Nickels, Dimes And Quarters

The video game industry is just that. An industry. Which means that it exists in a capitalistic world. You know, a free market. A place where you're welcome to spend your money on whatever you please… or to refrain from spending that money.

Those companies that put these products out? They're for profit businesses. They exist to produce, market, and ship great games ultimately for one purpose. First, for money, then, for acclaim.

And when those companies are publicly traded on the stock market, they're forced to answer to their shareholders. This means that they need to make a lot of money in order to increase the value of the shareholder's stock. Every quarter.

Adjusted for inflation, your average video game is actually cheaper than it ever has been. Never mind the ratio of the hours of joy you get from a game per dollar compared to film.

To produce a high quality game it takes tens of millions of dollars, and when you add in marketing that can get up to 100+ million. In the AAA console market you need to spend a ton of cash on television ads alone, never mind other marketing stunts, launch events, swag, and the hip marketing agency that costs a boatload in your attempts to "go viral" with something. Not only is the market more crowded than ever but your average consumer has many more entertainment options than ever before in the history of humanity. (Hell, when levels are loading in our games my wife and I read Twitter and Reddit.)

Another factor to consider is the fact that many game development studios are in places like the San Francisco bay area, where the cost of living is extraordinarily high. (Even Seattle is pretty pricey these days.) Those talented artists, programmers, designers, and producers that spent their time building the game you love? They need to eat and feed their families. (Something that the hipster/boomerang kid generation seems to forget all too often.)

I've seen a lot of comments online about microtransactions. They're a dirty word lately, it seems. Gamers are upset that publishers/developers are "nickel and diming them." They're raging at "big and evil corporations who are clueless and trying to steal their money."

I'm going to come right out and say it. I'm tired of EA being seen as "the bad guy." I think it's bullshit that EA has the "scumbag EA" memes on Reddit and that Good Guy Valve can Do No Wrong.

Don't get me wrong. I'm a huge fan of Gabe and co. and most everything they do. (Remember, I bought that custom Portal turret that took over the internet a while back and I have friends over there.) However, it blows my mind that somehow gamers don't seem to get that Valve is a business, just like any other, and when Valve charges $100 for an engagement ring in Team Fortress 2 it's somehow "cool" yet when EA wants to sell something similar it's seen as "evil". Yes, guys, I hate to break it to you, as awesome as Valve is they're also a company that seeks to make as much money as possible.

They're just way better at their image control.

Making money and running a business is not inherently evil. It creates jobs and growth and puts food on the table. This country was built on entrepreneurship. Yes, there are obvious issues around basic business ethics (Google "Pinto Fires") and the need for a company to give back to its' community, but that's not what this blog is about right now.

People love to beat up on Origin, but they forget that, for a good amount of time, Steam sucked. No one took it seriously for the first while. Years ago, when Gabe pitched it at GDC to my former co-workers they came back with eye rolls. (Who's laughing now? All of Valve.) It took Valve years to bang their service into the stellar shape that it is in these days. Yet somehow everyone online forgets this, and they give EA crap about trying to create their own online services. Heaven forbid they see our digital roadmap for the future and try to get on board the "games as services" movement.

I remember when the rage was pointed at Epic when we allowed users to purchase weapon skins in Gears 3. I replied to an enraged fan on Twitter that "You're more than welcome to not buy the optional cosmetic weapon skins that will make you more visible to the enemy." And you know what? In spite of the uproar, people still bought plenty of them. (I've seen the numbers.)

If you don't like EA, don't buy their games. If you don't like their microtransactions, don't spend money on them. It's that simple. EA has many smart people working for them (Hi, Frank, JR and Patrick!) and they wouldn't attempt these things if they didn't work. Turns out, they do. I assure you there are teams of analysts studying the numbers behind consumer behaviour over there that are studying how you, the gamer, spends his hard earned cash.

If you're currently raging about this on GAF, or on the IGN forums, or on Gamespot, guess what? You're the vocal minority. Your average guy that buys just Madden and GTA every year doesn't know, nor does he care. He has no problem throwing a few bucks more at a game, because, hey, why not?

The market, as I have previously stated, is in such a sense of turmoil that the old business model is either evolving, growing, or dying. No one really knows. "Free to play" aka "Free to spend 4 grand on it" is here to stay, like it or not. Everyone gets a Smurfberry! Every single developer out there is trying to solve the mystery of this new model. Every console game MUST have a steady stream of DLC because, otherwise, guess what? It becomes traded in, or it's just rented. In the console space you need to do anything to make sure that that disc stays in the tray. I used to be offended by Gamestop's business practices but let's be honest…they're the next Tower Records or Sam Goody. It's only a matter of time.

