Are Microtransactions killing the Gaming Industry

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Jordan Smith

Publish Date:

24 Nov 2020

It seems you can't pick up a game these days without there being an option to buy in-game currency, cosmetics, loot boxes or ways to make your game easier. Microtransactions are everywhere, these under £5 optional purchases can be found on every platform, and most games regardless of age rating. Whilst these can be great for developers, publishers and even players when it comes to cosmetics, are these small purchases ultimately killing the industry as more and more developers add them to their titles? If you want to know more about any of the terms used in this article, please check the glossary at the bottom of this page. Before we go into this let's take a trip back to what games were like before downloadable content and Microtransactions, since the dawn of modern PC gaming, we saw a lot of expansions available for videogames, known then as expansion packs. Typically these expansions would add a lot of content to the game, from new factions, to new a whole new campaign with hours of additional gameplay and cutscenes. Some expansions were purely cosmetic too, but in place of a single item, you would get a whole wardrobe of them. Whilst you could compare these to modern microtransactions, these items were not exactly cheap and were only ever in your face when at the local Blockbuster or Gamestation. When it came to console games, there was no such thing as expansions or even online marketplaces for expansions and cosmetics. Instead, developers would add ways to unlock cosmetics or even new gameplay modes through the use of "cheat codes" and by completing a variety of challenges that often ended up being insanely tough. This often gave games a level of replayability and rewarded players for getting good at the game, along with bragging rights for when you had your friends over. Then we fast forward a little bit to 2006 with the ElderScrolls IV Oblivion. This popular RPG was the first video game to introduce microtransactions with its Horse armour DLC (Downloadable Content). This purely cosmetic item sold for approximately £2.50 and is still available today at £1.69. This was a test for Bethesda to see whether DLC content would be worthwhile, and over time became known as the first microtransaction. The DLC outraged fans across the world, due to Oblivion being a full-priced game and this small addition could have been added on as a patch. However, through the outrage, people still purchased the horse armour, and the test proved successful. Bethesda began adding more DLC to Oblivion, which this time wasn't too dissimilar to the expansion packs that gamers were used to on PC, rather than being a microtransaction, these are what then became DLC.

A year later, in 2007, we saw the release of the iPhone, which is where microtransactions truly began to rise into the spotlight. Mobile gamers were introduced to the world of free to play games, which often had a built-in pay to win or loot box mechanic, allowing players to make small purchases (microtransactions) to become stronger, better, or just look cooler than the other players. These free to play games became the backbone of the Apple Store, and by 2011 free to play had overtaken the premium games in the apple stores top 100 listings on revenue. Between 2007 and 2011, other major video game publishers and developers also took notice of the microtransaction system. The most notorious of which is by EA Sports. In 2008 EA Sports released its first game mode built purely around microtransactions, specifically loot boxes ( cleverly renamed to "surprise mechanics") in FIFA Ultimate Team, part of the premium game FIFA 09. The loot boxes allow you to get better players for your team, and encourages it for you to win and "play among the best." FIFA Ultimate team first sat at a player base of 1 million in 2009, whilst today it holds 45 million players, with many caught in a system of buying loot boxes in the hope they won't lose the next match. FIFA Ultimate Team is just one of many games that uses loot boxes to lure fans into making microtransaction for better in-game results, and it isn't only sports games that are guilty of creating pay to win mechanics in premium-priced games. Another EA title Star Wars Battlefront 2 also tried to introduce loot boxes and digital currency to the highly anticipated shooter. This move by EA was met with an incredible amount of backlash, that damaged EA's standing with Disney, and forced the house of mouse's hand. EA was told by Disney to remove the microtransaction model from the game, and instead allow players to "earn their upgrades". Unfortunately for EA the damage was done and whilst Battlefront 2 did see a community of its own, it was only a fraction of what it could have been if it was done right from the start. These two examples listed above are how microtransactions are hurting the gaming industry and gamers alike. Loot boxes have been the subject of multiple investigations by multiple governments that have concluded that they are in fact gambling, and young people below the age of 18 (legal gambling age in most countries) are forming an addiction to the loot box mechanics. With the most recent being this year, where the Netherlands banned loot boxes and also fined EA up to €10 million as FIFA titles were listed as a PEGI 3 (age rating). As for Star Wars, the use of loot boxes saw it lose numbers of players which didn't begin to truly grow again until near the end of its lifespan where it added the classic "command post" game mode and new maps.

