At some point two years ago, an accountant at Activision must have looked at the multiplayer user figures for Call of Duty and thought, "Oh my God, what have we done?" So far, gamers have spent 25bn hours playing the CoD titles online, and what does the company make out of that? Nothing at all. Customers pay £45 for a copy of the game, and apart from map packs, that's it. Multiplayer is effectively free – or at least the sort of astonishing value that makes accountants wince.
Each time talk of micro-transactions comes up, fans revolt and publishers back off. Call of Duty: Elite attempted to add a premium layer to the multiplayer experience and micro-transactions were prodded forward in limited quantities for Black Ops 2, but mostly the traditional industry giants have stayed well clear, fearing any bad PR.
Enjoy it, because those days are over.
Heist anxiety
This week it was revealed that Grand Theft Auto Online, the much-anticipated multiplayer mode for GTA V will feature micro-transactions. Players will be able to complete in-game missions, heists and races to accrue cash to buy weapons, cars and houses. However, they'll also be able to use real money to buy in-game cash bundles. According to a report in Eurogamer, there are four cash cards available. The cheapest, £1.99, gets you $100,000, while the most expensive, at £13.49 gets you $1.25m.
In a post on the Rockstar news site, the company clarified the offer:
The game and its economy have been designed and balanced for the vast majority of players who will not buy extra cash. There is no in-game paywall and nothing that should disrupt the balance of the game. You don't have to spend real money to attain the cars, guns, clothes, flash and style of a high-roller in Los Santos, but can if you wish to get them a little quicker. The economy is balanced differently from the single-player economy, and cash earned in one cannot be taken over to the other. Most players will earn cash much faster online than in story mode.
What Rockstar seems to be saying is that its IAP (in-app purchase) model is not offering the dreaded "pay-to-win" scenario, in which gamers are able to buy their way to success. Weapons are priced more highly in the online mode than they are in single-player, and the suggestion is that just a few hours of play will get you to a position where you can afford the most desirable items of mass destruction.
What Rockstar doesn't want to confront its fans with is the standard grind v gold dynamic offered in many smartphone and free-to-play titles, where players become so bored of the process of earning in-game currency (a process commonly referred to as grinding) that they succumb to an IAP.
Rockstar has also made it clear there are no false barriers in the game, no sections that either explicitly or implicitly require in-game payment. The design team knows this is a key suspicion with F2P titles like Candy Crush Saga, in which certain levels appear almost impossible before an in-game power-up is purchased.
Change reactions
Reactions have been … mixed. The first comment under Eurogamer's news piece reads, "Yet more disgusting price gouging for the dumb sap masses to lap up. I guess more than $1bn isn't enough for them". So far, 181 other readers have agreed.
But the thing is, we're going to have to get used to it. "Monetisation through micro-transactions is here to stay and we expect substantially more use of this model in console games in the coming months and years," says Piers Harding-Rolls, head of games at media analysis firm, IHS Electronics and Media.
"While there are an increasing amount of freemium games on consoles, we expect a significant amount of console games to monetise through both retail sales and micro-transactions, which is different from the free trend on app stores and the web."
Already we're seeing that Rockstar isn't alone. Ubisoft is adding micro-transactions to its Assassin's Creed titles, and Jade Raymond, head of the publisher's Toronto studio told the Guardian earlier this year that IAPs and free-to-play models were unavoidable for the industry going forward.
EA has placed micro-transactions into Mass Effect 3 and, even more controversially, Dead Space 3, which allows players to bypass the scavenging mechanic and to pay for custom weapons. Earlier this year, the company's chief financial officer, Blake Jorgensen, had to backtrack from earlier comments indicating that EA was putting IAP capabilities into all forthcoming titles.
Generation gain
So why is this happening? If there's a furious kneejerk response from gamers to the idea of console micro-transactions, why are publishers insisting on experimenting with them?
There are two answers. First, is that there's a whole new generation of gamers emerging who have been brought up on free-to-play and IAP models thanks to the huge popularity of smartphone games and free online MMOGs. The kids playing Clash of Clans and Maple Story just expect to pay like that. Supercell reportedly generates a million dollars a day from its IAP-funded titles, CoC and Hey Day.
Justifying the micro-transations in Dead Space 3, the game's producer John Calhoun told CVG, "There are action game fans, and survival horror game fans, who are 19 and 20, and they've only played games on their smartphones, and micro-transactions are to them a standard part of gaming. It's a different generation."
