by Al Jackson8
Microtransactions + Virtual Currencies + Children = Fraud
The Death of Video Games Part II
You’re reading this because recent developments in the game industry have made it clear that if pay to win game development continues unchecked it may mean the end of video games as you and I know them.
My name is Al Jackson. I’m the founder and editor of Hardcore Droid, an online magazine dedicated to core gaming on the Android OS. Because the majority of upcoming core titles are expected to be driven by subscriptions and IAPs, it’s vital to understand the pitfalls that such games have created in gaming thus far. I wrote the following essay to elucidate one of the many issues that plague IAP-heavy games. If, however, you question the premise that sits behind our article, that the encroaching droves of IAP-driven PC and console titles will at least damage the overall quality of core PC and console games and at worst turn the lion’s share of them into pay to win titles ala mobile gaming, then read The Introduction to the Death of Video Games Part II by going here >>
If, on the other hand, you’re looking to sign the Pay to Win Boycott go here >>
Most casinos pump oxygen into their halls while offering free drinks to their patrons in an effort to keep gamblers both tipsy and alert, the ideal mental state for gambling or rather losing money. Pay to win games employ a similar sleight of hand in the way they price and implement virtual currencies that is every bit as lucrative and manipulative.
A number of industry leaders and analysts have been saying over the last year that because of microtransaction’s exceptional profitability they will be part and parcel of most, perhaps all of your AAA gaming experiences in the near future (See the introduction to this piece for references). If IAPs are going to be an integral part of our gaming experiences it’s ideal that we know what that eventuality will look like. For core gamers unfamiliar with the way virtual currencies work, we will explain the phenomenon, in the hopes of giving you an idea of how much it will cost you as well as outline the various ways in which they will be used to manipulate you. We are doing this, in part, to show you why video games need saving. We are also trying to enlist your help in putting an end to the abusive and exploitive way microtransactions and virtual currencies are handled in pay to win games. In short, we want you to join us in boycotting pay to win games.
In a pay to win title, virtual currencies are employed to manipulate players into paying the exorbitant prices it costs to purchase them. Often this is done through clever implementation of dual currencies (a subject we’ll cover in-depth in part III of this series). Dual currencies simply refers to having two types of fake money in a video game. One type is the kind of fake money traditionally found in video games that is earned through play. This type is abundant but generally not worth much in a pay to win title and can only be used to buy the most basic items. Then there’s the special high-test brand of lucre. This premium brand usually sports a moniker that denotes its extraordinary value like “platinum,” “titanium” or “diamonds” and is generally what players need to buy items that have value. Premium currency is also where the trouble is as it can only be bought with great big wads of cash. You might think that the term “great big wads of cash” is an exaggeration. It’s not. To set the record straight about this crooked stripe of virtual credit, I ask that you sit back and let Uncle Al tell you a story...
The Apple that Popped Me in My Head
At around the same time that a group of writers and myself decided to build Hardcore Droid, I ran headfirst into pay to win gaming or rather it ran into my son. It was a weekend afternoon and I was taking a break from writing to show then 5-year old Cole how to play Asphalt 7, a mobile racing title we were reviewing for the first iteration of Hardcore Droid.
You might argue that I should have known better, but I’d been bitten by the smartphone bug only a few weeks before (years later than most people I know) and had just bought my 2012 Nexus 7 a week prior.
We played together, passing it back and forth for a while before I went back to my work. Cole kept playing. At some point he began tugging on my sleeve. He’d just won a race. “Daddy, look, I won! I won gold,” he said.
I glanced at the screen long enough to notice something gold there. I told Cole that he was awesome and went back to work. I didn’t think much about it again. That is until later that day when I tried to download a few of the games we were reviewing that week off Google Play and found that my credit card had been maxed out. I checked out my payments on my Google Wallet page and there sat two payments for $200 each.
To say that I was angry doesn’t come close to describing how I felt at having been duped by way of my five-year old son. I wasn’t remotely peeved at Cole for buying two 200 dollar bundles of virtual currency. At 5 he couldn’t know any better. And while I was mad at Google for not having protections built into their Nexus 7′s OS, what really crept under my skin was one, the fact that my five-year old had been cheated; and two, that said cheating had happened in a video game. Just when had video games begun cheating children? I wondered. And when had they begun costing hundreds to thousands of dollars to play? And who was responsible?
I managed to contact Google, and they promptly refunded me my money. I asked the Google operator why the Nexus 7 didn’t come with a password out of the box to protect parents from getting ripped off, inadvertently or otherwise. He didn’t have a good answer. A cursory Google search revealed that my story was neither an isolated event nor by any means the worst case scenario. It was happening to people all over and often enough for thousands of dollars.
