Zac Tawfick
Mrs. Mayo
Comp Block 4
6 December 2022
Microtransactions in Video Games
Video games, like any other form of entertainment, are a business at the end of the day. They have been increasing in popularity each year since they became part of mainstream entertainment. With all of this increasing demand for video games, game developers and publishers have been trying to create fresh, innovative, boundary-pushing games to meet people’s expectations. Creating boundary-pushing games requires a big budget. Most companies would make money from the retail price of their game. The customer would buy the game and never have to pay for anything else. Since the inception of online gaming, however, companies have been adding microtransactions in games where people can buy in-game items or currency for real world money. Microtransactions have had a largely negative impact on video games by encouraging gambling behavior, giving players an advantage in competitive games, and shifting the focus of developers from the quality of a game to the amount of profit they gain from a game.
Loot boxes are the most popular form of microtransactions these days, and they are, in many ways, similar to real world gambling. Loot boxes are purchasable items that give the player a random in-game item. To compare loot boxes to gambling, gambling must first be defined. According to Kevin Liu in his article “A Global Analysis into Loot Boxes”, “The three elements that define gambling are consideration, chance, and a prize of value. Similarly, loot boxes could fall under this definition because customers have to pay for loot boxes with real money that has random odds for a random virtual prize” (771). He draws many parallels between loot boxes and gambling where there are many key similarities between the two. Loot boxes carry many of the negative aspects of gambling, and as is stated in “A Global Analysis into Loot Boxes”, loot boxes are the new trend in video game monetization. They are pretty much virtual slot machines that are highly addictive and exploitative of players (Liu 771). Liu explains that loot boxes have become extremely popular in modern games, and companies recognise how addicting they are. Loot boxes are far more profitable than regular microtransactions. This is why publishers are leaning towards them so heavily and are trying to capitalize on them.
Many games allow players to bet purchasable skins when facing each other and it is mentioned in the article “A Global Analysis into Loot Boxes”:
Some games allow cosmetic skins to be acquired through grinding countless hours of gameplay and trading with in-game currency. Microtransactions provide an enticing alternative and faster way to collect more skins in exchange for real currency. The contents of loot boxes, such as cosmetic skins, can then be used as "things of value" for bets, and subsequently, exchanged on a separate platform for real money. (Liu 776)
Liu explains skin betting in games and how they can be sold on third-party platforms for real money. This is literally considered online gambling which can be incredibly harmful, especially for individuals under the age of eighteen. Almost all online gamers have been exposed to these types of bets, and unfortunately a large number of them are considered minors. Many countries have considered taking legal action and have had different views on whether loot boxes should be treated as gambling or should be treated differently. Most European countries have concluded the same thing and in “A Global Analysis into Loot Boxes” the writer concludes, “Eventually, the Belgian Gambling Commission again led the charge themselves and declared that loot boxes were gambling in its Research Report on Loot Boxes in April 2018…” (Liu 785). This would mean that all the laws that apply to gambling would also apply to loot boxes. This also means that games with loot boxes would have some form of restriction for players who are under a certain age depending on the country.
Microtransactions that give players a competitive advantage in games are the worst kind as they ruin the gamer experience. The reason game developers do this is to incentivise buying microtransactions, but this makes the game unfair and as is stated in “Pay to Play”, “One recently granted patent seeks to drive in-game purchases by making multiplayer matches difficult for a player, encouraging that player to buy an item and, once that item is purchased and used, subtly rewarding the spending by making multiplayer matches easier” (Sigmon 72). Games do this to get players to buy their first microtransaction. Once a player makes the decision to buy a microtransaction, buying more will be substantially easier. The player associates spending money with winning, and they start to make in-game purchases more frequently. In “A Global Analysis into Loot Boxes” it is stated: Entrapped in games designed to induce addictions, people who spend enormous amounts of money on free-to-play games are known within the industry as "whales." There are even instances of a whale spending up to two million USD within four years, struggling to keep up in a pay-to-win game environment. In these competitive pay-to-win games, many game developers rely on loss aversion to lead players to habits of impulse buying. (Liu 775-776)
It is said that companies make 80 percent of their revenue from microtransactions bought by whales. These whales are the players that companies target with their predatory practices in hopes of having them develop unhealthy spending habits.