Remember, if everyone bought their games used there would be no more games. I don't mean to knock you if you're cash strapped — hell, when I was a kid and I had my paper route I would have bought the hell out of used games. But understand that. when faced with this issue, those that fund and produce those games you love have to come up with all sorts of creative ways for the business to remain viable and yes, profitable.

Saying a game has microtransactions is a giant generalization, really. It is an open ended comment. What can you buy? Can you buy a cosmetic hat? Or can I spend a buck to go to the top of the leaderboard? Can I buy a bigger gun? What about gambling? (It's like saying a game is open world; that could mean GTA, Assassin's Creed, or heck, even Borderlands.) Which one do you actually mean? Do Zynga's practices often feel sleazy? Sure. Don't like it? Don't play it. Don't like pay to win? You have the freedom to opt out and not even touch the product.

If you truly love a product, you'll throw money at it.

No one seemed too upset at Blizzard when you could buy a pet in World of Warcraft–-a game that you had to buy that was charging a monthly fee. (How dare console games have steady cycles of buyable DLC!) When I was a child and the Ultimate Nintendo Fanboy, I spent every dime I earned from my paper route on anything Nintendo. Nintendo Cereal. Action figures. Posters. Nintendo Power. Why? Because I loved what Nintendo meant to me and I wanted them to keep bringing me more of this magic.

People like to act like we should go back to "the good ol' days" before microtransactions but they forget that arcades were the original change-munchers. Those games were designed to make you lose so that you had to keep spending money on them. Ask any of the old Midway vets about their design techniques. The second to last boss in Mortal Kombat 2 was harder than the last boss, because when you see the last boss that's sometimes enough for a gamer. The Pleasure Dome didn't really exist in the original Total Carnage. Donkey Kong was hard as hell on purpose. ("Kill screen coming up!")

I've been transparent with most folks I've worked with in my career as to why I got into this business. First, to make amazing products — because I love the medium more than any. Second, to be visible. I enjoy the notoriety that I've managed to stir up. And finally, yes, to make money. Money doesn't buy happiness, but it sure is a nice lubricant when you can take that trip you've always wanted or feed your family or pay your bills on time.

And that brings me full circle to my main point. If you don't like the games, or the sales techniques, don't spend your money on them.

You vote with your dollars.


Cliff Bleszinski is a game industry veteran. He blogs on Tumblr and can be found on Twitter at @therealcliffyb Republished with permission.


Comments

    That was a brilliant article, truly brilliant. Particularly liked this part:

    No one seemed too upset at Blizzard when you could buy a pet in World of Warcraft–-a game that you had to buy that was charging a monthly fee. (How dare console games have steady cycles of buyable DLC!)

    I myself played WoW for six months at first then gave it up when I realised the scam it was. Paid 100 to begin with at release, then keep paying month to month? No thank you sir. I have zero issue with DLC as long as its quality. It can be gun packs, it can be costume packs, it can be levels. If it's quality design, I'm ok with it. However if it's half arsed crap, then I'm not ok with it and I'm going to make my opinion vocally known and yes, I will vote with my dollars like you said. Which is ultimately the best way to do it.

    I may be a 'vocal minority' but I don't care. I boycott EA. I won't sent them another cent, not since I bought Battlefield 3. I don't like their business practices and I won't support them, even if it means I miss out on some games that I really wanted to play.

    Very nice article. I'd love it if the valve nuts took what was said on board. I don't understand the "Valve can do no wrong" mentality. They're no different than any other game company. The only difference is that they're a private entity.

    The consumer base is full of double standards, and unfortunately if the company has a good standing in the community, they can get away with things everybody starts rioting over when EA, for example, does the same thing.

      I'd love to see the reactions if Valve suddenly collapsed for some reason (Gaben flees to Thailand with the company fund to live out his days on a pad Thai and ladyboy bender?) and no one could play the games they spent all their money on. I have no major issue with Valve but they are quite happy to sell you a game that doesn't work and refuse a refund (hello Vampire:The Masquerade taunting me in my game list) and there's the numerous error messages I've received about unable to connect to Steam

        I just honestly don't get what people see in Steam. It's slow and buggy, itself and games take forever to open, the prices aren't even competitive anymore, and as long as they're private they don't have to answer to anyone.

        I don't really like it, but I would even say that Origin is more pleasant to use.

          Steam runs quick as shit on my system.

