Good news for gamers - microtransactions are due to die down in 2018! Such are the conclusions of Doug Creutz - an analyst with the investment banking firm Cowen - who says that the smart money is on game developers dialing back their efforts to push microtransactions as a means of profit-building in the year to come.
Microtransactions, the in-game purchase of virtual goods with real money, has becoming increasingly prevalent in recent years. First appearing in free-to-play mobile phone games such as Farmville and Candy Crush, recent years have seen microtransactions incorporated into console game series such as Guitar Hero Live and Deus Ex. Microtransactions, it should be noted, differ from traditional downloadable content (or DLC) in that they typically offer players a concrete advantage over other players, such as better weapons and armor, verses the different costumes and character skins commonplace to traditional DLC.
Game Informer first reported on Creutz's findings, which are based on an analysis of gaming company stock prices in the wake of various key releases. Creutz specifically cited drops in the value of Electronic Arts stock following the release of Star Wars: Battlefront II and Activision stock prices dropping after the release of Destiny 2. While Creutz acknowledged that Destiny 2 had other reasons for attracting the ire of gamers (i.e. a buggy product on release day), he still pointed to consumer backlash against microtransactions as a key factor in player dissatisfaction. Creutz said:
"[Star Wars Battlefront II] has pretty clearly significantly underperformed expectations and remains without a live services revenue stream, while Destiny 2 has at the least suffered some unwanted engagement attrition. We suspect that 2018 will see a pullback on industry attempts to aggressively drive [microtransaction] growth as a result."
While Creutz's analysis offers a financial perspective on the matter, it is no surprise to anyone involved in the gaming industry that microtransactions are unpopular. Recent releases such as UFC 3, FIFA Ultimate Team and Middle Earth: Shadow of War all drew fire from fans and game critics alike for introducing microtransaction-based mechanics. Most gamers are not pleased at the idea of paying full-market-value for a video game but being denied access to content that is only accessible to those with more money.
Beyond encouraging a "pay-to-win" mentality, the legality of microtransactions has been called into question. The State of Hawaii launched an investigation into Electronic Arts following the release of Star Wars: Battlefront II, fearing that the game's loot-crate mechanic - in which the players get random items from purchasable crates - might be seen as a form of gambling aimed at children. Similar concerns have been raised by a lawmaker in the United Kingdom, who launched his own investigation.
While Creutz's analysis cannot be disputed, his speculations on the future seem overly optimistic. While Electronic Arts has stepped back its efforts to push loot-crates in Star Wars: Battlefront II, it is still planning to reactivate the feature at some point following retooling. While there's a chance that stockholders may put their foot down regarding the predatory practice of making microtransactions an unavoidable part of video games, it seems unlikely so long as there are still gamers willing to pay more for bonus content.
Source: Game Informer
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