On the other side of the coin, there are times where microtransactions have done good things for both gamers and developers alike. For example, Rainbow 6 siege, a game that intends to last ten years + uses microtransactions to help sustain it over its long lifespan. However, unlike rival first-person shooter Battlefront 2, the microtransactions in Rainbow 6 Siege are purely cosmetic. Loot boxes are still a thing in Rainbow 6 Siege, but the game doesn't depend on them, meaning that if a ban were placed on the mechanic, they could easily be removed. Players can instead take advantage of the Rainbow Six store, knowing exactly what they are buying in a more controlled style of microtransactions. It is these microtransactions that allow players to show their colours and can even unlock a vast majority of the stores content with currency unlocked by playing the game. Another example that uses the same model as Rainbow 6 Siege is Fortnite an extremely popular free to play shooter. When we first saw Fortnite the game was lousy with loot boxes, and whilst loot boxes are still a part of the game again it has no bearing on the game itself. Epic Games seem to be aware of what Loot Boxes are doing to its young fan base and are making change, such as making their loot boxes "see-through", so players know what they are buying, But is this enough? The microtransactions of Fortnite are what keep this game alive for the most part and allow Epic Games to keep Fortnite and its many free events open to all players regardless of whether they buy cosmetics or not.

There are many games out there that build their games based microtransactions, be it as loot boxes that improve your in-game stats or as cosmetics that can change a players experience. Our final examples of microtransactions are that of the free to play trading card games such as Hearthstone by Blizzard and Gwent by CD Projekt Red. Whose loot boxes work the same as physical trading cards, such as Pokémon and Yu-Gi-Oh cards, where you get newer cards both strong and weak as an option to your deck. These mechanics keep the game alive, and whilst they are using a tried and tested method much like the physical trading cards which filter these games into the same style of game as FIFA Ultimate team and Star Wars Battlefront 2. The difference being is that these are free to play titles, which allow players to enjoy the services regardless and players can still win based on skill, and the loot boxes are easily obtainable through the in-game currency earnt by playing. Personally, I believe these types of games are a bit of a grey area. As more and more countries begin to ban loot box mechanics, it will be interesting to see whether these styles of games change with the tides or sink alongside the mechanic.

Microtransactions are here to stay it would seem, and the developers used as examples are not the only ones taking advantage of them. Loot boxes and straight-up purchases have become a backbone of the video game industry. Whilst many believe microtransactions exist to line the pockets of devs and publishers solely, they are also used to keep popular online services alive with fresh content and new experiences for players. The question remains though are microtransactions killing gaming? My answer is yes, but it is not too late to change that. Loot boxes and pay to win mechanics are the knife that has wounded the industry. But as more and more countries begin to ban the Lootbox mechanic, this wound slowly begins to heal. In my opinion, as a gamer first, I am happy to see microtransactions in the form of cosmetics, so long as we have the option to unlock them with our skill as well. I have and will continue to support developers and publishers who do this especially if they choose to make their incredible game free for a limited time (yes I am talking to you Fall Guys), or keep it running with continual improvements or additional free content. My fellow writer and founder Kyle also had these words to say about Microtransactions when I asked him the same question: "My answer is only Loot Box mechanics that exist to exploit gamers and for younger audiences, are the ones ruining the gaming industry. I'm quite comfortable with added story content in the form of DLC that is purchasable. Ultimately these motivate developers to expand their games, which is usually a good thing all round. Although, developers that plan to add "DLC" OR Loot Boxes to their games need to be thoughtful about it, and their audience. If they have a game with an age rating of 3+ game or an under 18 average age demographic, then adding paid content to these is usually feels to me as outright exploitation. Children don't have access to wads of cash usually, and if you create a need for them to pay it, you pave the way to kids being pressured or teased into finding a way to obtain the expansion. Just look at Roblox, how many purchases on that are kids using their parents saved banking details? Whereas, if your key demographic is of a mature audience, then an adult is completely conscious of their decision to make a purchase. They usually have some level of access to their own money. The line with Loot Boxes for me is when a game is made in a way that intends for you to purchase its expanded content. I don't like the idea of getting a game (free or not) and being forced to have to buy points to be able to progress, like Clash of Clans, for example."

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