        Isn't Vampire an Activision property? Going by wiki, Valve (via Steam) just distributes it. Same as a couple of other distributors. If that's the case, asking Valve for a refund would be like asking a courier for a refund of a bad product. Although, I see it's a Source engine game so if no Source games work on your computer then you might have a case. The error messages are weird. Neither my windows or linux steam installs had any problems (except no overlays on linux)

    I don't like these arguments, but here's another one: try and get a game project funded without it having micro-transactions...

    If only there were some games made between the late 80s and 2010 that were free of DLC and Microtransactions that we could hold up as examples.

    I guess Cliff is right though, games have always been made to nickel and dime us.

      If they could easily provide DLC and micro transactions back then you can bet your ass they would have.

        I don't think they "Easily" provide it now, they just don't give a damn about screwing their customers.

        I don't see how making us install several different applications in addition to the game is easy.

    Whatever happened to just making a profit? All corporations are worried about now is 'Profit Growth!' And look what happens. If a product/company/corporation does not show year over year growth, it gets shut down - even though the company is still in profit! And that is why businesses are shutting down left-right and centre.

    It's the old Starbucks scenario. Starbucks buys up all local coffee shops in an area. Replaces them with their own stores. The stores profit growth lowers over time. They shut down their these stores. Leave the area. No coffee shops left.

    Profit means you made more money back then you outlayed in the beginning. That is why there used to be businesses that lasted 40yrs in the old days, because making a profit meant your business was successful. Now most businesses are lucky if they last 3-months.

    All because Profit is not enough for greedy business men. They want MOAR Profit!

    Last edited 02/03/13 3:56 pm

      You just swooped right past the entire point. THE POINT of a business is to achieve positive growth. Businesses can't stay stagnant. How do they better things if they're stuck with the same amount of money every year? If there is no profit growth, investors start losing confidence, so businesses are forced to act.

      That last line you wrote tells it all. You have no idea how a business actually works. If you want to find out why it's important, buy some shares and invest yourself in a business. You'll soon understand why they make the decisions they do. If you aren't a stakeholder in a business, you have no right to tell them what you think is going on.

        I think the problem we have is that everyone wants short term profit. Most CEOs don't give a damn about the company in the long term as long as they look good.

        I think that this kind of thing will be bad for the industry long term. I know the amount of companies whose games I purchase is dropping each year.

        And you miss my point entirely! You sound like a reply-bot who just repeats what you've heard.
        I say you have no idea how a business actually works, as you cannot see outside the box. You do not even have an opinion on the subject...

        The fact is businesses are getting shut down, if they do not show year-over-year growth, even though that same company could of doubled their profit the next year - they do not get that chance anymore!

        Like I said. Just making a profit is not enough anymore!

        Indefinite growth is entirely unsustainable, too many companies focus solely on expansion and profit growth, not enough on consolidating the position and advantage that they (may) have.

    There are actions I find a little more despicable than most, and perhaps it's hypocrisy on my part but I don't mind purchasing the Season Pass for DLC for Borderlands 2, and I don't mind them selling some skins and heads for characters that I will probably never purchase. But I absolutely despise EA selling in game materials in Dead Space 3 a game I will never play (Not a fan of Dead Space series). And I don't buy the we want to bring mobile gamers into the fold and they expect that in a game. I do believe somebody somewhere said I bet we can sell them stuff they could find on their own.

    Just a note about EA, I don't despise EA merely some of their practices. EA gave me a lot of good times back in the day with Road Rash, Skitchin, Skate or Die and the Strike series. EA is like your childhood friend with whom you've grown apart from and can't stand the person they married. I want the new SimCity, but I don't want to purchase another game with always on DRM.

    It's kind of a moot point but, my PC needs some serious work; a new everything (Except Keyboard and Mouse).

    The central mistake here is seeing "image" or "PR" as something essentially separate from the pricing structure. They're not. Valve generated community goodwill through a commitment to quality, by creating engaging, immersive worlds, and by managing ittheir fans with (for the most part) honesty and genuine enthusiasm. They were then able to trade on that goodwill to get over the bumps and false starts of Steam. They have since continued to build goodwill through policies such as ridiculously long programs of free DLC.

    When EA or Ubisoft cry foul because the community won't extend them the same goodwill, they're simply being immature. Every time they generate the slightest goodwill by creating a quality product or an innovative new IP, they immediately burn it with nonsense like annual release cycles and exploitative DLC plans. They've got no love in the bank and they're unwilling to accumulate any.

    "To produce a high quality game it takes tens of millions of dollars"

    I can point you to dozens of different games that I think were of a much higher quality than Gears of War 3 that certainly didn't take tens of millions of dollars to make.

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