Saturday 6 January 2018

My two cents on microtransactions

2017 sure was an interesting year for the game industry. Most notably because of the lootbox controversy and the attempt to classify it as gambling. While I'm not going to say whether or not it should be (because there's so many variations of it, we can't just slap a label on all of them), I think it's certainly interesting to examine implementations of microtransactions that actually work properly - because yes, there are models of microtransactions that have been done in consumer-friendly ways. It's certainly tempting to just scream "NO!" at the whole concept, but doing so as a developer with the current market trends, might doom your studio. The sad truth of current consumer trends is generally that microtransactions (I'm calling these MTs from now on) is how we earn our  money today. This is especially prominent when it comes to single player games, though plenty of people voice their desire to play these games, there's just not enough sales on this front to justify a triple-A spending budget. This is partly also because of the gradual increase in production costs of triple-A games going up, as the fidelity of the products are increasing alongside our technological capabilities.

~ Game economists 2017
It could always be argued that the studios can get around this cost by finding a cheaper aesthetic, but not everyone has the luxury of making this decision on behalf of their studio.

The categories:

I don't believe the market for single player games is gone, but it appears that developers who wish to focus on such experiences may need to rethink their approach in spending. This also means that many of you who are interested in working in the game industry, are now far more likely to work on a multiplayer-centric game experience - the land where MTs are king and the best games earn themselves back a hundredfold. It is risky ground to thread however, as it is very easy to create a system which will make the consumers extremely angry. Fortunately, it is quite easy to make an implementation that is fair and unobtrusive as well. The reason anyone ever makes the version that pisses people off, is because of the money-making potential. Let me clarify with the general categories from most acceptable to least (from a Western perspective):

Cosmetic microtransactions:

It's fairly easy to summarize a general safe-space with this category. By focusing your transactions purely on cosmetic aspects of the game, it's generally accepted as a way to obtain new aesthetics for the gameplay elements, without actually having a direct effect on the game mechanics. Some players even view this as a way to donate money to developers whose games they enjoy.

Some warpaint for a good boy?

Convenience microtransactions:

This category is a bit more of a blurred line and is most commonly found in MMORPGs and similar genres. A convenience microtransaction is something that actually has some influence on the game's mechanics, but with a fairly well-defined ceiling as to what benefits they may actually provide. It is hard to illustrate without a context, but the essence of it is that it speeds up certain progress such as EXP in an MMO, or provides simple baseline functionality which is not better than the best which can be acquired by actually playing the game. Essentially convenience MTs mean getting to the final content quicker, but not allowing the paying players to become competitive with the other best players, without actually spending time playing the game. This model works best when there's a defined system of progression in the game, such as leveling a character to get access to later content.

While this model certainly provides a benefit to the paying players, the limitations are what makes it work as it retains rewarding nonpaying players for their hard work. But please be aware of the very fine line between this and the next category - one misstep here and you'll easily end up with a fistful of extremely agitated consumers. The key is the fact that even if you pay, you still need to play to get proper good.

Power microtransactions (also known as "pay-to-win"):

If you've ever seen The Lion King and recall the scene where Simba's father looks out over the land, telling him of that dark place he must never go, then you've got a decent idea of what's going on in this category. To the majority of the Western userbase, pay-to-win is a huge no-no because it undermines the hard work of others by simply letting the paying users buy power to become competitive. Comparing this category to the convenience category, the difference is really that there's no proper limitations to what can be purchased. It is up to you as a designer to determine what's acceptable here, but never forget to make good use of everyone in the team, as there's can be gaps in what each individual deems ok. Just remember to keep a friendly tone!

Office fisticuffs solves only some design problems

Despite all of the criticism I've just doled out for this category, there's never a thing in the world that's so bad it's not good for anything. If you're working on a game for the Western market, you can be pretty sure people are going to dislike pay-to-win. But if you're making a game for a country like China, it's a very different story, because many Chinese actually want to have pay-to-win in their games. In China there's a different view on this because of the social status of money, which makes you more respectable if you can actually afford these things. This is why localization is hugely important, always make sure you understand your target audience before you think about monetization potential.



Examples:

There's no good theory-posts without some actual examples from real life. I'll go through a few games I believe have been exemplary in each category, trying to outline the do's and don'ts and what I think they do well or could perhaps have done differently. It won't be a thorough listing of every little aspect of each game's microtransaction economy, but more of a recommendation that you investigate these titles for yourself if you are curious. Just mind that I'm no expert in this field, these are simply my opinions which arise from my personal and professional experiences on the subject matter.

Warframe:



A great game with a very interesting approach to microtransactions, Warframe is one of the few good examples of a free-to-play title that does not screw anyone over, by making all of its content accessible without ever forcing the users to actually purchase anything. While the game's economy in itself is very large and complex, interwoven with timers and weird currencies, the premise can be summarized as this;

Warframe lets its users buy almost everything. By all means it is a game which would normally have been classified as pay-to-win. The way they manage to get around this label is by imposing caps on their players, which they can only raise by actually playing the game. In other words; you can buy the potentially best gear, but it doesn't ever achieve that power if you don't play the game.

