Video Game Publishers Have Come Up With Fun New Ways To Say 'Microtransaction'

What do you call it when a video game is full of items or services that you can buy with real money? Is it "games as a service"? "Recurrent consumer spending opportunities"? Or maybe PRI (Player Recurring Investment)?

Yesterday, publishers Ubisoft and Take-Two held quarterly financial earnings calls, which gives us a good opportunity to peek into the minds of the folks in charge of both companies. It may not surprise you to hear that their priority, like other big publishers, is to get people spending more than $US60 ($79) per video game.

Here's Strauss Zelnick, the CEO of Take-Two, which owns Rockstar (Grand Theft Auto 5) and 2K Games (Bioshock, Borderlands, NBA 2K) (h/t Gamasutra):

"We've said that we aim to have recurrent consumer spending opportunities for every title that we put out at this company. It may not always be an online model and it probably won't always be a virtual currency model, but there will be some ability to engage in an ongoing basis with our titles after release across the board."

Does this mean the next Bioshock will have plasmid loot crates and "Both Sides Are Bad" downloadable content? Probably!

Ubisoft, meanwhile, calls it Player Recurring Investment, and it's what's now making up over 50 per cent of the publisher's digital revenue:

Via Ubisoft earnings slideshow

There's a simple truth in this slide, and it's one that many Kotaku readers might find unsettling: Microtransactions are huge because people are spending money on them. And they're only getting bigger.

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Comments

    Of course they're huge, you have no choice but to buy them if they're your only option!

      BULLSHIT. There is ALWAYS the option of not buying this crap. Stop proving these asshat publishers right FFS!

        Dead Space 1 had suits you could buy. They weren't required to beat the game because the game was properly balanced.

        Dead Space 3 made an economy out of microtransactions, they expected you to buy resources so that you could beat the game. There were many moments in the game where I thought I needed to buy loot boxes in order to level up my weapons to beat the enemies. It was only through sheer determination (and abusing the A.I.) did I actually manage to beat the game without them. Considering my skill level from 30 years of gaming I can't see how someone of lesser skill managing to get through the game without wasting their money.

          I don't know why you needed to buy resources for DS3. I got enough from the bot things and once you get the effect that freezes thing in place for your guns.. stasis? the game becomes very easy

          Really? I didn't think it was that hard. I didn't spend a cent (and this was before I got riled up about microtransactions in games) and nailed it. It wasn't hard it was boring, sadly. Anyhow, I've been guilty of purchasing them especially in f2p (I'll purchase what I think devs have earned in regards to the quality of the game and not a cent more) but never have I played a game where I felt "damn this is impossible to beat without coughing up". Maybe I've just been lucky in my game choices, maybe I'm better at games than I thought (though I doubt it). But the day I truly get stumped without MT's is the day the game disc learns to fly out my window. There is ALWAYS an option.

      Just stay away from the games that employ them so egregiously.

    And, like every other awful practice in the industry, we, the players will get used to it. It will cease to be a big deal. We will accept it, bend over and say "Thank you sir, may I have another?"

      No deal. I refuse to accept this crap. Never paid for loot crates ad never will.

      Make a stand!

        "What? Over? Did you say "over"? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!"

        Sorry... had to continue the Animal House theme.

      Only ever bought crates for Rocket League, at this point they're a necessarily evil. Budgets for games have exploded, yet prices haven't gone up in over a decade. If you want to keep paying $80 for games then this is the reality. Good luck fighting it.

        That is bull. sure games stayed the same price, but the amount of units sold, sponsorships and deals make them easily earn everything back. Games are expensive to make? Why do they need to be so expensive? Just because they need to be? Enough devs prove that a game does not need nearly 10 million dollars to be good.
        Let's not forget that they also bassicaly don't pay a cent in taxes, and there is a good chance they pay for less taxes then you do by going to tax heavens.

      It's only a matter of time before loot crates become a political or legal issue.

      It's already happened. I'm hopeful that they become so popular amongst publishers/frustrating amongst gamers that Sony or Microsoft realise that they can capture a huge chunk of the market at their next console launch by regulating the use of microtransactions. I'd buy a PS5 or an XBOX Zero in a heartbeat if they enforced a marketplace rule along the lines of 'a game can have a retail price tag or microtransactions, not both'.
      They'd lose a cut of the microtransaction but sell a mountain of consoles.

    I call it "bullshit", but I'm not really across all the proper financial terminology.

    Well it wouldnt go so well if they called it "Wallet Rapeing" or "Player Content Extortion" or "Faux Gambling Manipulative Sales"

    Macrotransactions, they can end up costing more than the game, which itself becomes the microtransaction.

    I remember the good old days when people hated Season Passes - only buying half a game and some such. Pushing $60 games to $120+, because really you're buying a game intentionally crippled to make after-sales. Whats worse, if you buy the base game but not the Season Pass at launch, you're punished later as the Season Pass never gets discounted, only the full game + Season Pass bundle.

