, it often feels a bit slimy to me, too. End users paying more and more for what, as the console generation wears on, feels like less and less, because investors want to line their pockets? It may be the way of the world, but it’s not consumer-friendly, and increasing awareness of wealth disparity (“the 1%”) just shows this discomfort is growing. Consumer disenchantment with the industry may not be the problem here, though – just the symptom of something far worse.

Let’s look at EA, everyone’s favourite whipping boy these past few years. Microtransactions on everything (or not). A constant barrage of DLC including shortcuts through grinding for single-player games. Games as service. “Look at these corporate scumbags, bleeding money from the proletariat,” you sneer. “Minting it fist over stinking fist.”

Jim Sterling vents about how many of us
feel when asked to pony up again.

Only they’re not. EA hasn’t made a significant profit for investors in years. It’s pouring all its money into R&D and frantically exploring mobile, social and alternate revenue streams like everybody else. It’s afloat, and it’s making some great games that sell strongly (and others that aren’t and don’t, of course). But investors, the people who ultimately pay for development by gambling on a return, aren’t getting enough back. They just ousted their CEO for that very reason.

The problem is, traditional triple-A development is ridiculously expensive and its consumer base – hardcore gamers – isn’t growing as fast as costs are climbing. A solid game might sell 3-4 million copies. That sounds like a lot, but how much did it cost to make? That’s a difficult question to answer, but conservative estimates come in at well over $10 million. When you factor in all the costs you forget about when you’re screeching in rage at your $60 RPP (oh, Americans, the Australian editor sighed, handing over $110 for the latest Call of Duty) you’re not looking at a huge return – about 30% to the publisher. A 2011 Eurogamer article estimated that the cost of games development had increased five or ten times while sticker prices remained static, and with next-generation costs likely to increase (despite the wishful thinking of launch developers) that’s only going to cut deeper and deeper.

The big companies talk a good talk about having the digital transition figured out, but they don’t. Nobody in triple-A does, as Cliffy B said. Outside of a few stand-out cultural phenomena like Halo, Grand Theft Auto and Call of Duty, triple-A isn’t bringing enough return on investment to keep the people with the money to pay for it on board. This is precisely why companies have moved towards a “fewer, bigger titles” model over the past decade. Even were publishers to declare their eyes newly scale-free and vow that from now on, It’s All About The Games, resulting in all we self-described hardcore gamers in comment threads fulfilling our promises to buy every new release produced – there’s just not enough money there. There literally aren’t enough of us who know how to work a control pad. It’s no wonder Microsoft went Kinect bonkers.

Even if all we self-described hardcore gamers in comment threads fulfilled our promises to buy every new release produced – there’s just not enough money there. There literally aren’t enough of us who know how to work a control pad. It’s no wonder Microsoft went Kinect bonkers.

Nobody is happy about this, about how the triple-A games industry works today. Gamers aren’t happy at how the need for alternate revenue streams affects them. Developers aren’t happy about having to work on increasingly narrow, dictated projects designed by committee and focus group. The publishers losing money aren’t happy. Even the ones making money are increasingly – and sensibly – worried about how to keep the creaking old ship afloat while frantically diversifying to a score of agile lifeboats (I see you there, Activision).

I’m not saying this excuses the business practices the industry has favoured over the last few years, or that “vote with your wallet” is the end of the debate. I’m saying these alternate revenue experiments are a symptom of something much more sinister than corporate greed. They’re a symptom of the teetering financial system which underpins business in general, and which has implications both global and personal. They demonstrate that the triple-A development scene is under pressure, and at risk. The industry has collapsed before, and could do so again.

To me, that’s much scarier than the idea of a slightly higher RRP for next-gen, or some cashed-up noob forking out for a better multiplayer gun than mine.

The resurgence of the PC, digital distribution, mobile and a flourishing indie scene show that games aren’t going anywhere, no matter what happens to the big publishers. But I like triple-A games. I enjoy the bombast and the spectacle. A gorgeous single-player experience like Tomb Raider; excellent multiplayer fun like Battlefield 3; a rare triumph in both categories like Mass Effect 3. I don’t want that to go away.

I don’t like microtransactions and I’m unlikely to start spending money on them. I don’t think you should have to, either. Vote with your wallets, yes; be conscious of what message your casual purchases send, yes; but also, next time you sound off in the comments, don’t forget that hundreds of games and jobs are being gambled during a decade of incredible flux. There’s more than your Thursday night entertainment on the line here.

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