By and large however, I believe another good reason the game has not been labeled as pay-to-win, is the fact that the game has no competitive scene. The Player vs. Player scene is almost gimmicky with completely broken builds where people kill each other in one hit. But this unhinged capacity to wreak havoc is a result of the game's actual focus, which is to enable players to just have fun cooperatively. When everyone's fighting alongside each other, there's far less bickering about who smacked who the hardest, because everyone's a winner fighting against the computer.

Additionally, the game has an enormous amount of characters, weapons and customization - both mechanically and cosmetically. No one can buy everything unless they're super rich, there's always something new to grind for even if you're a paying user, and many free users eventually decide to spend money as the game occasionally throws 25-50-75% discount coupons at them. It is fairly easy to reach the endgame as well, where the focus for the majority of players turns towards cosmetics, which clearly reflects this general interest in fun above competition.

Some people even call it Fashionframe


The Elder Scrolls Online (ESO):



The Elder Scrolls Online is an MMORPG that you have to purchase once to play it, but there is no mandatory subscription fee afterwards - as is otherwise common for these types of games (eg. World of Warcraft). However, it does offer an optional subscription service as well as an ingame currency (Crowns) which can be purchased for real money and spent on a marketplace (Crown Store) for convenience items and cosmetics. As you may have guessed, ESO falls flat within the convenience category on microtransactions, offering services and mechanical buffs, which primarily aim to help lessen the time it takes to grind to get to the endgame content. Once the player does reach the endgame content however, there are diminishingly small benefits to be gained from these purchases, whereby the focus shifts towards cosmetic purchases instead.

Before we delve any further into the specifics, I think it's interesting to examine the optional subscription model that the game provides. Since ESO was released, several smaller DLCs have come out, each either a story campaign with a new area to explore, or some new dungeons with new armor sets and weapons to acquire. These DLCs are not automatically available if you purchase the game, but they can all be accessed to subscribing players, or players who have purchased permanent access using Crowns. The one exception to this DLC format is the Morrowind expansion, which is only available via the permanent access purchase model. Subscribing users also receive additional benefits as well as a sum of Crowns per each subscription renewal.

DLCs aside, the general purpose of Crowns is to purchase items in the Crown Store. There's cosmetics, convenience items and Crown crates, the latter being a way to purchase a set of randomized items that may contain rare stuff which can't otherwise be bought directly. It is because of this random element that some people have speculated whether or not this "loot box" system in games, should be labeled as gambling. This is almost a whole topic in its own right however, so I'll leave it at that, but my personal opinion on loot boxes is they're fine as long as the contents don't pander to a pay-to-win model or otherwise ruin the base game's mechanics and balance.

Overwatch:


Overwatch is a competitive "MOBA-style" shooter, which is most closely comparable to Team Fortress 2 without gun loadouts, instead relying on individual character designs to provide gameplay variety. The economic model behind this game is that the users must purchase it once (at full triple-A pricing) and then get access to all of the game's characters and gameplay content, including all future content. However, Overwatch also has a loot box system that provides purely cosmetic content. The boxes can be purchased but are also automatically given to players with steady intervals, simply as rewards for playing. An absolutely massive portion of this games revenue comes from purchasing these boxes, which may sound odd granted the fact I just mentioned that they're giving the boxes away for free. But the keyword is; seasonal content.

Where Overwatch really managed to hook people into buying these boxes, is through what's commonly called artificial scarcity of certain cosmetic items. Throughout the year, the possible content that can appear in these boxes will change with the seasonal events. Each event typically lasts a few weeks, within which seasonal loot boxes are available instead of the normal ones. The seasonal boxes are guaranteed to contain at least one of the seasonal items. With the limited time people have on their hands to gather up these boxes, many users are likely to buy huge piles of the seasonal boxes when they are available, just to be sure they get the cosmetic items before they become unattainable again.

Of course, if the game had been terrible, this model would probably not have worked. The key to the success of the microtransactions in Overwatch is really a combination of the game's quality and the aforementioned virtual scarcity.

Star Wars: Battlefront II (2017):

 

Not to be confused with the original Star Wars: Battlefront II from 2005, the new Battlefront II has been the subject of an enormous amount of controversy. I will be up front here and say that this is the one game on the list that I have not actually played, though a few of my friends have, whom I've discussed some of the game's ups and downs with. It is my understanding that underneath the massively bad rep the game got because of its implementation of microtransactions, there's still a fairly solid experience to be found. I can at least say that it looks quite impressive, the production quality is very high and the overall feel of the game is something that most of my friends quite enjoyed.

This, unfortunately, gets us to why the game got its review scores hammered into the ground. Battlefront II's loot box system was very similar to that of Overwatch. You'd have to buy the game once, though that didn't grant access to future content. Additionally - and this is what got everyone so riled up - the contents that could be gained from these boxes in Battlefront II, was not purely cosmetic. A lot of the items that were found in the boxes had a direct impact on the power the paying players were able to exert over their non-paying counterparts.

I don't think this needs a caption. Oh wait-
As mentioned previously, this business model may have done well if the game was published purely in regions like China. Unfortunately for EA and DICE, Star Wars: Battlefront II was meant for the western market with completely different tastes. I honestly don't think there's much more to add, it was a huge misstep and the system was actually removed from the game as a reaction to the bad press. Whoops! But who knows, maybe with the changes to the loot box system and some PR work, the game could recover.