Tobold's Blog
Monday, August 10, 2009
Microtransaction review prequel

This week I am going to post a review of the microtransactions in Atlantica Online. Having found that I like the game, I decided to try out the various microtransaction options, both for personal fun and out of curiosity. So I'm planning to write a review, reporting the various options, and giving my opinions about whether they work to enhance the game, or do destroy it. But as microtransactions are hugely controversial, and besides the specific options of a specific game there is an important philosophical discussion about microtransactions in general, I am writing this prequel. So if you are for or against microtransactions in general, please discuss that in this thread, as I am going to moderate the discussion in the review thread to one about specifics. If you are anti-capitalist, I can only advise you to skip all these posts.

I do believe that microtransaction are, if not "the" future of MMOs, then certainly an important part of that future. Champions Online will have microtransactions, and we will see more and more games offering additional in-game content for money. They will not all be *called* microtransactions, but unless somebody comes up with a better term, I'm going to use that one. Even World of Warcraft offers various character services for money. This month you can effectively buy a Murloc space marine pet from Blizzard, bundled with a video stream from Blizzcon for those who couldn't get a ticket for that event in the 8 minutes they were for sale until they sold out.

I also believe that you can't just bundle up all microtransactions and universally proclaim that they are "good" or "bad". There are both good and bad options, and then there are both cheap and expensive options, and that is not the same. Cheap isn't necessarily good. Free Realms has relatively cheap weapons for sale, but I consider them to be bad microtransactions, because they are much better than the best weapons you can create in game after having spent considerable effort to maximize both mining and smithing careers, thus making those careers obsolete.

The reason why microtransactions are an inevitable part of the future of MMOs is demographics. People like me, who were teenagers in the 80's and grew up with video games, are now middle-aged. Video games in the past have been mainly marketed to children and adolescents. These customers have endless enthusiasm, lots of time on their hands, and little money, so a monthly flat fee business model is ideal for them. The same business model is not necessarily ideal for somebody older, who has a lot less time and a lot more money. Feeling you advance slower than the people around you, because you have less time to spend in the game, can be incredibly frustrating. Frustration does not make good business.

Once you have discretionary income, that is money left over after paying for all the necessities of life, you have a natural urge to spend it on fun stuff for yourself. People have always splurged on their hobbies, be that an expensive set of golf clubs, or yet another train for the model railway. MMO demographics being predominantly male, and men having the same wish to buy nice stuff for themselves, but often less fun going out shopping, buying virtual goods online is often a good solution. Both stuff that is just fun, and items that somewhat compensate the frustrating lack of time, are satisfying buys. This isn't about winning or leaving the people with less money behind in the dust, in fact buying the "I win" button, like the Free Realms weapon, is deeply unsatisfactory. We might want to advance faster, but we don't want to skip right to the end, because the purpose of the game is to have fun playing, not to reach the game over screen.

I recently spent around $200 for a new Playstation Portable. I already owned the first version, but the new PSP 3000 is a lot lighter and has some other improvements, and it was a shiny blue version instead of the boring black. For Atlantica Online I spent $100 on 12,000 Gcoins, the currency then used for microtransactions, and have by now spent around two thirds of that on various items that interested me. It isn't as if I felt obliged to buy this stuff to advance in AO, not any more than I felt obliged to buy a second PSP. It was just that I had the money, didn't need it for anything more essential, and wanted to buy something for myself. Discretionary income coupled with pure self-indulgence. I studied and worked hard in my life, which resulted in me having a good job and financial security, so I feel that I earned that money and deserve all the luxuries of life I can buy with it. That is the capitalist dream. Everybody wants this, only we all have different ideas what superfluous luxury we ultimately want to spend the money on. Few people get to be really rich like Bill Gates, but being able to spend a hundred bucks without having to count your money is already very nice, and something that is in reach for many people. The communist idea of some people working hard and then giving their money to those who didn't was not a success, because it only leads to nobody working hard.

