In Game Purchases, the line between profit and disappointment

A recent development in game production has brought about in game purchases or microtransactions, a feature where the player can choose to use real money to pay for objects that only exist in the game. With recent controversy over these products I have decided to discuss the different advantages and disadvantages, and how to create an enjoyable experience with them. For this project we will take 4 different examples and study how they incorporate in game purchases and then look at the profits that the games have made.

Overwatch loot boxes, and their pricing

Blizzard's Overwatch:

Overwatch is a online multiplayer game released in late 2016 where it took the world by storm. Renowned for its unique visual style and specialised game play it produced a large profit. However the initial purchase of the game itself produced a only a small portion of the overall revenue, priced at 60$ it made up 3.5 billion dollars (an already respectable sum). However the loot boxes in the game provided the main profit with 4 billion dollars to a total of 7.5billion dollars and 30 million players world wide. Loot boxes are in game chests which can be obtained and opened for random items. Each of the loot boxes for overwatch cost about 1$ but, as per usual economics, buying them in bundles reduces the cost of the individual (IE 5 boxes is 5$ but 50 boxes is 40$. Each of these boxes contains 5 items that you do not already posses. The most important difference between other loot box systems and what we see here is that all of the items are cosmetic. These include different costumes, voice lines, and dances the character can use in game, but none of them have a baring on how the game is played. This means that it doesn't matter how much money you have pumped into the game, you will be just as good as the player who hasn't spent a cent. Thus customers feel like they are playing a fair game and are more likely to continue playing and buying more loot boxes. Additionally these loot boxes could be obtained fairly easily through regular play, making sure that players didn't feel left out.

EA's Starwars Battlefront 2 2017:

Released in 2017 Starwars Battlefront 2 sparked one of the largest controversies with their use of loot boxes. While the gameplay was reviewed as phenomenal, the predetorial nature of the loot boxes led to boycotting and a loss of profits. In full revenue EA made an estimated 2 billion dollars (EA wont release exact numbers), but EA as a company lost 3 billion in stocks leading to a net loss. SWBF2 cost 60$ at launch and contained loot boxes that cost anywhere from 1$-2$ each. In terms of cost this isn't to different from Overwatch but EA's loot boxes contained items that could severely change the strength of your characters. On top of this it was difficult to claim these loot boxes through regular play time. A group of anonymous gamers did the calculations and found that either you would have to pay 2,100$ to unlock everything in the game or, play for 4,528 hours (189 days of straight play). Some items weren't just advantages, but changed the way you played the game (Such as Darth Vader as a playable character). Many players felt like these items locked in the loot boxes should have been for everyone to use from the start and this let to further dissatisfaction. In the end SWBF2 only sold 9 million copies.

CD Projekt Red's The Witcher 3

For reference for increases in revenue, The Witcher 3 is a game with no microtransactions included. Priced at 60$ with 25 million copies sold, it is regard as one of the best games of our generation. However the game only made about 2 billion dollars, comparable to SWBF2. The Witcher 3 relies entirely on revenue from launch and doesn't sustain a profit post launch. However, unlike SWBF2, CD Projekt Red didn't lose stocks and has sustained a profit.

Valve's Team Fortress 2

TF2 is a bit of a strange case, originally released in 2007 for 60$, the company decided to make the game free in 2011 and instead focused on items that could be sold in stores in game and a living market place run by the players. Valves market place works by the player buying items at what they think is a fair price from players who already have items, the transaction is complete and Valve take 5% of the funds. In one year they claimed 100,000$ from this small amount. Overall the revenue (exact numbers not released) rose by 12 times its amount in 2010 after switching to microtransactions. Like Overwatch, Valve provided cosmetics, but they also gave out items which changed how you played the game. These items were not upgrades though and had their disadvantages, they simply provided the players who had been with the game for a long time a new way to play the game (these items are sometimes regarded as unfair and Valve constantly has to balance them)

What do these results tell us? Well, primarily, microtransactions will increase your profit. We can see in Overwatch and Team Fortress 2 that the revenue is drastically raised by the implementation of in game purchases in comparison to games that have no such features (Such as Breath of the Wild). However Star Wars Battle Front 2 warns us against practices that are anti-consumer. Giving straight upgrades to people who are willing to pay more and giving little to no rewards to people playing the game on top of a 60$ price tag can result in serious losses in both revenue and reputation. The easiest way to implement microtransactions is cosmetics, balancing and testing aren't required for hats as opposed to the equipment that TF2 gives out.