Pay to win microtransactions also ruin the gamer experience by shifting the focus of the game from skill to who is willing to buy microtransactions. In “The Changing Face of Desktop” it is said, “Criticisms of pay to win microtransactions are wide-ranging. Some academics provide ethical critiques of how they may change "the game from a competition where the best player wins to ... who wants to and can pay the most"; others posit a belief that this model makes games unfair for less affluent players” (Zendle et al. 2-3). This shows the extreme lengths that some companies will go to in order to encourage players to purchase microtransactions that they are even willing to ruin their game. It is stated in “Exploring the Effect of In-Game”, “Game developers themselves indicate that this balancing act has been a matter of great difficulty, since players have no reason to pay money for virtual goods if they are already having a great time with the core game… As such, artificial barriers are often integrated into the gameplay that make the game mechanics bothersome” (Boghe et al. 220). Since most big companies do not want to consciously ruin their own game, they try to balance the game’s microtransaction system, but if the players are already having a great time with the core game, they would not even bother buying microtransactions. Including microtransactions in a game involves downgrading the core game in some form or another. Microtransactions are being abused by game developers and publishers nowadays where the player has to pay extra money to get full enjoyment out of the game. This is touched on in “Fixing the Odds” where the writer says, “Videogamers claimed that Monolith designed the game in a way that incentivized purchasing loot boxes to acquire in-game assets and their associated gameplay advantages as opposed to earning them through hard work and skill” (Fleming 76). When it comes to in-game unlockable items, rather than having to earn them through playing the game, microtransactions allow players to shortcut their way through the game which means that many players lose out on a portion of the game’s content.
Certain companies also implement microtransactions in a way that takes away from the gameplay, and Mitchel Fleming talks about this in “Fixing the Odds” where he states, “Gamers were outraged by EA's prioritization of in-game monetization over gameplay as it provided for a gameplay experience that valued and rewarded additional spending over fostering skill and participation” (76). Star Wars Battlefront II is an example of a game that is centered around microtransactions despite having a retail price of 60 U.S. dollars. The game was released unfinished as content was cut from it, and the game was littered with bugs. It was clear that EA was more focused on creating a profitable game rather than a good game. Many gamers were outraged by this, and as a result, the game sold poorly.
This has become a common practice in modern gaming and Sigmon mentions in “Pay to Play”, that “The cost of making video games has become higher than ever. Developers and publishers are looking for more ways to increase video game monetization rather than trying to create better games” (72). Star Wars Battlefront II is just one of many games that were released unfinished just for the sake of making more money. One may argue that since the cost of making video games has increased dramatically, it is okay for companies to release games half-baked in hopes of making more revenue from microtransactions. This could not be further from the truth as high rated games that are released with little or no microtransactions end up making companies the most money from unit sales.
Many games nowadays release unfinished and lock the rest of the game behind a paywall labeling it as DLC. This is brought up in “Pay to Play” where the author writes, “Another particularly controversial aspect of DLC is so-called "on-disc" DLC--that is, content developed before a game's release but accessed later in the game for additional payment. Some argue "on-disc" DLC deprives players of enjoying the full extent of their purchase: a supposedly complete game” (Sigmon 78). This is one way companies can make more money without really doing anything significant. Players now pay for what was essentially base-game content as DLC.
Microtransactions have had a significant role in the decline of the overall quality of video games by forcing players to pay just to have fun with the game whether they want to be competitive or experience the whole game. The focus of many modern games has been spending more money rather than actually enjoying the game. There must be certain rules to limit the amount of microtransactions in paid games for them to return to their former glory. Indeed, the revenue generated from microtransactions helps developers make more games, but the downside is too great to ignore. Companies should focus on making a profit from the unit sales of complete games with little or no microtransactions. The best video games are never known to have microtransactions.
Works Cited
Boghe, Kristof, et al. "Exploring the Effect of In-Game Purchases on Mobile Game Use with Smartphone Trace Data." Media and Communication, vol. 8, no. 3S2, 15 June 2020, p. 219+.
Fleming, Mitchel. "Fixing the Odds: Designing Intelligent Loot Box Policy in the Canadian Context." University of Toronto Faculty of Law Review, vol. 78, no. 1, 2020, p. 74+. Gale General OneFile, link.gale.com/apps/doc/A655542505/GPS?u=pl2626&sid=bookmark-GPS&xid=63121409. Accessed 27 Oct. 2022.
Liu, Kevin. "A Global Analysis into Loot Boxes: Is It 'Virtually' Gambling?" Washington International Law Journal, vol. 28, no. 3, July 2019, p. 763+. Gale General OneFile, link.gale.com/apps/doc/A604093431/GPS?u=pl2626&sid=bookmark-GPS&xid=47d4b4b4. Accessed 27 Oct. 2022.
Sigmon, Kirk A. "Pay to Play: Video Game Monetization Patents and the Doctrine of Moral Utility." The Georgetown Law Technology Review, vol. 5, no. 1, spring 2021, p. 72+. Gale Academic OneFile, link.gale.com/apps/doc/A667924827/GPS?u=pl2626&sid=bookmark-GPS&xid=54be956e. Accessed 27 Oct. 2022.
Zendle, David, et al. "The Changing Face of Desktop Video Game Monetisation: An Exploration of Exposure to Loot Boxes, Pay to Win, and Cosmetic Microtransactions in the Most-Played Steam Games of 2010-2019." PLoS ONE, vol. 15, no. 5, 7 May 2020, p. e0232780. Gale Academic OneFile, link.gale.com/apps/doc/A623043505/GPS?u=pl2626&sid=bookmark-GPS&xid=22648a7b. Accessed 27 Oct. 2022.