Blood in the Water: A History of Microtransactions in the video game industry

The infamous Star Wars: Battlefront 2 is a tale that exemplifies just how far the gaming industry has gone in terms of Loot boxes, and Microtransactions or MTX. They locked several key characters and weapons behind a loot box system, where players could either grind for hours, or pay real-world money to buy boxes, which held a chance of getting something that they might want. While many other games had adopted this model, Battlefront took things a touch too far. A Polygon article about Battlefront 2 explained how the community worked out that in order to unlock everything in the game, a player would have to play an average of 4,528 hours (Frank).Not four hours, not twenty hours, but four thousand hours. To bring that number into perspective, it would be the equivalent of two and a half years of working a full-time job to unlock everything in Battlefront. With that amount of time, people have been able to get bachelor’s degrees in college. People were incensed, and Battlefront 2 was a fiasco, costing EA nearly three billion dollars in stock value. How did the games industry progress to this stage?

 The Loot boxes of Star Wars Battlefront 2.

The Loot boxes of Star Wars Battlefront 2.

Background

Loot boxes weren’t the first form of gaming MTX to hit the market. The concept of MTX came from mobile games. The term “freemium” is commonly used when describing mobile games that incorporate microtransactions. Often times, the game itself is free to download and play, but people could purchase in game currency, using that currency to gain an advantage over players that did not spend money. One mobile game that skyrocketed in revenue from this model is the mobile game Clash of Clans.

In 2015, Business Insider reported that they earned a staggering revenue of 1.5 Million dollars a day from their freemium model. However, they certainly weren’t the first people to make profit off MTX. The slow trod to loot boxes started a lot earlier than the mobile game craze. It started off near the golden age of games, the mid-to-late 2000s.

 

Early Warnings

The year was 2006, a great year for gamers. Titles like Gears of War, Dead Rising, Prey, Saints Row had their first releases to consumers. However, there was another title that grabbed headlines for the entirely wrong reasons. The Elder Scrolls IV: Oblivion released around March of 2006. Universally acclaimed, the game sold millions of copies. In April, Bethesda announced that they would continue to support Oblivion by adding downloadable content (DLC) for the game. The first pack was horse armour. The armour did nothing to change the horse’s ability to ride, and it was purely cosmetic. The pack cost 200 Microsoft points, or 2.5 dollars.

 Oblivion’s horse armor in all its glory.

Oblivion’s horse armor in all its glory.

 People were not happy about this, citing the inherent uselessness of buying something just for its looks. Nowadays, people have stated that they’d rather a system like this, where you could directly buy items, rather than the loot box system that most companies have now. MTX evolved as games did, and when games reached social media platforms, MTX followed suit.

Facebook was at its heyday in the late 2000s, boasting a massive network of users on the website. One of their most popular apps on Facebook was Farmville. Created by Zynga, the game incorporated MTX from launch. Players could use real-world money to purchase time-savers for their crops, or items to increase their yield. While Farmville was derided by some video game critics for its repetitiveness, no one can deny that it was incredibly successful.

 FarmVille 2, which also had microtransactions with its game.

FarmVille 2, which also had microtransactions with its game.

 It comes as no surprise that bigger companies have deigned to move towards this model. Triple A companies would start to add time-savers, or other advantages to their games, but they soon found another way to make money. Season passes.

 

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Nowadays, season passes are quite unpopular amongst gamers, and seen as anti-consumer. However, when Rockstar Games came up with a Rockstar Pass for their game L.A. Noire in 2011, it was a completely new concept. Rockstar sold content that hadn’t even been released yet to their consumers, and people still bought it.

 LA: Noire, one of the first games to include a “season pass”

LA: Noire, one of the first games to include a “season pass”

Within the same month, Mortal Kombat released with a season pass as well, and the craze started. Soon, season passes were synonymous with AAA games. The issue that a lot of gamers began to raise with season passes was that for some games, they were essentially paying for a product in which they had no idea what the content was. It could be incredible, worth every cent that they spent, but it could also be a horrific waste of money.