Microtransactions count on the general trend of MMO players getting older and richer. That is good business, because for example Blizzard is unable to capture the full extent of what people would be willing to pay for World of Warcraft. Few of the people who have the money see any advantage of paying for several WoW accounts and doing multi-boxing, so apart from a few exceptions everybody is giving the same money to Blizzard. People who either can't afford $15 per month are excluded, and people who would like to spend more simply can't, unless they spend it on illegit things like RMT and powerleveling, from which Blizzard doesn't profit. Free2Play games with microtransactions have a lot more options, enabling everybody to play, with variable pricing offering a free choice of how much you want to spend, or even play for free. With everyone spending as much money as he wants, ultimately the game company maximizes revenue, which is what drives the development towards microtransactions from the game developer side.

People who do spend money will have access to faster advancement and various luxuries which are harder or impossible to reach for people who play for free. But that is the point of luxury. Railing against microtransactions is just like railing against people driving a Rolls Royce, and has a lot more to do with jealousy than with fairness. The monthly fee model, in which you advance further by spending more time, is not inherently more fair, it just favors a different demographic. That the people who are favored by the existing model want to keep that, and rail against the alternative business model which favors a different group of people, is only natural. That is not going to stop the trend towards MMOs with microtransactions. Because the people who are against it today will probably be older and richer tomorrow, and suddenly $10 for a virtual horse doesn't seem all that outrageously expensive any more. And then of course there is market segmentation: There will always be people with a lot of time and little money, for whom monthly subscriptions are the perfect business model, and thus there will always be games using that business model. The fears that some day there will only be "games for the rich" are unfounded. That there are *some* games favoring players with money is only fair, and as that development is good both for that growing segment of player demographics and the game companies, it is inevitable.

So I do feel that the discussion of "microtransactions, yes or no?" is increasingly luddite. Microtransactions are already here, in various forms, and they are only going to become more, not less, common. The discussion that is more important, and more interesting, now is how microtransactions should be designed. How can items be offered that are useful enough to be desirable, and thus selling well, while at the same time not destroying the balance of the game? How will games be designed *around* microtransactions? What works, what doesn't work? And how do items bought for dollars influence the virtual economies of games? There are so many interesting subjects to discuss around microtransactions. Refusing to acknowledge the trend, or trying to drown any sensible discussion with hypocritical notions of "fairness", isn't going to get us anywhere.
I am of a similar age to yourself Tobold and I am all for convenience. In fact I wish more games allowed people to pick their own level of challenge and time investment (You want to start at max level to get straight to end game - Sure why not?).

Micro transactions are one way of offering players such choices but unfortunately there is a danger that the business imperative of trying to maximise revenue will lead to boring grind fest games just to ensure as many people as possible pay to bypass the grind.
I think the model the industry is working towards is ideally box price + sub + microtransactions + expansion box prices.

In other words everything they can get.

This is kind of natural in a free market economy. Some guy in the accounts department is being paid to generate more revenue. If he can think up, say, paid faction switches and the company makes $70 000 from his idea he'll get a promotion and/or a fat bonus.

The counter is when a competitor undercuts you.

This sort of happened before with the EQ2/WoW struggle for primacy in 2005.

I started with EQ2 and switched to WOW for RL friendship but marginally preferred EQ2 even after I unsubscribed. However EQ2 announced regular paid expansion packs while WoW announced new content would be added in free patches. That for me was a significant factor in sticking with WoW.

Essentially companies will get greedier and greedier until soome competitor cleans up by being cheaper and as good if not better.

Certainly when I look at games like DCUO, Champions Online and City Of X I suspect that in 3 years the top one will simply be the one that is the best value.
The problem with RMT as implemented usually is that they break game balance. Even if we overcome the "taboo" of ebay/gold farms which was what RMT meant the problem faced by designers is still complex and I have yet to see a well designed RMT model.

First problem is free2play. Many F2P games are released all the time and many of them suffer from not being AAA titles. So as a publisher the moment you go F2P is as if you announce that your game is crap and you know it. (Free Realms excluded that was aimed for kids w/o a CC.)

