Both gamers and game investors are no stranger to the concept of microtransactions. Although gamers have grown to accept them as a fact of reality, the recent Star Wars Battlefront II debacle shows that there is still a line that can’t be crossed. A commentary from CNBC suggests that microtransactions--once hailed as the silver lining for profitability in the games industry--could be set for a major shake-up.
CNBC reported that an 8.5% slide in EA’s share price from month to date had amounted to $3.1 billion of lost value. Take-Two and Activision Blizzard, meanwhile, are both up, suggesting that EA’s slide is a result of investors losing confidence in it. We checked and found that EA’s share had fallen 7.8% since the start of the month. We’re not financial analysts, so we won’t attempt to state definitively if the dip is related, but CNBC noted that Battlefront 2’s first-week UK sales were down significantly from the previous game and that it has failed to enter the Amazon Top 100 list for video games.
Whereas to gamers, the controversy surrounding Battlefront II was about price gouging and pay-to-win tactics, politicians saw it differently. A month before Battlefront II’s release, a separate microtransaction controversy was brewing--whether or not loot boxes are a form of gambling. We don’t know if the outcry against Battlefront II from gamers had anything to do with it, but politicians from the U.S., France, and Belgium jumped on Battlefront II, calling its loot boxes gambling.
In response to public outcry, EA temporarily switched off in-game purchases in Battlefront II. To the politicians, EA denied that microtransactions constituted gambling because the crates can be acquired without paying and also aren’t required to complete the game. The UK Gambling Commission weighed in by saying that loot boxes aren’t gambling under UK law because in-game rewards aren’t easily convertible into real money. Those who remember Diablo 3’s real-money auction house will know that it was shut down two years after its launch, possibly for this reason. Nevertheless, U.S. lawmakers are focusing on Battlefront II because they believe it uses “predatory practices” to appeal to children.
Does all this spell impending doom for the games industry? CNBC caught up with several Wall Street analysts, including Doug Creutz who said the following:
"'Battlefront II' is the pointy tip of the iceberg. … The biggest recent controversy has centered around EA's 'Star Wars Battlefront II,' where early evidence suggests player anger over a mishandled loot box economy may in fact be impacting initial sales."
"We think the time has come for the industry to collectively establish a set of standards for MTX implementation, both to repair damaged player perceptions and avoid the threat of regulation."
CNBC’s report is an encouraging reminder to everyone to vote with your wallet. It’s what led microtransactions to where they are now, but it’s also what will stop them from going in a direction that we don’t want. The harder issue to deal with is whether or not regulation should have a hand in this. It’s certainly not the response the majority of gamers were expecting.
As Take-Two recently affirmed, microtransactions play a huge role in keeping games we like going, both from a content and monetary standpoint. Microtransactions have also had an unquestionable contribution in the increasing prevalence of free-to-play games, which have taken the lead in innovation in many aspects, such as gameplay and graphics, from AAA games.
Games like War Thunder satisfy flight sim-genre players that were abandoned by AAA game publishers, Mechwarrior: Online revived a beloved but uncertain franchise, and League of Legends feeds a thriving esports community.
On the political side of the discussion, regulators aren’t so much concerned by the pay-to-win aspect as they are with the possible addictive nature of in-game spending. Those who don’t agree that this is a problem stand to lose potential game content that they would have willingly paid for.
We’ve reached out to EA for details on its future strategy with regards to microtransactions.