The introduction of microtransactions and loot crates into games has transformed the economics of the industry, leaving publishers, developers, and gamers at odds.

New content updates are regularly being added to Amazon Games’ new massively multiplayer online game (MMO), New World, and one of these features has begun to cause worry among players: microtransactions. The only microtransactions originally designed for the game were “exclusively cosmetic in nature,” according to Amazon Games Studio Director, Rich Lawrence. However, Amazon Games also intends to implement “quality of life items” which many players have voiced fears about. Streamer Asmongold shared his thoughts on the matter, saying that “It creates a paradigm that encourages developers to create problems in the game so that they can sell the solutions for them.”

In fact, New World is far from the first game to be under fire for its implementation of microtransactions, with worried users citing multiple instances of botched releases, frustrated players, and legal repercussions over the past few years. That being said, microtransactions are not going away anytime soon, and players and publishers are disputing over how games should be fairly monetised.

promotional image of amazon studios' New World four characters standing in grassland with a tower in the distance

newworld.com

What is a Microtransaction?

Game distribution platforms such as Steam offer games which can be digitally purchased for a set price. It is a relatively simple process not unlike buying a book or a movie, where you pay a fixed sum of money and enjoy the content that you paid for. While a vast majority of games are still monetised this way, with subscription-based models like EA‘s Origin Access service taking up a small part of the gaming economy, microtransactions are implemented alongside one-off purchases as a way to generate revenue.

Simply put, microtransactions are small in-game purchases that a player can make within a game, such as boosts that increase the rate at which your character levels up, and cosmetic items or “skins” that change the way your character looks. However, some methods of implementing microtransactions such as loot crates have sparked controversy in the gaming world.

The Loot Crate Economy

The weeks leading up to the 2017 release of Battlefront 2 were fraught with controversy surrounding EA’s monetisation of the game. The video game publisher decided to create an alternative stream of revenue by introducing a loot crate system, whereby completing objectives would reward players with loot crates that granted players a random chance to get the items or upgrades they needed to progress in the game. In other words, this left the acquisition of in-game items and upgrades up to chance. While this system resulted in players having to spend an average of 40 hours to unlock a single hero, players could, however, buy loot crates with real money without going through the potentially tedious process of playing as a character you do not like. Theoretically, this would indeed expedite the process, but it would also mean paying real money for a mere chance at getting an in-game item- in effect, introducing a gambling element to the game.

Understandably, players took to forums like Reddit to voice their concerns. Following the pushback and public outcry from fans, the loot crate monetisation system was pulled from the game mere hours before the official release. In short, it was damage control. The loot crate debacle eventually led to real-life ramifications regarding in-game monetisation. Belgium’s gambling authority launched an investigation regarding the ethicality of loot crate monetisation in Battlefront 2 as well as Overwatch. A state representative from Hawaii submitted bills into local legislature proposing the enactment of a law banning the sale of games with “gambling-like mechanisms” to individuals under the age of 21.

extremetech.com

What Makes a Good Microtransaction?

Microtransactions are frequently criticised as a manifestation of corporate greed, which is a claim not without merit. In particular, the loot crate economy monetises chance, in addition to capitalising on a player’s lack of free time or even poor impulse control, which is why many might consider it to be the worst offender. So, what constitutes a good microtransaction system? Warframe’s premium currency and in-game trading platform is often lauded as one of the most well-implemented microtransaction systems, due to how it allows players to attain the currency without actually paying for it with real money.

Warframe, a free-to-play “looter-shooter” developed by Canadian studio Digital Extremes, features a premium in-game currency called “platinum” that can be used to buy items such as upgrades and cosmetic items. Platinum can be purchased with real money, but it can also be acquired through the game’s trading system which players can use to trade or buy items from other players with platinum. This way, instead of simply disappearing into the nether, platinum stays in circulation within the game’s player-base, and can, not infrequently, fall into the hands of players reluctant to spend their hard-earned cash on virtual items. Criticisms of the game being at times too much of a “grind” aside, this system strikes a balance between player satisfaction and an independent studio successfully monetising a free-to-play game.

 

in-game screenshot from Warframe Plains of Eidolon DLC

playstation.com

In-game Economies

One of the most notable developments of the loot crate economy is the creation of scarcity. Some microtransaction systems allow players to directly purchase items at a fixed price, which allows the existence of as many of these items as players are able to purchase. But loot crates introduce scarcity to the equation. Some cosmetic items in games such as CS:GO and PUBG have extremely low drop-rates, but another way to acquire them is to purchase them directly from other players with real money via online trading platforms such as the Steam Community Market. This scarcity results in astronomical asking prices on the Market, with items costing up to US$1,900. Very lucky players can leverage this market to their benefit, and potentially earn thousands of dollars just by playing the game.

As such, the term “microtransaction” can be misleading, in that the “micro” aspect refers primarily to the scale of the purchased content compared to that of the whole game, rather than the price of the purchase. A cosmetic item for your character bought via the Market is a relatively small part of the entire game, which includes assets such as character models and different locations. That said, the item can be extremely expensive. One should be aware of these economies when evaluating the implementation of microtransactions.

screenshot of steam community market entry for ivory school uniform set

steamcommunity.com

Conclusion

For better or worse, the introduction of microtransactions and loot crates has overhauled the games industry. The onus is ultimately on publishers and developers to negotiate between profits and appeasing players, especially in such a way that considers ethical and legal stipulations.

 

Featured banner image from warframe.com

 

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