Bad news for the gaming industry: video game publishers are making billions from microtransactions and more and more games are starting to support additional paid content as a result.
Here’s a look at how much money microtransactions are bringing in for developers, and an insight into how microtransactions can be both good and bad for the industry.
Here’s How Much Money Is Made From Microtransactions Each Year
It’s not surprising that game publishers are making a lot of money from microtransactions. They wouldn’t be as prevalent as they are today if they weren’t such a financial success.
What is surprising is just how much money microtransactions are making for video game publishers.
In the first quarter of 2018, EA made over $787 million from what they call ‘live services’ – this relates to revenue made from extra content from online games. For EA, this means microtransactions for games like FIFA, Mass Effect, and Madden.
EA aren’t the only ones either. Ubisoft also mentioned that their last financial year was very successful due to their push for more microtransactions.
In the last three months of 2017, Ubisoft managed to pull in €318.5 million in revenue from recurring player investments. This is just a fancy term for microtransactions.
What’s scary is that Ubisoft mentioned that they want to ‘close the gap’ on their competitors. Right now, EA makes up about 39% of their revenue from microtransactions. Ubisoft makes just 18%, but they want to make a similar amount of profit from microtransactions as EA does.
In Ubisoft’s latest earnings call, they also explained why microtransactions are so profitable. Ubisoft mentioned that creating additional microtransaction content is very cheap for them to do – it requires little development costs and almost no marketing costs.
Ubisoft also explained that they think loot boxes should stay in gaming. Ubisoft CFO Alain Martinez said that “Ubisoft does not feel there is any major regulatory issue regarding loot boxes,” which suggests that Ubisoft will continue to push for more loot boxes in the future.
The Positive Benefits Of Microtransactions
With all of this extra revenue being created from microtransactions, it’s safe to say that those working with publishers like EA and Ubisoft are sure to feel the positive benefits from additional content. But what about the everyday gamer? Are there any benefits from having microtransactions in your favorite game?
Surprisingly, there are a number of benefits that exist because of microtransactions. The benefits that impact the everyday gamer are not directly related to microtransactions, but related to the revenue that they bring in.
With microtransactions helping big game publishers to grow their revenue even further, the health of the video game industry is incredibly stable right now. More money and a stable economy for the video game industry means that we can expect more games from AAA developers in the future.
It also means that more money could be invested into bringing more developers under the wings of triple A publishers.
As unfortunate as it may be, the video game industry does need to succeed financially for newer games and consoles to be introduced to the market.
The Negative Effects From Microtransactions
Whilst we have pointed out the positive impact that microtransactions can bring above, the truth is that microtransactions mostly bring a negative impact on the industry.
We’ve listed some of the biggest negative effects from video game microtransactions below.
Games Are Getting Restricted And Feature Less Content
As more video game developers start to realize that there is a lot of financial potential in microtransactions, more games will have less content on launch and more content hidden behind a paywall.
Take Destiny 2 for example – the base game is pretty limiting, and Bungie has clearly worked hard to encourage people to spend as much money as possible on the game.
Battlefront 2 is a recent example, too. If EA didn’t get so much community backlash, Battlefront 2 would be filled with microtransactions that allow players to unlock better equipment faster.
These types of microtransactions are designed to make regular gameplay boring without spending money.
Kids Are Getting Hooked On Loot Box Gambling
Whether the Ubisoft CFO thinks so or not, loot boxes are a form of gambling. There should be some kind of restriction on how kids can pay for money to gamble for rare items. When there’s no money involved, it’s less of a concern, but many people are losing thousands in an attempt to get a rare cosmetic item for their favorite game.
Some Games Are Becoming Pay 2 Win
When free to play games started to appear, many people were concerned that all free to play games would be pay 2 win. Many free to play games allow players to buy exp boosts, more powerful gear, and extra equipment to fight other players with.
Nowadays, full games with massive $60 price tags also come with these same pay 2 win mechanics. When you’re already throwing $60 on the game and $40-60 on the season pass, it feels like you’re being robbed for all you’re worth when a developer throws in pay 2 win microtransactions.
After going through this entire list, it’s safe to say that the cons for microtransactions far outweigh the pros.
How Can We Stop Microtransactions?
We need to take a stand against microtransactions. Video game publishers should put more thought into the kinds of in-game transactions they put in their games.
We need to look at the response EA took after the gaming community became so outraged at Battlefront 2’s microtransactions. If we give that kind of response to all unfair microtransactions, more publishers may start to take notice.
Ultimately, we speak with our wallets. If you don’t like microtransactions, don’t give into buying them. Instead, spend your money on games made by developers that still care about making high quality video games instead of trying to squeeze out more money.
What are your thoughts on microtransactions? Do we, as a gaming community, have the chance to stop them from being so widely implemented, or are we fighting a losing battle?