Microtransactions. Not the holiest of words in the videogame industry. It was a practice that started as a way to add value and prolong the life cycle of a game and has now evolved into a monster of gargantuan proportions. While the various monetization practices executed by game companies are questionable and not exactly welcomed with open arms by the audience, we cannot deny that it has played a huge role in what the videogame industry means in todays world. For as much negativity that surrounds this matter, there are also some positives that cannot be overlooked. Let’s take an honest look at what impact it has on the consumer and the makers of the game, what different forms videogame monetization has taken, and what it all means in today’s world.
Entertainment mediums in general have various methods of monetization. The process, of course, has evolved with time. The ticket we buy at the box office, was the only form of monetization for movies, which evolved into re-runs on TV, home videos, and now streaming services. And the same could be said for Music and Books to a certain extent. But the key here is that whichever way or form the audience chooses to consume these media, they only pay for it once. And this was also the case for videogames until internet services became common commodity and videogame consoles were made with connectivity as a prime requirement in mind. Suddenly a ten plus hour game had downloadable expansions and purchasable in game items, and the publisher could exploit this for as long as they could keep the player’s interest in the game. This was now a by-product of an ever-evolving industry, and it was here to stay.
Back in the PS2 days, when terms like microtransaction were unheard of, a small studio could make games with a set budget and make ends meet with modest sales, with those sales being the only form of returns. As consoles and PCs got powerful however, so did the cost of development and consequently, the risk involved in making the games. This meant that big games were now largely made by huge corporations and small studios were all but extinct by the end of the PS3/Xbox 360 era. And the idea of microtransactions naturally did appeal to said corporations. This could well be the answer to the rising cost of development, and great games could still be made without too much pressure.
However, corporations by definition exist to make money. So, it was only a matter of time that this gateway of revenue would take many different forms, to make the most out of it. From DLCs, to in-game purchases/microtransactions, to loot boxes, to special editions and promise of early access on pre-orders, there are more than a handful of ways to persuade the consumer to pay his money.
All of this only indicate that these companies are keen on making as much money as possible, instead of making the best product possible. The justification of rising costs hardly has legs now as companies that make hundreds of millions off of a single game incorporate even more aggressive monetization avenues in their next game. Industry giants like Take Two have admitted that post sale revenue makes for more than half of their total revenue. And they are not the only ones to benefit handsomely through these monetization methods. Which is why it make sense that these companies don’t want to mellow down on it despite the uproar among its own customer base, and the various controversies that pop up regularly on this matter.
All of the above was hot news until a year back. Now though, it looks like companies seem to have realised that this may hurt them in the long run and are staring a take a step back. Two major games this year have been touted on having no loot boxes/Microtransactions. Borderlands 3 was confirmed to have no loot boxes, however its stance on in game purchases is unclear.
NFS Heat was confirmed to have neither of them. In NFS’s case though, this could be in response to the backlash the previous game in the franchise had, thanks to the implementation of “Surprise mechanics” to the point where progression was hindered unless the player chooses to pay. While this gives us players the hope that things are changing, it could still be a case where these companies are just testing the waters on how feasible a game without “in game spending opportunities” would be. And that leaves more questions than answers unfortunately.
All controversies aside, all of this money also means that the industry is now bigger than ever. Videogames form a huge part of pop culture today and from a creator’s standpoint, getting into the industry and making your own game, while still tough, has never been more inviting. Games are more globally accepted than ever before. Take India for instance. Gaming was once considered just for kids, and while it still largely is, the notion is changing, and the change is happening fast.
Similar to the way the world has changed due to smartphones and the internet, the videogame industry has evolved to a point of no return. And the various monetization methods are part of that evolution, for better or worse. It is a double-edged sword that could deal great damage to the industry if not handled with care. Here’s hoping that things don’t get that far.