Tobold's Blog
Tuesday, January 15, 2019
Effects of monetization

NoGuff asked in a comment on yesterday's post "How long do you think it will be before we see an honest postmortem on how F2P, micro-transactions and similar monetization methods have effected player retention over the long term?". I don't think he will like any of my answers.

First of all, I don't think it is a problem of honesty. Scientifically speaking it is a case of a missing baseline: We do not know how the player retention in World of Warcraft is affected by the sale of sparkling ponies, because there is no alternative World of Warcraft that does not have sparkling ponies. If game X does very well, or is a complete flop, is that because game X has loot boxes, or is the game just very good / very bad? Personally I would suspect that the main problem with player retention in mobile Free2Play games is that there are a million of them, many very similar to each other. Even if they were buy-to-own they would still have terrible churn. Unless they were very expensive, in which case nobody would play them at all.

The second answer NoGuff won't like is that I believe that monetization schemes could potentially have a positive effect on player retention. This is due to a very common psychological misjudgment people tend to make, called the sunk cost fallacy. The fact that a player has spent money on a game leads to him being less willing to abandon that game, and can potentially even make him spend more money. Of course the same works with time spent, but I would guess that money spent weighs heavier in that decision.

The third factor I was thinking off is that once you consider a "long term" over years and decades, you need to consider how people change over decades. 30 years ago I had little money and a lot of time, today I have a lot less time and more money. Your mileage may vary, but my case isn't exactly uncommon. According to the Bureau of Labor statistics, the average American household spent $3,203 per year on entertainment in 2017. While there are always stories about the few "whales" who spend thousands on a game, I would believe that my recent $40 for 25 loot boxes in World of Tanks is the more common type of what regular people spend on monetization schemes in games. $40 here and there on a $3,203 annual budget isn't a big deal, it is cheaper than a lot of other hobbies.

I made a purchase recently in World of Tanks which I consider a borderline excessive, and it had probably more to do with "retail therapy" than with me actually needing it: I bought a Panzerkampfwagen II Ausführung J. Or rather, I bought the largest bundle of World of Tanks premium currency (30,500 gold) for the standard price of €99.95 which came with a free Pz.Kpfw. II Ausf. J included. As that amount of gold pays for a year of premium account and you still have gold over for other in-game stuff, I am not likely to make such a purchase very often. But even if I would spend several hundred Euros per year on World of Tanks, that wouldn't really break the bank.

However that Pz.Kpfw. II Ausf. J is certainly very much "Pay2Win", as I have a 68% win rate with it, compared to an average win rate of 48% with my other tanks. This particular tank has a very thick armor for its tier, and so some of the enemies you encounter will simply not be able to penetrate your armor. That enables sometimes spectacular wins, and the only way to get there is with real money. Okay, so the tank has a bunch of drawbacks, like needing expensive ammo and being very slow. And if the matchmaker pairs you against higher tier tanks, their bigger guns will easily penetrate your armor. But overall it is Pay2Win, because I am able to win more with that tank by having paid real money.

Whether a monetization scheme in a game involves Pay2Win, or whether it the game just sells you cosmetic items like sparkling ponies or skins, the effect of monetization on player retention is probably less on the player who spent the money, but on the players who didn't spend any. Whether it is wallet warriors able to beat you with the power of real money in a PvP game, or you just being jealous of having to grind slowly in a game for free while people who pay advance faster, or just have nicer looking outfits, this can affect the motivation of free players to continue playing. However game companies are probably more interested in retaining the paying players than retaining the free ones. And if the game wasn't Free2Play, but had an upfront payment required to enter, then many of those free players wouldn't have played the game at all. So I think over all games and all players, Free2Play with monetization increases the number of players rather than decreasing it.


For me its less about retention than engagement at all. I have found over the last few years I just don't pick up games that might be interesting to me but are based on micro transactions. I know I am susceptible to the draw of retail therapy and the "ehhh its only $10" arguments. So I just don't play. I realize I'm in the minority and over time I'll probably run out of games to play. I keep hoping the micro transaction backlash will get large enough to encourage developers to make more games that are a discreet purchase or even a minor subscription.
I’m not sure there is really a “micro transaction backlash”. There is definitively a “loot box backlash”; as I live in Belgium I can’t even buy loot boxes any more in many games. But the argument against loot boxes appears to be that the content is random, so they constitute “gambling”. At least from the legal side there appears to be no objection against non-gambling micro transactions.
I have played about 12,000 battles in WoT. I purchased a $45 pre-order package and then a $10 (on sale half price package) one in each of the following two years. So I was not giving them much money but some. I had a 55% win ratio in that time and a win8 that put me at the bottom of the top 10%. I last played a year ago during the Christmas special. Played for almost 2 weeks then after being 9 month away.

Things that pushed me away from the game:
1) More and more gold ammo usage by the population.
2) The ever increasing number of tanks making it harder to remember how to shoot and generally deal with all the variety. Adding tanks being a form of monetization for the game.
3) Given the above and my frequent long breaks away my play was getting worse and worse each time I returned.
4) The final straw was the premium tanks that no longer were objectively worse in non specific cases than the normal tanks. The pure better premium tanks which everyone that played increased their win rate by more than 5%.

With my win rate and getting gold from tournaments and low level league play my account had something like 10,000 gold and 80,000 silver when I stopped playing. Financially, I could afford to do more purchasing without blinking an eye but it just was not fun to play anymore on an uneven playing field even if I had advantages over the masses.
People seem to forget that those of us that go to gaming websites or congregate on places like reddit are NOT the average consumer. Lootboxes and to an extent microtransactions are criticized there but the average Jonny game who buys call of duty, madden and fifa every year doesn't really care about them.

In fact Jonny is happy he can play his fornite and other games without paying for them.

It's not even a debate if F2P, lootboxes, etc work. They absolutely do. That's why they are everywhere. Regardless of what is on sites like Kotaku or Polygon or Reddit these companies have these practices because time and time again they see people will open up their wallets and spend.

My question about retention was more a thought about how major gaming news outlet would one day look back at its effects on the gaming industry as a whole. Sure, it has made many developers and publishers a lot of money, but there is no disputing the effects that it has had on game design and the egregious examples of implementation we have seen over the past couple of years with gambling and the lack of restrictions/protections where minors are concerned. But that aside, you and I both have agreed in the past that the time-rich and the money-rich should never be pitted against each other directly in a match making system where P2W elements exist in a game - of which I am a firm believer that player retention will be negatively affected in such cases.
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