Moreover, some games began to release maps with their season passes, then locking playerbases between those who had the season passes and those who didn’t. Call of Duty introduced season passes to their games with Black Ops 2, and have kept it up all towards their newest title, Call of Duty: World War 2.

call_of_duty_ww2.jpg

In most of their games, their season passes included access to the new maps, then splitting the playerbase in two, forcing those who wanted to play with others to pay for the maps. Season passes still exist, but they aren’t as prevalent as they were around 2012 – 2014. As season passes petered off, they were replaced by the system that has now gained infamy: Loot boxes.

 

Rolling the Dice

Supposedly, the first known instance of randomised loot boxes started in 2004. Maplestory, an RPG game introduced an item called a Gachapon ticket to their Japanese servers. Costing 100 yen, players would redeem the ticket they bought at booths distributed around the game world, attaining random items. Game developers in Asia were starting to realise the value of making your game free-to-play, with microtransactions atop the title. Gamers would constantly pay to gain any advantage over their competition, and unknowingly spend more money than they would had it just been a pay-once title.

 Gachapons. Supposedly the first form of loot boxes in the video game industry

Gachapons. Supposedly the first form of loot boxes in the video game industry

Puzzle & Dragons was an Asian mobile game that offered a loot box approach and became the first mobile game to earn over 1 billion dollars from its MTX model.  It was around 2011 where the video game industry in the west started to notice this success and begin to emulate it.

One of the first popular instances of loot boxes appearing in the western world was with Valves game, Team Fortress 2. In 2010, Valve transitioned their game from a paid title, to a free-to-play one. Their reasoning was that with more players, while they wouldn’t earn a flat amount from each player, more players could theoretically buy crates and would generate more revenue. Their experiment succeeded, with Valve reporting that they experienced a rise in player count by over 12 times their original base. Over time, several other games began to follow the free-to-play model. MMO’s like Star Trek Online, and Lord of the Rings Online joined Valve in their business model, utilizing microtransactions and loot boxes to monetize their product. Other genres of the video game industry were aware of this trend, with the FIFA series from EA using a trading card system not unlike loot boxes to generate revenue. EA took this experience and incorporated it into their widely popular RPG game, Mass Effect 3. This game was considered the first packaged game to offer a form of loot box on launch, and it set a standard that many game developers would follow for years to come.

 Mass Effect 3's Loot boxes, bought either through gameplay or real-world currency. Research into the packs went to an extreme amount of depth, down to the sounds of opening packs just to ensure players would feel like they were getting value.

Mass Effect 3's Loot boxes, bought either through gameplay or real-world currency. Research into the packs went to an extreme amount of depth, down to the sounds of opening packs just to ensure players would feel like they were getting value.

Devs see, Devs do

Counter-Strike: Global Offensive is a game that nearly everyone has, selling over 25 million copies on the PC. Since it’s launch on August 2012, Valve has continued to support their game, and when they noticed the success of Team Fortress 2, they introduced their own version of Loot boxes in 2013. Similarly, Battlefield 4 also introduced “battle packs”, but they did not become purchasable till May 2014.

Blizzard’s Overwatch released in 2016, utilizing loot box systems as a major part of their post-launch monetization. It was a massive financial success, and it only reinforced the idea that Loot boxes were now the key to printing money for game developers. Since Overwatch, franchise from Call of Duty, Halo, Gears of War, and the NBA 2K series have all included this mechanic as part of their game. At this time, people were already starting to criticise loot boxes for their addictive nature, but this dissent hadn’t yet reached a critical point yet.

