Following the Controversy surrounding micro-transactions right now in the gaming industry and specifically the campaign against Star Wars: Battlefront 2, which we talked about HERE.
Evan Wingren, an analyst for KeyBanc Capital Markets wrote to clients, offering a different take on the MTX (micro-transactions) controversy as reported by CNBC.
“We view the negative reaction to Star Wars: Battlefront 2 (and industry trading sympathy) as an opportunity to add to Electronic Arts, Take-Two, and Activision Blizzard positions. The handling of the SWBF2 launch by EA has been poor; despite this, we view the suspension of MTX [micro-transactions] in the near term as a transitory risk. Gamers aren’t overcharged, they’re undercharged (and we’re gamers). … This saga has been a perfect storm for overreaction as it involves EA, Star Wars, reddit, and certain purist gaming journalists/outlets who dislike MTX,” Wingren wrote.
“If you take a step back and look at the data, an hour of video game content is still one of the cheapest forms of entertainment. Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive rate, and should probably raise prices.”
The analyst also estimated the cost per hour for a typical Star Wars: Battlefront 2 player. Wingren said if a gamer spent $60 for the game, an additional $20 per month for loot micro-transaction boxes and played around 2.5 hours a day for one year, it comes out to roughly 40 cents per hour of entertainment. This compares to an estimated 60 cents to 65 cents per hour for pay television, 80 cents per hour for a movie rental and more than $3 per hour for a movie watched in a theatre, according to the firm’s analysis.
If you read my article above you may expect me to be dead against what Evan Wingren says here. But I actually agree with many aspects of what the analyst is saying. AAA games cost far more to make than they ever did previously, and yet prices have hardly moved up much in the last 15 years. There is a reason for that however as the analysis also shows that customers are less likely to purchase a game if it moves beyond the $60 range. This is where the MTX model comes in and, as I said in my previous article, MTX can be a good thing if implemented correctly. As a gamer, I like only having to purchase a game initially and then get lots of free updates, there is no doubt this model is here to stay and has proved very successful. There are two points of distinction to make here though.
1) The game has to have enough content to have you playing it for 2.5 hours a day, as Wingren stated above, and I’m not 100 percent sure yet whether SW: BF2 has this daily pull over other games. Perhaps it does. If the game developers don’t provide enough content and updates, then people stop playing before they get to the MTX stage. (i.e. they have to be good games)
2) The MTX should (in my humble opinion), be cosmetic only items, which has been done very successfully in other games. The controversy around EA games and specifically SW: BF2 is that by paying lots of money, you will be more powerful in competitive multi-player than opponents who did not purchase any MTX. If Blizzard had used the same model for Overwatch, I’m not sure if the game would have been the worldwide smash hit it has been. Make no mistake either, as Overwatch is making a ton of money off of loot crates with almost zero controversy surrounding it. It also becomes harder to argue for it as a form of gambling when the rewards are merely decorative.
What is your opinion on all this micro-transaction controversy, would you pay more for a game initially to avoid MTX altogether, or are you happy they exist? If so…Do you feel pay to win is acceptable or not? Sound off below
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