How has monetisation affected gaming?

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Monetisation in gaming is becoming more frequent as game development companies look for new ways to recoup their expenses. In fact, it’s hard to think of a game that doesn’t have some sort of add-on available.

Companies justify these add-ons to help cover the spiralling costs of game development. The fans, on the other hand, feel like these costs are unfair and that they’re often being locked out of content.

But when the global revenue of these add-ons made the industry $4.78 billion in 2016 (EA made up $1.2 billion of that revenue on their own), it doesn’t seem likely that the practice will be dropped anytime soon. Especially as these adds-on made up 4% of the global revenue for the entire industry in 2016.

What started the monetisation of games?

Monetising games (beyond the original price for the base copy) started back in 2006, when Bethesda Softworks released the now infamous horse armour DLC for Elder Scrolls: Oblivion. For £1.50, or £2 worth of Microsoft Points, you could clad your horse in some pretty armour. It had absolutely no effect. It was purely cosmetic.

The idea of microtransactions had been put forward by Microsoft a year before, in 2005, and it seemed like a fairly good idea. It would allow players who couldn’t afford bundles of content to buy small pieces for anywhere between £1 and £5. You wanted that super-cool gun but didn’t want to pay £15 for the rest of the stuff that came with it? Pay £2 for the gun on its own.

So why was the horse armour so controversial?

Well, Bethesda Softworks were the first third-party developer to use the idea, and fans were outraged at the pricing; aside from the first set of armour, you had to pay for each piece of armour individually. Players were used to paying similar prices for entire maps and side quests.

However, despite the anger around it, gamers bought enough of the horse armour DLC that it became one of the Top 10 purchase downloads on Xbox Live.

And thus, the seeds were sown.

How did microtransactions develop?

From that point on, microtransactions started creeping into the gaming market. And after that, it didn’t take much longer for it to seep into the mobile market. In 2006 microtransactions had broken into Korean mobile gaming and has now become a staple feature in most mobile games.

The next big change then came from Rockstar and its game L.A Noire in 2011. For this crime detective game, Rockstar released something called the ‘Rockstar Pass’. This gave players access to four new missions, two new outfits and a challenge mode. The Pass was sold for £10 and buying each piece separately would cost you £15.

At the time, it seemed like a good deal. You got all of this new content for a reasonable price. It expanded your game and increased its length.

Then the practice started to become more and more common. By 2016, a quarter of all digital revenue from PC games with an upfront cost came from additional content.

In no time at all, gamers were accusing gaming companies of locking content behind a paywall. How was it fair that you had to pay around £50 upfront and then a further £20 for a portion of the game that was probably already developed when the game was released?

Recent examples of this anger can be seen from the communities of Destiny 2 and Call of Duty: Black Ops 4.

But at least with DLC and Season passes you knew exactly what you were getting…

Could it get worse?

Yes, it could.

The newest addition to gaming add-ons are loot boxes. What are loot boxes exactly? To put it simply: gambling. You pay a certain amount (in Overwatch, for example, you pay £1.59 for two boxes) and then you get random rewards.

A prolific example of this can be seen in FIFA: Ultimate Team. You buy coins from the FIFA store, which you can then spend on packs, and you’re then rewarded with football players. The more expensive the pack, the more likely you are to get a better player – not that it’s guaranteed. After all, what you receive from the pack is random.

As of this year, Belgium and the Netherlands have officially declared loot boxes as gambling and that they couldn’t be sold to those under 18, and therefore, games like FIFA 18, Overwatch and Counter Strike: Global Offensive were illegal. A statement from the Belgian Minister of Justice, Koen Geens, demanded that their loot boxes be removed. If they didn’t, the publishers “risk a prison sentence of up to five years and a fine of up to 800,000 euros.”

Star Wars: Battlefront 2 was nearly subjected to the same ruling, but EA removed the lootbox mechanic from the game.

The main concern of governments is that lootboxes take advantage of young children, and that mixing gaming and gambling at a young age is bad for their mental health.

Are there any benefits to loot boxes/DLC/Season Passes?

This depends on your point of view. If you look at this directly as a consumer, then no, there aren’t any real benefits.

Gaming companies and developers would look at it differently, however.

Firstly, games are more expensive to make than ever before, (though some would point out that budgets and profits have risen to meet that demand), so they would argue that the money for these bigger budget games have to come from somewhere.

Developers now also provide patches throughout a games life-cycle and the companies often need servers to support the online aspects of games, which also incur costs.

The existence of DLC, Season Passes and lootboxes are mechanics that keep people playing longer and extends a games lifespan. The longer people play the more money they make.

So by spreading the increased costs over time and through multiple avenues, it keeps the cost of the initial game down, meaning those who might not be able to afford a £80 game can still play the newest titles.

What does the future of monetisation in games look like?

While microtransactions are nearly universally hated in the Western world, this does not hold true for the Eastern markets. Many of these players are now used to the pay-to-win structures and the microtransaction climate.

And the Chinese have the biggest games market of them all. It was estimated to be worth $29 billion in 2017, which is a quarter of the entire gaming industries worth. In 2016, 88% of the nation’s $13.1 million PC market was made up from microtransactions. That’s a huge amount.

So, while anyone reading this article is likely to wish gaming add-ons would be wiped off from the face of the earth, the reality is – microtransactions are probably here to stay.