It's a view confirmed by industry analysts. "Commercial models are ultimately the product of consumer demand," says Nick Gibson at research company, Games Investor Consulting. "In a free market, no producer or vendor can push an unpopular model indefinitely and with impunity. Coin-op, pay-per-play, pay-per-minute and even mandatory subscription models have all suffered as gamers have rejected them in favour of what they perceive as more acceptable alternative models.
"Freemium and micro-transactions have become the standard in MMOGs and mobile games, in particular those aimed at mid-core and hard-core gamers; and in spite of the vocal opposition from one corner of this player base, these games have tended to thrive not just in revenues, but, crucially, also in user numbers and usage."
Some argue that F2P and IAP models, though fine in the smartphone and web sectors, won't get past console gamers. There's a theory that consumers will resist the idea of paying £45 for a boxed product and then paying more for in-game items. But quietly it's happening.
Ever sense the introduction of digital downloads, gamers have been happily purchasing DLC in the form of map-packs, add-ons and extra missions – this is effectively the gateway drug. Now, we can look at the huge success of Fifa's Ultimate Team mode, which cleverly adds an IAP model to a separate mode within the purchased game, effectively ghetto-ising the mechanic. According to EA, Fifa 13 has made $70m (£43.6m) in digital revenue since its launch, much of that coming from the Ultimate Team mode. Try telling them there's no audience for this concept.
Money talks
Which leads us onto the second reason this is happening: revenue. Think back to that Activision accountant. He knows that developing post-release content for games and providing a taut, functioning multiplayer service, costs millions of dollars a year – and it's all being given away for free. There will be shareholders looking at those figures, scratching their heads and asking: "Erm, isn't there anyway we could monetise these 25bn hours of play?"
Sure, this looks sort of greedy when you think of titles like GTA and Call of Duty that make billions of dollars anyway. But for games further down the ladder, that may cost tens of millions to develop, with less guarantee of success – well, monetising their post-launch content seems like a pretty good idea. It may even take some of the risk out of experimenting on new and original IP.
And the console manufacturers know this – which is why the Xbox One and PS4 are both set-up to allow micro-transactions and free-to-play releases at a systemic level – and both will offer free-to-play titles at launch.
"The current generation of consoles were conceived and designed around an outdated model of a static, unchanging game that was jammed in to a disc and sold on a shelf," says game designer and analyst Will Luton, author of XXXX, a book on free-to-play mechanics. "In the time since the Xbox 360 and PS3's launch, both social web and mobile has shown that physical product pricing isn't the only or best way to generate revenues.
"So there will be a big cultural move towards IAPs in the next console generation and even full free-to-play models – it's inevitable. From a business point of view, allowing your most dedicated fans to spend beyond the ticket price of the game makes sense and for fans that will likely mean a stream of new content for them. Console devs want to do this and the platform holders are obliging, slowly. DLC is the awkward half-way house, full micro-transaction games are the next step for console."
Really, it's going to be all about implementation. As EA has shown with Fifa, adding a well-designed option to an already popular games is a smart Trojan Horse approach to the IAPs. Another, of course, is to build interesting little original titles around the model – hence Ubisoft's Mighty Quest For Epic Loot.
Unlike Microsoft, which stormed into the industry earlier this year, promising to revolutionise the way we bought games with Xbox One, only to make swift reversal, the traditional publishers will continue to probe away, looking for chinks in the outrage armour of gamers. Because for them, allowing an audience 25bn hours of free access just isn't good business sense – especially not in a new console era which will likely add many millions to stretched development budgets.
For developers, the headaches will be around balancing systems, making sure players can't pay to win, ensuring we never end up with fans being expected to hand over real cash for horse armour. But then, for game designers, there are always restrictions and structures in which to create content – that's what they do. And increasingly, the money men are going to be demanding a better return on the substantial investment required by AAA titles.
"While the costs and risks of developing and publishing console games continues to rise and while gamers offer only vocal resistance and little by way of financial resistance to these models, the industry will continue to push the boundaries," concludes Gibson. "Micro-transactions, whether applied to free-to-play titles or to premium titles, will likely form an increasing part of the console market's future.
"How important a part will ultimately depend on consumer demand – i.e. how gamers vote, not with their voices, but with their wallets."
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Source: Tablet Android
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