On Lootboxes and Microtransactions - Games as a Service is ruining the industry [opinion]

We've probably all read it somewhere, governments starting investigations into so-called loot boxes inserted into recently released games such as Star Wars Battlefront II, Destiny 2, Overwatch, Call of Duty WW2 and many other triple-A titles. But what are these loot boxes they are talking about, what’s the difference between them and say Micro-transactions and why am i stating that it's ruining the industry? We'll get right into that after this small service announcement:

I am not an authority on this topic, just a passionate gamer that has his own opinion that he wants to get out.

With that out of the way, let's dive in shall we? One topic at a time.

Lootboxes
You've probably seen the name before, heard it on some gaming website or seen it in your local media outlet. So-called Loot boxes. Incentivizing gamers all over the globe to whip out their parents credit cards and go to town in the in-game shop. But what does a loot box actually entail?

As defined by Margaret Rouse from Whatis.com:

"In video games, a loot box is an in-game purchase consisting of a virtual container that awards players with items and modifications based on chance. Loot boxes are considered to be a type of microtransaction."

• Source: http://whatis.techtarget.com/definition/loot-box

Now, one specific word that stands out here is chance. Basically, purchasing a loot box does not guarantee a certain item, it guarantees a certain amount of rewards, but the contents could be randomized. You could receive five beautiful skins that would only have a one in a million chance of being awarded, or receive five worthless items with a chance of one to five to be awarded. You cannot influence these award-rates and are basically just hoping for the best. Many consider loot boxes to be just like slot-machines: you insert your cash, pull the lever (or press the button in this case) and hope for the best possible outcome.

It becomes clear that loot boxes themselves might be fun to purchase and open but in the long run you're more likely to end up having spend $100,- on nothing but duplicate items. Most of the recent Triple-A releases build their entire revenue system around these transactions even, but we will get to that later. First we have to take a look at the other side of the purchasing possibilities: Microtransactions themselves.

Microtransactions
A micro-transaction is basically a small, one-time purchase done in an in-game shop of a game. Usually between the price of $0.99 - $9.99. While a loot box is also considered a microtransaction, lootboxes give you a random set of rewards, while a microtransaction itself gives you a fixed item of your choosing (e.g: the lootbox is the reward for the microtransaction). Still with me on that one? Good to hear, because we are about to go a bit deeper!

Microtransactions usually encompass a one-time purchase for an item of your liking. This can be a nice skin for your character, a new weapon, new skills, XP-boosts, new vehicles or even in some cases the unlocking of levels and content directly. In an ideal world, microtransactions would only sell cosmetic items. Nothing game-changing, no boosts over people who choose not to pay.

However, the controversy with these transactions comes from exactly that critical point. To what extend do game-developers and franchises allow microtransactions and what is the impact of them in-game. Is it merely for show and tell, showing off your beautiful new weapon skin? Or does the act of paying extra for an item directly affect a users experience by giving him an (debatable unfair) edge over others? Recently it seems that it's the latter, especially when we factor in the new take on video-game production that's been driving the bigger publishers lately: Games as a Service.

Games as a Service
Games as a Service is the “new” hot thing in the gaming industry currently. For those of you unfamiliar with the term “as a Service”, allow me to explain with an example from the software industry:

Software in the past used to be a one-time transaction. The software would be sold to the consumer, who would pay a one-time fee and then enjoy for the rest of its duration the perks of the software. However, big software producers soon realized that this system, while generating revenue at release, would not be a continuous source of revenue. In order to make more revenue out a customer, subscriptions or additions would be introduced. Yearly or monthly subscription fees that would generate a steady revenue-flow, moving away from the one-time transaction for an all-in-one product. Now a consumer would purchase a base product and pay for additional functionality, support and updates all along the way.

This has also caught on into the gaming industry now. Before, games would be a one-time sale where players would unlock content through actually playing the game. Unlocking for example all the skins and weapons in a game while playing without extra fees. Now, this system, much like the software example, only has a one-time transaction period in place where the publisher makes money (regardless of merchandising etc). Game studios would rely on a successful release of their game in order to make profit and be able to continue their existence at all.

However, for a big publisher it would seem far more interesting if a player continues to bring value to the company throughout a game's life cycle, rather than a one-time transaction. Wouldn’t it be far more valuable to release a game and from then onwards receive a steady stream of additional revenue based on season-passes, micro-transactions, DLC and other services? From a business perspective it makes sense. You gain a lot more value per customer in this way than when you’re limited to a single transaction moment. However, in my opinion, it is this exact service model that is ruining the industry as a whole. And here’s why:

Games as a Service is ruining the gaming industry

There, i said it. Well, i stated it in the title already but now i should arrive at a conclusion. If we factor in all elements so far, micro-transactions, Lootboxes and the "as a Service" component, we see that games have come a long way in the last year. They've evolved from being this one-time purchase, wonderful experience into a playable subscription-type service. It seems more standard these days that when you purchase a new game you should expect it to not be the full experience. Rather you buy a small part of it, a taste if you like, and from there on you are almost obliged to sink in more money to get everything out of a game. Note that i state "almost". The biggest argument the industry and some advocates of the bigger companies have is that "you're not forced to buy expansions, lootboxes or anything else".

I agree to disagree here. If you can not get the full experience out of a game due to the fact you refuse to buy an expansion, lootbox or other micro-transactions, you're left with a half-finished product. Take a look at all the games that now come out where the season-pass (again: Games as a Service) is already available upon release. You've shelled out 70+ dollars for your brand new triple A title, but please hand over another 20-40 dollars for upcoming expansions, pretty please? Of course not all games implement this but it's a telling sign that the moment a new game is released you're already pushed towards new purchases for additions and extra content, while you haven't even seen the base game yet.

It's a smart move by the companies, this system of getting as much money out of their clients from the get-go sets them up for a very successful launch of a title, boosting financial reserves and giving them momentum to actually build more cool and awesome games. But in my opinion a game-publisher should earn the right to my money by delivering quality games, breath-taking experiences and overall great entertainment. Once they've done so, i'll think about buying that DLC, or getting a lootbox or two to support your cause. But only once they've proven themselves with their work. It's not a given fact i'll hand over all my cash before I've even seen your game. Earn it.

To wrap it up: of course, budgets have grown to create games, it's more work-intensive, more resource-expensive to create top-notch games. The days of paying just over 40-50 dollar for a game or less are far behind us but i genuinely hope that in the future we will get the full value for our money again, rather than incomplete games, micro-transaction riddled horror's or simple and stale cash-cows.

But that's just my two-cents on it, i would love to hear your opinion about this road the gaming industry has been going down for quite some time. There have been signs of improvement lately, with a successful Far Cry 5 release, EA removing micro-transactions and what not. So who knows, a glorious time for gamers may be upon us again soon!

Cheers!