Video Games Attack of the Microtransaction Lets get on the same - PowerPoint PPT Presentation

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/.