    The idea of "loot crates" is hardly new, they're no different to the "lucky dip" at your school fair 50 years ago. An awful practice even back in those days.

    The only "microtransaction" I've paid for has been in Path of Exile, a game free to play that has been constantly updated over the past several years. Nothing that impacts the game, just cosmetic and extra stash options. For the hours of fun I've had with that game, the amount of money I've spent on cosmetics is pretty minimal, but they must be doing something right to keep the game updated all the time. For free. No "lucky dips", you know exactly what you're getting for your money before you buy.

    If other companies adopted this kind of method - cosmetic items rather than gambling-equivalent lucky dips, and used this to finance addon packs to the game rather than Season Passes doubling the retail price and penalising day-one buyers, there wouldn't be anywhere near as much hate surrounding them. At least from me anyway ;)

      I don't have a problem with 'Season Passes' if they're closer to the Witcher 3's Expansion Pass. None of the terrible implentations come to mind, maybe the first Destiny Season Pass? It felt like bad value but it was additional missions that they worked on after the main game released.

        I think Witcher 3 is the exception to every rule, great post-game content and regular discounts.

        Destiny is a weird one. The game was void of content for so many reasons that I doubt we would have got more if they didn't release DLC. I'm sure they invested heaps of extra money into development because they planned on getting it back by selling DLC, so it's more a case of not making enough content for a full priced game and not making enough content for DLC.

        It's impossibly hard to judge because the price tag on the box and the amount of content doesn't convert into development costs in any meaningful way. Prices don't deviate more than $20 each way no matter how much the game cost to make or how much content is in it. If we're looking at raw money invested vs game price Destiny is a fantastic deal.
        If I spend $20 million on a game then add $5 million for DLC and build it all in one go it's all above board, but if I spend $25 million on a game while planning to have some non-critical elements carved out as DLC it's super dodgy.

        The only way to know is to get more transparency when it comes to development costs, but publishers are even less likely to do that than to get rid of microtransactions.

          I'm not so worried how the content is carved up, games get delayed and go over budget and the scope could end up bigger or smaller than originally intended.
          My main concern is whether the main game feels like a whole experience and is commensurate to the price. I also judge each piece of DLC or package of DLC on whether it feels like good value.
          I hold no ill will towards the devs/pubs if they offer something that I'm not interested in based on my perception of value; however if they misrepresent what is being offered or they try to exploit people with loot crates, I hope they get the bad karma they're due.

    There probably a definitional issue here, not all micro transactions are equal in scope and purpose. I’m sure there are some terrible examples of micro transactions around, but there might also be good examples? Loot crates aren’t the same as substantial additional story (the latter I’m happy to pay for, if I’m into a game). The fact that it’s all bundled together in the examples reported in the article (for financial reporting or analyst briefing purposes or whatever) seems unhelpful. I’d gladly pay (far) more than $60 for some of the games I’ve played for hundreds of hours.

    Games are approaching the point of being considered art.*
    The art of refining predatory practices that cement players as consumers to be fleeced.

    Only micro transaction i think I've ever paid for was the Witcher 3 DLC. Worth every penny.

      That's not a microtransaction.

        What's the difference in definition? Because at $20-30 there are plenty of microtransactions that cost more than the Witcher's DLC.

      Blood and Wine was well worth it. I enjoyed that more than the base game, and I enjoyed the base game a lot.

        Haven't finished Blood and Wine but Hearts of Stone was fantastic too!

    Who the hell is buying these microtransactions anyway? Is there are group of gamers that are too ashamed to admit they've bought this crap? I don't get it, not a single one of my friends will play the microtransaction game at all.

      I'll readily admit I have paid for microtransactions for two games. The games were TF2 and Rocket League, and I paid $30 each to show my appreciation for the developers continuing to update and add content to each game. I have spent 1500hrs total between those two and that's the only money I spent on either game.

      I'm totally uncomfortable with loot boxes being the "default" way to support the developers though. It may not technically be gambling but it pushes all the right buttons, and the reason companies like Ubisoft are making so much is because a tiny fraction of people get addicted.

      I think the "campaign passes" and contracts in TF2, and the new cars in Rocket League are a much better way for developers to continue to get money from a game. TF2 was relatively early in adopting crates. Maybe the contracts idea will take off as well.

      Because you are not the target audience for these mtx's. There is a reason they call high-spending players 'whales' and 'dolphins'. They see these customers as the big catch, the one that they want to keep hooked on their game in order for them to continue coughing up more money. They view you as nothing more than plankton or small fish: a necessary evil to keep the whales and dolphins from moving to different waters. Your presence in the game keeps the player base high enough for the whales to continue investing their time and, by extension, money into the product. You may find that there a many who play relatively casually, but earn enough money to splash some cash on a game they enjoy who have never visited reddit in their lives.