Also as a player why should I spend money in a F2P game? If the reason is need because without item X the game is unbearable then KKTHXBB. If it is luxury what if this luxury is not enough to keep the income at a high enough level?

As I see MMO players we are basically show offs. If my uber skills get me uber gear then I will be offended if the noob next to me in the mailbox is also uber geared without dedicating the same amount of time and/or getting his skills tested. Or to put it in a leveling related way, I had to research guides, solve the traveling salesman problem a thousand times and drink a ton of coffee to level from 1-100 in only a month, now some noob takes a 5$ potion and gets to my level in less than a month?

But also think of the damage the shortcut can cause. In Eve recently I found myself without enough money so I thought I would buy some ISK instead of grinding missions. But then where would that leave me? Underskilled, unprepared and uber rich. What would be my achievement from then on that would keep me playing? The company made a few easy bucks and would have lost me as a customer the moment I saw how long the ship I can now afford to buy will take to train.

I believe there are ways to make RMT work, but many RMT games take the easy way out. Like in Free Realms the best available gear comes from RMT because otherwise fewer people would buy them. Players can also work against themselves buying up all the uber items and getting bored one week after. Maybe a hybrid cheap subscription (no F2P) + limited RMT store (e.g. one super potion per week per account) may work in the long run.
You might want to edit "who has a lot more time and a lot less money" in the fourth paragraph to "who has a lot LESS time and a lot MORE money", as I believe that was what you were communicating.

I will be very curious to hear what you have to say on this topic, especially in the area of pricing transparency. I went to Atlantica's site after seeing your post. The "buy gcoins" link generates an error informing me that the page is for "members only". There were some sample items on display with gcoin prices attached, but most of them appeared to be raffle tickets of one sort or another - you have an undisclosed chance of getting something rare and presumably powerful for your purchase and a presumably larger chance of getting something less rare and valuable.

I have yet to see a microtransaction game that is willing to disclose both the prices of items and the exchange rate for real money into game currency to potential players who have yet to make an account. (There's always some name for the currency other than dollars, even if the company is considerate enough to use a reasonable exchange rate like SOE's 1 cent -> 1 station cash, just to try and dissociate the fact that clicking the button results in the expenditure of cash.) I don't think I've ever seen a microtransaction game sell raffle tickets before though. What are the odds of winning that rare mount? Are there alternative ways to purchase the mount? These are questions that they do not appear to be inclined to answer for prospective customers.

At the end of the day, I don't mind the fact that the $10 horse costs $10. That might be the only money I pay for the game, and they have to get paid somehow. What bothers me is that the developers go so far out of their way to hide the fact that the horse costs $10. It feels like a bait and switch - like they're worried that I'll choose not to pay the game if I know what it costs. In particular, it seems deceitful in a genre that is marketing heavily towards children, who are legally (if ineffectually) required to get their parents' permission before giving out information online in the US. You can bet that any half-way intelligent kid will emphasize the "free" angle if they ask for permission before signing up, and the websites are only too pleased to help them pull one over on their parents by not revealing the prices.

I'll be very curious to hear about Atlantica's price tags, and if you've got any thoughts on the hidden cost business model.
Great post Tobold, and I think this ties in with shift away from achiever focussed content that has occurred in WoW.

Achievements can only be meaningful if there is a level playing field from which to attempt them, and neither traditional subscription based MMOs nor the growth in microtransactions can provide that level playing field.

Some people will always have more time, money, or both, and the sooner it is realised that 'competition' in MMOs is a farcical concept, the sooner we can get back to the 'having fun with friends' bit.
You might want to edit ...

Fixed. Thanks!

Many F2P games are released all the time and many of them suffer from not being AAA titles.

Agreed, including the "many" part. But as we can see with games like Champions Online, you can mix and match business models, making a AAA title which has box sales, monthly fees, and added microtransactions on top. And while the polygon count is probably higher in Aion, I was positively surprised about the really high level of polish and huge amount of content in Atlantica Online. This is certainly not a "crap" game, and it still is Free2Play.

