Editorials

Money Talks – How Pay-To-Win Mechanics Are Taking Over An Industry

Video Game publishers have been implementing controversial pay-to-win mechanics into their titles for over a decade now, whether it be through premium currencies, season passes, or loot boxes, and it’s hard to say if and when this phenomenon will ever come to a halt.

Regardless of the platform, it’s become a given that players can expect to spend more than their initial outlay if they are to fully experience everything within a video game.

It doesn’t matter whether players are paying to experience more of the game quicker, or they just want to enhance their gameplay with new content, we have to recognize that pay-to-win mechanics and microtransactions that allow this are now a huge part of the industry.

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When did the microtransaction trend first begin?

In-game microtransactions first cropped up in 2006 following the release of iconic RPG The Elder Scrolls: Oblivion, with Bethesda offering players the opportunity to buy unique armor for their horses. Unsurprisingly, fans of the series were shocked and outraged by the brash move, however, that didn’t stop them from splashing the cash on this armor and additional content that soon followed.

Egged on by their overlords at Sony and Microsoft, video game developers were encouraged to follow suit in order to open up new revenue streams for both of them. Over time these devs slowly began to introduce microtransactions into their games, whether that be rich and immersive new in-game content or something more superficial and cosmetic, such as new outfits, or worse, a set of emotes.

Seeing that players were willing to open their wallets for practically anything, despite having already spent an arm and a leg to purchase the base game, publishers across all platforms quickly realized there was a huge market just waiting to be exploited.

As each year passed various in-game microtransaction methods came in waves. First, it was the age of cosmetic enhancements, followed by in-game downloadable content (DLC) such as expansions and season passes, and finally, pay-to-win microtransactions such as virtual currencies and loot boxes arrived which still dominate the industry today.

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An ugly future – pay-to-win mechanics create a new breed of player

Not only has there been a very healthy appetite for DLC, but there’s been an even healthier appetite for microtransactions that help speed up a player’s in-game progress and put them ahead of others, without having to put in the time or effort.

Initially, there were three stand-out markets that really bought into the pay-to-win mechanic early on, and as a result, profited heavily. These were mobile games, Facebook games, and a handful of MMORPGs.

Microtransactions in mobile and Facebook games such as Clash of Clans, Farmville and Zynga Poker all shared very similar mechanics in that virtual currencies really put those with access to a disposable income ahead of others due to the fact they could bypass time gating.

Almost all popular games on these platforms utilized time gating, which essentially meant in order to progress or gain additional resources players were forced to wait a set amount of time and return to the game day-after-day.

This method ensures players continue coming back and playing more, it also helped create a small handful of hugely committed and hardened players that yearned for more.

These players are referred to as whales, players that are willing to spend big in order to dominate the game. Despite being part of the minority, it’s whales that bring in most of the revenue to these free-to-play games, keeping them going in the long run.

In the case of MMORPG’s titles such as Black Desert Online and Archeage, these offer players the opportunity to buy cosmetic items such as clothing and pets, as well as gear that helps them progressive significantly quicker than they would if they played the game in the slow and methodical order that was originally intended.

In the early days of pay-to-win mechanics, it was only ever a small handful of any given player base that really took advantage of microtransactions. However, the landscape experienced a huge shift as a number of popular games began implementing these mechanics in a much more exciting and unpredictable fashion, loot boxes.

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How loot boxes dramatically changed the video game landscape

Big-time publishers such as EA, 2K, and Epic Games who run franchises such as FIFA, Madden, NBA2K, and Fortnite took the pay-to-win format and truly ran with it, catapulting microtransactions into the public eye like never before with loot boxes.

For the uninitiated, a loot box is a paid-for virtual in-game container that contains a selection of completely random items and modifications that may or may not enhance the user’s in-game progression.

Despite only really grabbing people’s attention in the last few years, it’s a common misconception that loot boxes are a product of recent times. In reality, loot boxes have actually been around since 2004, when popular MMORPG Maplestory allowed Japanese players to pay 100 Yen for Gachapon ticket which awarded them a random item.

Nowadays, you’d be hard-pressed to find a video game (Especially big AAA titles) that don’t include microtransactions or loot boxes as an integral part of the game. Such has their success been that both the FIFA and Madden series build their new yearly titles around the Ultimate Team game mode that heavily features microtransactions. 

