Video game monetization is most widely associated with the free-to-play (F2P) business model, but in recent years it has become commonplace for premium, or paid titles.
Based on public outcry over loot boxes in Star Wars: Battlefront II, one might assume that players would do away with premium game monetization altogether. But studies—and revenue—reveal that quite the opposite is true.
Players Are Down With DLC
Downloadable content (DLC) such as expansions and add-ons have been a part of gaming for over a decade, and additional content will make up over 50 percent of digital consoles’ total revenue for 2017, according to SuperData Research. In fact, some publishers earn far more from DLC than the base games themselves. FIFA 17, for example, has earned more than $497 million in DLC, compared to $182.3 million in base game sales as of October.
“This trend is interesting because it’s a demonstration of a ‘games as a service’ monetization strategy,” Elena Fedina, senior analyst at SuperData told AListDaily. “Free-to-play games have always followed it, but now big publishers like Activision and Take-Two also see the benefit in it—gamers are willing to spend $60 at launch and then double or triple that on additional content, so each spender’s value is at least $60 and the maximum they can spend is virtually unlimited.”
A study by LendEdu found that 56.6 percent of video gamers think paid downloadable content is “beneficial to the industry and adds a lot of value to a video game.”
Balance And Legality
One method of game monetization is the “loot box,” which are randomized in-game crates that can be purchased with real money, but the usefulness of their contents are not guaranteed.
“[Loot boxes] add randomness to the process, so it feels more rewarding when the player gets the item they wanted,” said Fedina. “Overwatch has been especially successful with that, but Destiny 2 and Call of Duty WWII also have loot boxes in their stores, because this mechanic proves very successful in generating revenue.”
EA’s Star Wars: Battlefront II woes stem not from the very idea of monetization, but a perceived lack of value to the player. In addition to a base price of $60, players had the option to earn credits (over tens of hours of gameplay) or purchase “loot boxes” for a chance of unlocking characters like Darth Vader or Luke Skywalker.
To put it into perspective, these characters offer a significant advantage over the default Storm Trooper and Rebel characters in multiplayer matches, and thus would have rewarded those who paid real money over those who didn’t. In response to criticism, EA removed all in-game purchases just hours before Battlefront II launched. The controversy cost EA what might have otherwise been a much more successful launch. As it stands, Battlefront II sales are 60 percent lower than its predecessor, and EA stock plummeted $3 billion on Tuesday.
In many games, items up for grabs are cosmetic only—changing the look of a character or in-game items such as a car or a horse, but not offering an advantage for those that pay real money. Due to the randomness of loot boxes, parents and governing bodies have raised concerns over similarities to gambling.
Keeping It Cosmetic
Rocket League developer Psyonix has seen tremendous success through its game monetization strategy but attributes that success to one important factor—balance.
“We believe that add-ons should be complementary to the main game and not required to get the most out of the experience,” Jeremy Dunham, vice president of publishing at Psyonix told AListDaily. “We also believe that add-ons should not harm other player experiences and it’s that philosophy that has allowed us to keep a very simple and straightforward rule for all paid Rocket League content—it’s cosmetic only!”
In Rocket League, players compete in a soccer game that replaces people with vehicles. Optional add-ons allow the players to customize their vehicles from decals to colors and even branded options like the DeLoreon from Back to the Future.
“Cosmetic-only paid content means that we don’t have to make balance compromises at all, and it’s remained that way since our launch in 2015. If you’re buying an add-on for Rocket League, you’re either getting Garage customization content that has no special abilities or powers, or a new vehicle based on a standardized set of Rocket League hitboxes (the area on a vehicle that hits the ball). We have also been known to sell a soundtrack or two each year, but that’s it.”
DLC: Neat, Or Necessary?
Psyonix isn’t offering paid content out of greed, but necessity.
“With Rocket League, we’re a $20 game with millions of monthly players who put in hours and hours of game time, so we need the extra income from add-on content to pay for servers and to grow the team to better support the game as a whole,” explained Dunham. “Game sales on their own would make that very difficult.”
Since the dawn of the arcade, players have been pouring their hard-earned cash into machines upfront and then countless quarters more in an attempt to beat the game or high score. All players earned for their money was another chance at glory.
Once consoles made their way into consumer households, one-time purchases became the norm—consumers bought a game cartridge and if they wanted more, they had to wait for a sequel. It wasn’t until within the last decade or so that premium titles began selling additional content. These add-ons or DLC ranged from new maps to cosmetic items and are still popular today.
Whether it’s adding new maps for Call of Duty or driving the Batmobile in Rocket League, video game consumers are used to—and willing—to pay more as long as the DLC enhances the experience. Game monetization doesn’t have to be a frustrating experience for the players.
“My advice is to understand what add-on content makes the most sense for your audience and go from there,” said Dunham. “You have to get to know your community before you can ask them for more money but sometimes you also need to know when you shouldn’t ask for more money. It’s not as helpful to your bank account, sure, but understanding that your game may not support a long-tail financial model can be just as important to your reputation as a studio and business.”