I went to Atlantica's site after seeing your post. The "buy gcoins" link generates an error informing me that the page is for "members only".

Well, membership is free. There are a lot of forums and places which require you to sign up for free before you can get access to the information therein, so I don't consider this an unusual hurdle.

most of them appeared to be raffle tickets of one sort or another - you have an undisclosed chance of getting something rare and presumably powerful for your purchase and a presumably larger chance of getting something less rare and valuable

Yes, see my discussion of "boxes" in the Atlantica Online microtransaction review. I totally agree that undisclosed random chances of getting something more valuable can be problematic. On the other hand a lot of people enjoy lotteries. And there is no "you lose" slip in those raffles.

Achievements can only be meaningful if there is a level playing field from which to attempt them, and neither traditional subscription based MMOs nor the growth in microtransactions can provide that level playing field.

Exactly. It isn't about the challenge, it is about the reward. If you allow people to get the reward by spending time, the step to sell them the reward isn't all that far.
I see a lot of bloggers praising microtransactions, but none of them played a free2play game for a longer time. Of course the 10 dollar horse is not the problem - players paying hundreds of dollars per month for game advantages is the problem. You don't see that if you only play the first levels where microtransactions don't make a difference.

I play Voyage Century Online for over two years now, having payed less than $100, and I am at the point where i have no more gameplay options that dont demand spending a lot of money. Even players who already "invested" a lot leave the game for that reason. The other free2play MMOs i tried were even more frustrating.

So for me it isn't carved in stone that microtransactions are the future of MMOs. The constant pressure on players to spend more money while not delivering an entertaining product could be their downfall.
"Micro transactions are one way of offering players such choices but unfortunately there is a danger that the business imperative of trying to maximise revenue will lead to boring grind fest games just to ensure as many people as possible pay to bypass the grind."

And subscription-based games are the epitome of minimizing grind, right?

Both business models are trying to make the most money they can by keeping people paying as long and as much as possible (while minimizing their actual use of company resources). Customers are trying to get the most for their money. That's the dance of capitalism, and the tension between the two sides is what helps drive competition, innovation and quality. At least, that's what it's supposed to do.

When there's imperfect information or monopolistic tendencies (including cabals and other collusion), things get out of hand. If anything, microtransactions open up the playing field a little more, and that alone would be reason enough for me to promote them. That they offer me better value than subscriptions is less academic, and only matters inasmuch as it might allow me to actually play some of these games, rather than just pontificate about them.
I have no objection to microtransactions in appropriate games; variety in the market is a good thing. But I strongly prefer games without them, and those games are becoming increasingly rare.

For me, microtransactions aren't so much about "fairness" as they are about maintaining the integrity of the fictional world as a separate one from the real world. It just feels odd for characters to be able to acquire gear for real-world dollars. (Metagame transactions like server transfers, extra character slots, etc. don't bother me nearly as much).

Feeling you advance slower than the people around you, because you have less time to spend in the game, can be incredibly frustrating.

I can sympathize with this, being a notoriously slow leveler myself, but there are a couple of problems.

First, the argument cuts both ways. I imagine advancing more slowly than others because you have less real-world money is at least as frustrating.

Second, if you buy items that let you advance more quickly, you're effectively paying the developers *not* to play the game. Doesn't that seem odd? If person A needs to do 10 quests to advance a level, and person B needs to do only 5 because he paid for an experience potion, B has paid extra money to be able to do fewer quests. Assuming that the quests are fun, how does this make sense? (And if you think the quests are a boring grind, why not make them optional for everyone?)

Finally, unless you view MMOs as being some sort of leveling competition, the real problem isn't how fast you advance--it's the underlying game design. Presumably you want to advance quickly either (1) because you want to be able to play with friends who are higher level than you, or (2) because the "best" content is all reserved for the endgame. Both of those could be fixed by changing the underlying design. If the game's business model relies on people paying extra to make up for design flaws, the devs won't have any incentive to fix the flaws. In fact, they might have a perverse incentive to make the game really grindy to get people to buy experience potions.

