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Profits from Microtransactions for EA and Activision are Insane

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BY July 6, 2020
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One of the things I hate to see is swiftly written pieces on why microtransactions are killing the gaming industry. In reality, we can assume they’re probably leading to a lot of the profit for major companies. Is that a bad thing in and of itself? Honestly, as a consumer, it’s hard to not look at extra purchases on top of a purchased game as a bad thing. That said, companies who do microtransactions in a productive way get little recognition or credit. New data regarding profits from microtransactions at EA and Activision can help us come to terms with the new reality of gaming.

The Difficult Conversation Around Microtransactions

EA sports image ball game Image Credit: EA

Considering the way in which games release today, it’s tough to find top-tier titles that don’t involve microtransactions. Overall, microtransactions are a large presence in gaming. Recently, an ESRB rating rules change even led to a warning for these types of purchases. If you are a gamer, then you likely think of them as intrusive and greedy. As a publisher, you can likely justify microtransactions as options consumers can take or leave. Journalists find themselves constantly in between these two camps. As a lifelong gamer myself, I’m not privy to take the side of anything that takes the bang for my buck away from purchases I make. Not to mention, my personal politics leave me far too aware of practices in consumer economics that take advantage of average people like you or me.

In short, it’s easy to know why so many people despise microtransactions. I’m never going to write an article arguing that you cannot feel cheated when a game releases and offers DLC only weeks later. We know why companies offer microtransactions: profits. Mobile games are intrusive when it comes to trying to squeeze every cent out of players. Major companies who work primarily in console games, however, handle microtransactions differently. A new report about the profits from microtransactions shocked even me, someone who considers themself fully aware of the market these purchases created.

EA and Activision Making Major Profits from Microtransactions

profits from microtransactions Image Credit: Activision Blizzard

A recent Gamespot piece highlights the profits occurring at two industry titans. First up, Activision Blizzard, the publisher behind massive titles like World of Warcraft and Call of Duty. The company reported $956 million in profits from microtransactions for Q1 2020, which ended March 31. That’s up by $162 million (+20 percent) from $794 million during the same period last year. Three months, nearly $1 trillion. That has to stop and make you think about the motivations behind these in-game offerings. To be honest, if I’m Activision Blizzard, and I can make that much off microtransactions, I’m ignoring every bit of criticism they receive.

Then, you have EA, the team behind Battlefront 2, the Madden and FIFA franchises, among other titles. EA made $789 million from microtransactions in Q1 2020, which is down from $845 million from the same period last year. Despite those losses,  EA made $2.779 billion from in-game purchases in the past 12 months. Obviously, both EA and Activision Blizzard are raking in the serious dough. Why take time to ponder the implications of microtransactions when we know they’re not going anywhere?

Why Profits from Microtransactions Matter Beyond Money

profits from microtransactions Image Credit: Activision Blizzard

One thing that frightens me about these numbers is the implication they have for gaming. Traditionally, if you buy a game, then you have the same game everyone else has when they make a purchase. With microtransactions, we’re suddenly seeing people who play the same game but have access to different amounts of content. For example, I can play Skyrim’s base game and miss out on a ton of content as another player. How? That other player has the DLC packages of Dawnguard, Hearthfire, and Dragonborn, which add hours and hours of content to the game.

My fear of the growing prevalence of microtransactions is that players are going to be limited in their experience of a game based on their financial situation. I don’t see this happening now. Most microtransactions are cosmetic for games like Fortnite or Rocket League. Even for games that offer DLC that adds story or campaign mode content, you usually get a great experience out of the extra purchase. Slowly but surely, we have seen something change with microtransactions: edition-based releases.

Edition-Based Game Releases

For a long time, the option of purchasing a collector’s edition meant you get the game and a little collectible. Even for Assassin’s Creed: Valhallamost of the items in the collector’s edition are non-game related. Still, more and more premium or legendary edition style releases are giving players access to the game sooner, or loading them up with extra XP. We see it with NBA 2K, which gives Legendary Edition purchasers access to the game before base edition consumers. That might not seem like a huge deal, but what we could see happen is this occurs in a more exaggerated way.

I don’t think it’s outlandish to see a publisher try this on a grander scale. Let’s say a new Fallout comes out, and collector’s edition players get access to the game a full week ahead of base game consumers. That $99 purchase might seem more tempting to those who can afford it to get the game early. Now, we have an industry favoring those with more money over those who only shell out $60. Let’s also remind ourselves that $60 isn’t anything to burn mindlessly. For a lot of people, myself included, I make my day-one purchases of $60 plus tax strategically ensuring I spend my hard-earned money effectively.

Profits from Microtransactions Remind Us to be Diligent

profits from microtransactions Image Credit: Activision Blizzard

When I see the profits from microtransactions nearing $1 trillion in a single fiscal quarter, I don’t fear gaming’s demise. I simply remind myself that we enjoy an industry that, like other industries, exists to make money. Without gamers keeping an eye on companies using microtransactions recklessly, we could see worse examples of their implementation. I love seeing a game get called out for unfair, greedy practices. If you follow my coverage of Battlefront 2, then you know I love the game. Still, I was proud to see people turn on EA and DICE so quickly when they attempted to allow in-game purchases as a means for an advantage in competitive multiplayer modes. It doesn’t matter how great a game is: companies should not get away with taking advantage of loyal customers.

I don’t think EA or Activision are doing anything terribly wrong with their microtransactions as of now. For the most part, the offerings from both companies are optional and do little to change the experience of the game. I played through Jedi Fallen Order without any of the DLC and loved it. I buy Madden every year and don’t spend a dime on MUT packs. Still, without a gaming community ready to stand up against shifty practices, we’ll see companies take advantage of our time and time again. Clearly, there’s money to be made in profits from microtransactions. It’s up to us to say when enough is enough.

If you have thoughts on microtransactions, then I’d love to hear them. Let me know what you think of in-game purchases and loot boxes in the comments. Thanks for reading Comic Years for all things gaming, comics, and pop culture.

Featured Image Credit: EA

GAMING

Taylor loves to play video games in his spare time. He has two degrees in Political Communication and wrote his thesis on Marxism and the exploitation of college athletes. In his spare time, he loves spending time with his wife and two Toy Australian Sheppards. He’s always got headphones in, and he’s a diehard Cubs fan.

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