Microtransactions Hit Games Industry and Trigger a 3X Value Bonus

This is why your favorite games became slot machines.

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Bethesda’s release of horse armor DLC for its 2006 hit RPG marked the beginning of a new era. At the time, a vocal group of alarmists argued that the stupid horse armor was a slippery slope into games being full of micro-transactions and a country where people would try to marry horses because the institution of marriage was now a sham. I guess those folks were right. According to a report from monetization service Digital River, the rise of microtransactions have led to a massive rise in digital revenue for traditional, non-free-to-play games. More than a quarter of total digital revenue on such titles comes from loot crates and the like.

The increase in revenue has resulted in the industry as a whole tripling its market value. Digital River notes that publishers are throwing money away by not running the operation with the “Games as a Service” model. It is better for the bottom line to hook a player on a single title and drip feed them over time than to hope they are willing to hop from full-priced title to full-priced title. Revenue per user is expected to double in the near future and more publishers push their offerings in this direction. Scmhlerpff. That was the sound of the money vacuum being installed on every game or franchise you ever cherished.

Digital River also touches on PC gaming buying habits. They report that the average PC gamer waits 21 days to buy a new release in hopes of a sale. This behavior has driven the rise of third-party key resellers. Digital River implies that all of these keys come from using stolen credit cards or other types of fraud and that publishers would prefer piracy over the losses incurred from said fraud.

Contributing Tech Editor

Chris Jarrard likes playing games, crankin' tunes, and looking for fights on obscure online message boards. He understands that breakfast food is the only true food. Don't @ him.

From The Chatty
  • reply
    October 13, 2017 8:40 AM

    Chris Jarrard posted a new article, Microtransactions Hit Games Industry and Trigger a 3X Value Bonus

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      October 13, 2017 8:47 AM

      'games as a service' makes my tummy hurt and my head spin.

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        October 13, 2017 8:50 AM

        It wasn't a problem with MMO's, we understood why we were paying a monthly fee then. It seems more problematic when they mix this into games that don't fit that model.

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          October 13, 2017 11:42 AM

          except a lot of games are expected to have similar features, like DLC content and dedicated servers

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            October 13, 2017 12:16 PM

            I remember a day when server software was given out so 'dedicated servers' didn't cost extra.

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              October 13, 2017 12:16 PM

              that's nice and all, but how would that work on consoles?

              • Zek
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                October 13, 2017 12:54 PM

                Consoles are going to be always online sooner or later. MS just tried it too early with the XB1. On the plus side, cloud services are getting cheaper and more powerful. MS and Sony can run everything themselves if they want to.

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                October 13, 2017 1:38 PM

                A number of games allowed users to run their console as a dedicated server. I know of at least one that let PC users host a server for console users.

                The excuse that dedicated servers implies games need microtranactions is entirely untrue. After all, it was EA that started this trend (when the stopped releasing BF server software and started partnering with hosting companies only.)

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                October 13, 2017 2:11 PM

                Probably via that monthly online access subscription that everyone pays for.

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                October 13, 2017 9:03 PM

                what's a console?

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        October 13, 2017 12:52 PM

        Windows as a service hurts my brainzz

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      October 13, 2017 8:58 AM

      In the short term, maybe, but that has negative consequence in design and gameplay, the same way US TV was seriously limited by being designed around commercial break structure.

      I won't buy games that insist on being a 'service' even for single player stuff.

      I've got plenty to play, I can be choosy. It's not like sticking with things like Hollow Knight is hurting me.

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      October 13, 2017 9:13 AM

      "Digital River implies that all of these keys come from using stolen credit cards or other types of fraud and that publishers would prefer piracy over the losses incurred from said fraud." What?

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        October 13, 2017 11:32 AM

        The publishers/devs take a financial hit for credit card processing fees on fraudulent orders that are reversed.

        I'm still not sold on the idea that these sites steal all the keys. I've gotten more than a few pre-order keys days (and sometimes more than a week) ahead of release for pre-loading. I've also noticed that certain games are never available on these sites for a discount. If it was as simple as stealing credit cards and buying the game from Steam/Pubs and then offloading the keys, you'd think that any game would be ripe for the taking. I tend to think that publishers who generate thousands of keys for retail/overseas sale send them to distributors who then sell to the sites like GreenMan or CdKeys or G2A. I have no doubts that the private seller marketplaces on these sites have fraudulently obtained keys, but it can't possibly be the sole source of inventory.

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          October 13, 2017 1:00 PM

          It's not 'all', certainly, but is a thing. That said I doubt any of the ones on GMG come from fraud. More likely on the others.

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          October 13, 2017 9:17 PM

          There is basically zero chance the publishers aren't leaking the keys themselves. With the way the love to nickel and dime they would have waged a fucking holy war closing that backdoor if it was costing them money.

          It's probably an under the table deal we'll read about 15 years from now, or they using keys through a 3rd party as currency conversion or manipulation and we'll find out when people go to prison over it.

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      October 13, 2017 10:29 AM

      Damn, only 21 days? I've waited years.

    • Zek
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      October 13, 2017 12:46 PM

      Devs do this because it works, and it will always work, because the human brain loves to gamble. It's unlikely to be legislated against in the US any time soon. The best we can hope for is that the market will reject games where gameplay-affecting items are included in this. But it's not looking good for that prospect so far.

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      October 13, 2017 2:38 PM

      It seems that if you live long enough you will see everything you once loved go to shit.

      • Zek
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        October 13, 2017 7:13 PM

        That's why you need to be able to pick up new passions. Otherwise you'll just be old and miserable.

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      October 13, 2017 4:07 PM

      That was me, boss! I was that alarmist! Playin' a game here, boss.

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      October 14, 2017 12:05 AM

      I finished Life is Strange yesterday but this post is by far the most depressing thing I've seen this week :(

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      October 14, 2017 1:31 AM

      When will the Shack sell loot boxes?