As I said, I'm all for variety in the marketplace. I just don't like the suggestion that people who oppose microtransactions are somehow being irrational.
Microtransactions seem to fall into one of the following categories, in order of decreasing game disruption:

1) Power (the Free Realms uber-sword)
2) Convenience (teleport scrolls, mounts)
3) Vanity (special-looking armor, weapons, or graphical effects)
4) Support (name / server / faction change)

Blizzard seems to be very cautious in offering micro-transactions in WoW, only slowly moving up the curve. I bet they don't want to break the immersion or alert people to the fact that their online accomplishments are meaningless, and they've been working for less than minimum wage.

On a completely different note, multi-player mafia-style games on social networks like Facebook and Myspace also use microtransactions. As far as I've seen, they provide all 4 categories above, which is not a big deal as there is no endgame in those games, and not so much immersion as a real-time 3D world.
[...] Most people (including myself) have expectations about costs. In the last 20 years, video games have continued to stay in the same general price range ($40-$70) because that's what we EXPECT games to cost. It doesn't really matter that I can AFFORD to pay much more for a game if I won't pay more than what I EXPECT the game to cost. It's all about perceived value. Raising prices simply because your demographic can afford a more expensive product is not going to get them to spend more money. [...]
(read entire blog entry)
I wonder if the people in favor of microtransactions are opposed to RMT. I guess it's ok to pay for in-game advantages as long as it goes back to the company who sold you the game.
Transparency is key. Without transparency, no one really knows how much it will really cost. By the time you've invested significant time & money, you realize you need to go even further.

In other economic markets, people generally won't buy into something without making sure they know what will be coming up in the near (and distant) future. This is why not everyone you know is jumping up and down to be part of a pyramid scheme, for example. (e.g., telemarketing companies).

On the other hand, there are always those people who are not savvy consumers, who will buy the next "widget" from Vince Offer or (the next) Billy Mays. These people are what microtransaction-based games thrive on.

I generally don't even entertain the thought of microtransaction games because I don't like the idea of someone with less skill and more money being able to get further ahead. (Note that I don't always think it's a good idea to have "time sinks" be the "currency" either, like in WoW, for example.)

The whole fun with gaming (for me) comes from everyone starting on an artificially level playing field. This doesn't exist in the real world, but I think it's great to attempt in a MMORPG world.

I don't think there's ever a level playing field. However, why make the playing field more in favor of one who's willing to spend more money than the next chap?

I, for one, think that microtransactions, at least in their current form, don't provide enough transparency. That, coupled with the fact that a company could be bought by an outsider and forced to up their rates or require various items / content to be unlocked by (you guessed it), more money, makes it an unwieldy tool.

Also, the more that money becomes an issue in-game, the more the game starts to become like real life. If you want immersion and escapism, you won't want microtransactions.
I wonder if the people in favor of microtransactions are opposed to RMT. I guess it's ok to pay for in-game advantages as long as it goes back to the company who sold you the game.

The reason why people buy in RMT are the same reasons I listed why microtransactions are inevitable. Much better if the game company gets the money and uses it to produce new games. Did you see how many game companies went under in the current economic crisis?
You may be right but I also think that 'grown ups' with more family commitments are more likely to keep monthly budgets and want to keep tabs on how much they are spending a month.

I know this affects why I like the subscription model. It makes it very easy for me to factor in my gaming to the monthly budget, I know how much it will cost. I can note it down alongside the phone and TV as fixed entertainment cost.

There is an element of higher discretionary spending, sure, but I like to be able to work with a budget.
Spinks, my budget is why I like microtransactions instead of subscriptions. I can keep a closer tab on what I'm spending money on, since it's more granulated. Also, smart MT systems let me adjust my expenditure based on how much time I'll be spending with the game. No subscription model greater than $2/month or so can compete with the value I get out of microtransaction models, simply because I have a very constrained gaming schedule.
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