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Should we consider loot boxes and pay-to-win mechanics gambling?

There has been much debate around the world as to whether loot boxes can be considered gambling. The fact of the matter is that loot boxes are designed to keep players buying more in order to get that one sought after item they’ve been chasing. If we’re being completely honest it’s very easy to make the connection between lot boxes and an online slot game.

In the past few years the officials from the United Kingdom, Ireland, Sweden, Denmark, Germany, New Zealand, and Australia have all carried out their own investigations into loot boxes and have unanimously determined that they do not constitute gambling.

Many countries have worked towards regulating loot boxes, ensuring greater transparency. In several Asian countries, including China, developers are forced to display the odds of pulling a lucrative item before the loot box is even purchased. However, the only country to take a hardcore stance against pay-to-win mechanics has been Belgium, who banned loot boxes outright in 2018.

Despite the negative stance from lawmakers, it’s highly doubtful that loot boxes will be banned worldwide. A report by Juniper Research suggests that loot boxes will reach a total spend of $50 billion by 2022. With that much money involved, it’s clear that publishers would put up an incredibly strong fight to protect their revenue.

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Are pay-to-win game mechanics sneaking into other industries?

Having seen first hand just how much money people are willing to spend in order to register a quick win, iGaming executives experienced their own light bulb moment, realizing these mechanics would work perfectly within popular slot games available at online casinos.

If pay-to-win mechanics are heavily utilized by a handful of players that want to enjoy the rush of potentially winning big with digital goods, then there had to be a market out there for players that wanted to experience the rush of winning big with cold hard cash as well?

This led to Australian iGaming software developers Big Time Gaming introducing the Feature Buy mechanic into their games, a paid-for shortcut that allows players to immediately play the slot’s exciting bonus round, giving them the chance to potentially win huge sums of money.

Usually, it can take players up to 100 – 150 real money spins, if not more, to trigger a lucrative high-paying bonus round. So spending what could well be less money to jump straight into the action proved incredibly popular with many players.

Unsurprisingly, much like their video game counterparts, Big Time Gaming’s pay-to-win feature drew huge controversy due to the fact that the cost to launch these bonus rounds was significantly more than it would be to play a standard spin. This led to the mechanic being banned in the United Kingdom altogether as the UK Gambling Commission feared it would lead to many players spending way beyond their means in an attempt to win big.

Only recently a second well-known iGaming developer, Wazdan, announced that they’d launched their own feature buy mechanic that would be implemented into their games due to ‘the high demand of players seeking the option to buy their bonuses as they please’.

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What does the future hold for pay-to-win mechanics? 

Not only does it look like pay-to-win mechanics are still rife across the gaming industry as a whole, but it looks as if the practice is spreading into other major industries where decision-makers think their users are willing to fork out.

You only have to look at how major digital entities monetize themselves nowadays in order to survive and grow as businesses to see that this trend isn’t going to give up any time soon.

Newspapers place their content behind paywalls, developers ask users to pay for the full version of their software, and those in the gaming sphere offer players the opportunity to pay to progress rather than take the much slower traditional route.

In the case of video games and iGaming, further research will certainly take a long look at the impact that these mechanics have on players, and there’s absolutely no doubt that harsher regulations will come into place in some markets as they attract more attention, much like they have done in the United Kingdom recently.

At the start of this month, the House of Lords shook the UK gaming community to its core by calling for ‘immediate’ gambling regulation in order to classify Loot Boxes as “games of chance” which would mean those under the age of 18 would no longer be able to purchase any form of loot box or ‘pack’ in games such as FIFA’s Ultimate Team mode, arguably one of the most popular online console games with players.

In their report, they stated “If a product looks like gambling and feels like gambling, it should be regulated as gambling. They followed this with “There is academic research which proves that there is a connection, though not necessarily a causal link, between loot box spending and problem gambling,”

With all that said, as long as there are people out there around the world willing to pay, then pay-to-win mechanics will absolutely continue to be implemented by publishers until lawmakers force them to stop. This is no doubt terrible news for gamers as prices continue to rise as we prepare for the latest generation of pricey consoles and AAA titles to hit shelves.

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