DLC, Micro-Transactions and Loot Boxes: Innovations for Cold Hard Cash

It was 2014, and the finale to the Batman: Arkham games, one of the most popular series of the last decade, was just announced. Millions of thrilled fans went to YouTube to watch the Batman: Arkham Knight announcement, learning that Two-Face would be a villain. They also learned that if they didn’t pre-order this game they wouldn’t be able to play as Harley Quinn. Yes, they were pushed to preorder a game based a few minutes of video, which didn’t feature any gameplay.

gamePre-order exclusives are one of many ideas that the game industry has come up with to incentivize customers into giving their money away. Over the last decade the AAA game industry has come up with further innovations, not just to entice customers to buy games early, but also to gain a bigger profit. Sure, making games is a business and businesses are in it for the profit, but why are concepts like micro-transactions and season passes so common now in gaming?

In the beginning, the only way for companies to make money was through selling their game, make a new game and repeat. Most AAA games cost the same price, from a first-person shooter or a management simulator AAA, games usually cost $60. Why not just increase the cost of the game? For the answer check out Game Rant’s article about the subject. Truth is, companies are scared to deviate from the standard formula.

One of the first ideas for extra profit was to sell expansions, updates to games that add new content, usually for PC games. Not all of these updates are huge changes. Some content contains smaller additions such as cosmetic items or new weapons, to help keep players interested.

In the past few years, companies have been relying on DLC more than ever for a constant post-launch cash flow. There has been some debate as to how ethical these practices are. For example, some game critics argue that day-one DLC should be in the original purchase instead of being locked away until players spend more money. Yet, others defend these practices. There have even been some that have accused publishers of taking large amounts of content out of the initial game so they could sell more through DLC.

gameWith these new ideas being implemented, the AAA game industry transformed the idea of games being a single transaction product, into a continuous service that requires updates and new items, which in many cases the players must pay for. There is little downside to these DLC practices in the eyes of these publishers, because they usually take little resources and lead to a bigger net gain.

gameRemember the $60 set price mentioned above? Well, publishers started experimenting with different price ranges by releasing special edition games with more content. While the core game stays at $60, these special editions can go for much more.

Even with these additional avenues of profit the game industry continued to find ways of enticing gamers into spending more money with the implementation of micro-transactions in $60 games. For years, micro-transactions were utilized specifically for free to play games, where the player doesn’t have to pay, but the game’s progression is often purposefully slow to get them to pay for credits or items with real money in order to speed the game up. There is a large number of customers that are completely against the idea of these kinds of practices being featured in AAA games, and as the game industry has been using micro-transactions more than ever, the backlash against these companies has as well.

The success of micro-transactions has culminated in a controversial new business strategy that has taken the game industry by storm this past year. Loot boxes, a new form of micro-transactions where the player pays for a random item instead of getting to select one. This instantly began a debate between gamers as to how far was too far. There were many that defended these practices, while others voice their concerns.

For example, some critics argued that the loot boxes took advantage of people with gambling addiction. This was in light of the recent CSGO lotto controversy. A developer of the Lord of the Rings game, Shadow of War defended his game’s loot boxes by stating they were there to help the player. “It’s there as a player choice. It’s there, from my perspective, for people who are protective of their spare time and scared when a massive game comes along that they’re not getting to see the full experience. It’s the same design philosophy as us adding in difficulty modes. So now we have Easy mode, and we’ve added Hard mode at the other end of the spectrum.”

These are issues still being talked about today. An industry with a once simple business model, is now in a constantly evolving state where the next money-making idea is just around the corner. All of this has left a growing divide between publishers and gamers. There has been a growing feeling that customers are being cheated out of content initially because developers are focusing on expansions and DLC rather than the core game itself. Many would argue that these practices are only beneficial to the industry. Yet, this problem looks to continue as companies are finding financial success with these ideas.

There is little that consumers can do to change the minds of publishers like Warner Bros. and EA. There has already been a large amount of vocal opposition against micro-transactions, but there are always those who will side with the companies. Wherever there’s a profit the industry seems to go, and so the only way for gamers to make a difference is to talk with their wallets.

-Reese Stolte

3 thoughts on “DLC, Micro-Transactions and Loot Boxes: Innovations for Cold Hard Cash

  1. I feel like a game doesn’t have much longevity if it doesn’t have some of these micro transactions. For example, every Call of Duty game you get bored of the maps after a few months. Not only do the new DLC map packs create revenue, they also help the game last longer. The only cases that this may not be needed is like Destiny or Skyrim where it has a long story or lots of things right off the bat.
    Another reason micro transactions can be a benefit is with the preorder exclusives or “Legendary” editions. For example, call of duty always has at least 2 editions come out. Black ops 3 came out with the Juggernog edition which included mini fridge with the game. This is something you can use beyond the time that you play the game, so it gives players more of an incentive to buy these better editions

  2. Why do gamers put up with this stuff? It’s so ridiculous. Honestly, it’s because of this stuff that I stopped preordering games. Especially, after the disappointment that was the game Destiny.

  3. There’s an interesting dynamic with micro-transactions in games. When it comes to consumers actually purchasing items through micro-transactions, a large majority don’t actually spend any money at all. A 2014 article from ExtremeTech states that only 0.15% of players account for half of all free-to-play revenue – an insanely small minority. This leads to a huge problem for free games with micro transactions: fun games end up being plagued with less than fun mechanics that are alleviated by paying a couple bucks. Micro transactions have led to interesting developments in gaming distribution, but I wonder if it’s ultimately doing more harm than good. Certainly not for the publishers.

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