      Eurogamer published an interesting interview with a self confessed whale / dolphin. He budgeted a certain amount every week to spend on loot boxes and moved from game to game whenever he got bored. He understood it was his version of gambling and would get frustrated with games that never dropped the item he wanted or allowed bigger whales to be more powerful.

    Rockstar gets a lot of money from microtransactions in GTAV. I have never played it but I see no problem with micro transactions as long as its not pay to win. It helps the developers stay in their jobs and when done well the microtransactions can enhance a game. N i am sure the profits can then be used to develop better games?

      Got any examples of a game that has been enhanced by micro transactions?

      I have played GTA V online and it is one of the worst online experiences I have ever had, enormous grind to encourage you to spend money and they didn't even bother to pay for dedicated servers or proper matchmaking so you get to play with people from Russia with a ping of 400. Don't even get me started on the loading times between everything you do.

      It feels very very far from a premium experience.

        DC Universe Online had a good sense of community because you could pay for replay tokens to unlock raids you've already completed, but even then we were all subscribed and got like 1200 points every month anyway. We didn't really need to buy anything.

    I don't like microtransactions as a matter of general principle, and some of the practices are just appalling. That said, I bought some guns in Planetside 2. Prolly spent about $20, and played that game for several hundreds of hours. Also purchased a few ship paint jobs in Elite Dangerous. Not sure if that makes me part of the problem.

    This is the unfortunate side effect of the price of games remaining the same for twenty years whilst development costs have done anything but... as much as I LOATHE microtransactions and have never paid for one outside of Warframe (those people deserve some cash for all their hard work) I also understand why it's happened.

    Personally i'd be happy to pay another $20 for a game if it meant actually getting the whole thing, but can you imagine the outcry if there was suddenly an increase in game RRP? People already bitch and moan about the $60 ($100) cost of a game, so devs need to find other streams of income. It sucks, but at the end of the day it's a reality of making a AAA game, it's expensive and incredibly difficult, they have to pay for that somehow.

    The real issue and the one which rightfully gets people up in arms is when "recurrent consumer spending opportunities" are built into the design of the game... unfortunately there's no easy way around that outside of keeping them purely visual and non gameplay related. Dunno. There's not a simple answer unfortunately :(

      Games cost more but they also sell a hell of a lot more.

      The full price for most games these days is 60+40 for the season pass. Then games have micro transactions on top of that.

        Well but yes that's my point... that's how much i've been paying for games since the eighties. They've always sat around the $80 - $100AU RRP (let's just stick to au) price point. Do you remember when the 360 came out and they were going to try and sell them at $120? Didn't last long...

        In real economic terms games are cheaper than they've ever been, by quite a significant margin.

        Officially speaking expansions are additional content... so including that $40 (or $20 per piece of content for example) is not really part of what i'm saying, and would actually sit at about the same as expansions used to cost, when they came out at all. Thinking of ye olde apogee's and ones like blood and rise of the triad.

        I am actually trying to think of another entertainment product that has remained largely the same price in 25 years and i'm having some difficulty. Movies? lol we all now how much going to the movies costs now.. i'd say five - ten times as much. Rentals are easily more than triple the price.

        Music? Well I guess actually yes, albums sit at around the $15 - $20 mark rather than the $30 they were in the 90's, although one could argue distribution methods have as much to do with that as anything else. Although music concerts... there's another story, i remember seeing radiohead at the peak of their popularity in the nineties for $40. Now you'd be well over $120.

        Let's not even begin to talk about buying a drink at one of those concerts... oh alright let's! It's expensive and horrible. um. I guess that's about all there is to say.

        Moving on..

        Amongst all this the games industry has resisted standard inflation for a long time, for better or, as we're beginning to find out; worse.

        Again; i'm not defending the horribly anti-consumer practices endemic to microtransactions, but as consumers we also need to be aware of the realities of the business. It won't change my mind about buying them, I never will, but it's a basis upon which to build that decision.

        Cheers!

          I dont think its avoided the inflation but competition and deadstock have kept prices low, the price on a new release game at target for example is nearly always at wholesale. They make about $1 a game for preordering copies and then a week or two after release increase the price to less than rrp at $99~ hoping to pickup the extra cash from late comers then drop the price every so often or bundle it away to get rid of overstock.
          Targets model drives people to the store to buy other things same as JB-Hifi so they cop the small gain and make the money elsewhere, pricematching will never be below wholesale so most places offer it and to bad for those that dont ask for it.

          What i mean to say is it was never the devs or the publishers making money but the stores that were selling the games but when you buy a stack of games and try to make double then everyone will buy the game elsewhere cheaper and once everyone has it theres no need to buy it at rrp so youve got all this dead stock now that no one wants

      As more players turn to digital, the publishers are getting a bigger cut (70%) from the same $60($100) where they used to only get about 40%.

      Also, with digital distribution the games will provide revenue to publishers for a much longer timeframe after the initial release.

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