– by Campbell Clark

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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Source: CNBC

  • Kronx

    Or maybe companies could stop wasting money on things like cut-scenes, celebrities and marketing saturation.

    And comparing video games to movies or TV shows is ridiculous. They’re not the same. Yes, I can spend much more time playing a game, but that is time replaying the same content as I figure out how to beat it. And that’s even moreso for a game like Battlefront II which hinges around replaying the same levels again and again.

    Hell I can dump three hours into playing UNO, but that’s not the same as watching Return of the King. And I’m not going to pay more money for a chance to get a Draw Four.

    Game developers are not losing money. They’re just trying to copy Freemium game mechanics and milk players out of every dime they can get.

    • Whilst I agree with marketing and celebrities 100% I can’t agree on cutscenes for a AAA game. It’s an essential part of feeling like you are in an immersive fantastic world. Some games however do it better than others granted.

      I think it’s not so much losing money as it is thatvfans expect them to keep producing content lasting sometimes a couple of years before they make another game. Previously this was handled through DLC. The problem was that DLC then fragments the community as a whole. Again I cite Overwatch as a great example of how this can be done well and Blizzard are one of the most respected developers by gamers out there. Ok EA are nowhere near that we know well enough.

      • Kindofabigdeal

        Damn cut scenes. I blame it all on Ninja Gaiden.

      • Kronx

        I like it better when a game progresses the story through scripted events in-game. Just finished replaying Portal 2, and it does an amazing job of doing just that. (I think there’s one brief cut-scene at the end). That’s more immersive than any cut-scene.

        And there’s nothing wrong with a few brief cut-scenes if necessary. However some companies make, what amounts to, an animated feature film to go along with their game.

        “You’re trapped in a base full of Nazis. Go!” That’s really all the set-up I need.

        And, by Grepthar’s Hammer, they should amend the constitution to add a provision banning the use of unskippable cut-scenes. Anyone who does this should be banned from computers for life.

  • Brafdorf

    it’s different when your loot boxes affect the integrity of your game, instead of just being cosmetic/visual

  • Kindofabigdeal

    Those analysts are smoking crack. Paid to spin numbers in whatever direction they are hired to do. If I ever met the guy who wrote that article in person I would say “Shame on you!”

  • Laurence

    Who has 2.5 hrs a day to play video games? If i get 1hr between Monday and Friday and maybe an 1-2hrs on the weekend I’ve done well.
    I only have to watch a movie once in one sitting and a movie can be used by 10people in one go at the same price no matter how many people watch it.
    I had Battlefront 1 and opted out of buying it this year because the first one was lousy anyway and very short on maps.

  • Victor Roa

    I’m not sure Ovewatch is a good example. Blizzard owns all of their IP, so they still make money off of Starcraft 1 and Diablo 2, and all of that helps keep them afloat. EA doesn’t have that they have a License deal, they can barely hold historical content longer than 5 years because they don’t want their customers realizing Sims games keep taking away features since 1999. You see, Blizzard’s success is still this privately funded company (until activision deal lasted for 4 years but they still have their independence) so their experiments are still their own. EA just buys out companies and then merges them and then eats them whole, they never learned anything for over 20 years. Blizzard is able to explore loot boxes through Hearthstone, an experiment that still took time and was something they could understand from, everything about Hearthstone was an experiment, the design, the animation, the platform. Remember the eyetoy PS3 card game? EA has no time for any of this, Blizzard has the time to refine their work Blizzard still have quarterly earning calls to their investors….. and their 10 year Star Wars deal is just 5 years in and still they only got a 3 games one canceled game when in reality everyone wants Lego Star Wars.