 Overwatch's Loot Box. surprisingly, they haven't received too much criticism. This can be attributed to the transparency of Blizzard, as well as the fact that the boxes only contain cosmetic changes to the characters, which are all unlocked

Overwatch's Loot Box. surprisingly, they haven't received too much criticism. This can be attributed to the transparency of Blizzard, as well as the fact that the boxes only contain cosmetic changes to the characters, which are all unlocked

The first game to receive a great deal of negative feedback for their egregious use of MTX and loot boxes was Middle Earth: Shadow of Mordor. Released in 2017, the game contained four different loot boxes, giving different gear according to the price of each box. In a game that was predominantly single-player focused, the introduction of loot boxes left a very bad taste any many player’s mouths. The audience turned against their game, and eventually forced the developers of the game, Monolith Entertainment to completely remove any form of MTX from the game in an attempt to appease players. However, the damage had been done, and gamers were starting to wise up to the games industry and its practices.

 

Turning the tide

The later months of 2017 was a turning point for the games industry, with the keystone being the fiasco of Battlefront 2. Discussed in the introduction, Battlefront 2 was a colossal mistake for EA. The game itself felt designed around the economy of buying loot boxes. While people expected these predatory consumer practices from mobile games that served only to suck money, people were incensed to realize that a game they had already spent a chunk of money on required even more money to really enjoy. When players voiced their displeasure, EA dug itself deeper, with their comments appearing shallow. One

developer comment on the Battlefront 2 sub-reddit which was in response to the controversy was so badly received, it became the most downvoted comment in reddit history. It was clear that the community had enough. EA was forced to temporarily remove MTX from the game, only adding them back when they were confident it wouldn’t affect gameplay.

On a smaller scale, games like NBA 2K18 and Destiny 2 received backlash from their audience due to their blatant use of MTX in their products. NBA 2K18 in particular received overwhelmingly negative reviews by the public, with the main complaints being that in order to even enjoy the game, one would need to drop even more money.

 NBA 2K18’s screen, and it’s currency system of Virtual Coins, or VC. Introduced with NBA 2K13, it has become more and more aggressive over time, to now.

NBA 2K18’s screen, and it’s currency system of Virtual Coins, or VC. Introduced with NBA 2K13, it has become more and more aggressive over time, to now.

State of the Game

Currently, there are still loot boxes present in several games. Overwatch, PUBG, Destiny 2, Rainbow Six: Siege to name a few. Most of these loot boxes tend to only offer cosmetic boosts rather than items that actually affect the core gameplay of their product. Epic Games’ Fortnite Battle Royale, which as of 2018 is the biggest game in the world offers a different form of MTX, in the form of a battle pass. The game itself is free-to-play, with the battle pass being a paid add-on, that rewards players for progressing and playing the game. Many people around the games industry saw the battle pass as a preferable evolution of microtransactions, as it rewarded gameplay, and was transparent in the rewards that one would get, rather than the randomized gambling that was loot boxes. Time will tell if more developers start to adopt this strategy.

 Fortnite’s Battle Pass. Includes both a free path, as well as a paid path. This could be the future of gaming

Fortnite’s Battle Pass. Includes both a free path, as well as a paid path. This could be the future of gaming

The future of the games industry is blurry. While there has been intense growth within the esports side, seeking to become a multi-billion-dollar industry within the next few years, gamers are starting to express fatigue with the aggressive practices of developers. Here has certainly been promise with different, less intrusive forms of MTX with examples like Fortnite’s Battle Pass, and some companies outright refusing to add MTX to their game, like CD Project Red’s The Witcher 3: Wild Hunt.

 The Witcher 3: Wild Hunt. When interviewed about their stance on Microtransactions, the developers famously stated:  We leave greed to others .

The Witcher 3: Wild Hunt. When interviewed about their stance on Microtransactions, the developers famously stated: We leave greed to others.

The underlying issue behind loot boxes is that they are primarily anti-consumer. They encourage people to buy more, in the hopes that they might get what they want, rather than simply pay to get it. This practice is similar to slot machines and gambling in their addictiveness, yet loot boxes are available for everyone, even children. These concerns have not gone unnoticed by several world governments, who’ve looked to regulate, or even ban loot boxes in China’s case. As gaming is becoming more popular than ever, gamers, and developers will have to find a balance that is good for everyone. Whether they ever find that point where both the industry can profit, and gamers are happy is a question that may never be answered.