In-App Purchases and Children
News stories about children getting ripped off by microtransactions starkly illustrate both the exorbitant costs of pay to win games and the degree to which they are exploitive (It’s important to note that almost always the gateway to microtransactions is virtual currency).What’s more, in spite of a host of recent law suits, including a Federal Trade Commission settlement against Apple this past January, and a spate of consequent changes to both the technical make up of Google’s Play Store and Apple’s iTune’s store, the phenomenon is still going strong. There’s the story, for example, of the seven-year old twins running up a 3,000 dollar bill from purchasing virtual money in hundred dollars chunks to buy IAPs (in-app purchases, also known as microtransactions) for pay to win title, Clash of Clans; and there’s Lilly Neale who ran up 6,000 dollars playing Campus Life, Injustice, My Horse and Smurf’s Village; and then there’s the very recent case of five-year old Danny Kitchen, who ran up 2,570 dollars playing Zombies versus Ninjas.
Among the host of individual and class action lawsuits filed in response to these incidents, the biggie here in the United States is the aforementioned FTC law suit recently settled with Apple over minors running up steep bills for microtransactions. In the suit, the FTC estimated that American parents have lost tens of millions of dollars from children buying microtransactions. As part of the settlement Apple agreed to pay a minimum of $32.5 million dollars in reparations to parents whose children had run up exorbitant bills buying microtransactions.
Apple also agreed, as part of the settlement, to make changes to the way games with microtransactions are marketed. Meanwhile, Google, also contending with a number of lawsuits related to children getting ripped off, added an additional ‘Require Password’ option into their latest update to the Play Store. By and large, however, both Google’s and Apple’s new child-proof security measures (passwords that reactivate every 30 minutes and those that do so with each purchase) are fundamentally more of the same. Stir into this mix the fact that most of the recent incidents of families being strapped with outrageous microtransaction bills were the result of parents unwittingly handing over their passwords to their children, and it’s easy to see that ripping off children is still on the menu for the Games as a Service Movement.
Pricing and Currency Graft
The incident with my son happened in the summer of 2012, a month before Hardcore Droid went live for the first time. After the shock and anger began to dissipate, I began to think more and more about the fact that a single microtransaction or a bundle of virtual money often enough costs more than a brand new video game, and that more often than not these overpriced microtransactions lead to titles in which mastering challenges is degenerated into a matter of paying a fee.
To make matters worse, it’s become increasingly clear in the last year that pay to win is the future of gaming in general. For one, pay to win titles now dominate mobile. For example, of the first 100 titles on the Google Play Store’s Top Grossing list, only one game is a premium title, a game you pay for once. The situation with Apple is much the same with 71 percent of iTunes app revenue coming from freemium applications (free games paid for via IAPs). It doesn’t take a genius to see that pay to win has come to dominate both markets.
What’s more, the money-making numbers for pay to win games are startling, and not just when it concerns scamming children. GungHoOnlineEntertainment’s casual puzzler, Puzzles and Dragons, for example, pulled in an estimated $4 million dollars a day in Asian markets last year, a phenomenon that sparked a tech business analyst to predict that similar free pay to win titles would be pulling in $10 million dollars a day in just a few years.
The point is that a business model this successful and lucrative isn’t going anywhere (we’ll explore this more in Part IV). If pay to win developers can extract $4 million a day from casual gamers, how do you think the Games as a Service Movement view hardcore gamers, who have a proven track record of intense dedication to video games? The answer is that we kind of look like giant bags of money.
Pay to win game companies and corporations are cropping up everywhere in mainstream gaming, and numerous gaming houses large and small have taken up the Games as a Service mantle. Not only is Electronic Arts marching in the vanguard, having proudly proclaimed sometime ago that everything it does in the future will employ microtransactions (yes, they back peddled, but considering their track record I can’t imagine how anyone would believe that that means anything). EA’s been joined of late by a host of industry giants like UbiSoft and entertainment colossus, Sony. What’s more, there are a handful of big triple A PC and console games available today that are rife with microtransactions, and another handful of next-gen titles that will be made available any day now. Meanwhile, industry luminaries, CEOs and every analyst worth his salt are saying that games sold by way of microtransactions are the future of core gaming (See the introduction to this article for references and finer details).
Bear in mind that the exorbitant prices outlined for you here are only the beginning when it comes to the suspect practices employed by pay to win games. In Part III we’ll discuss a couple of the more common pay to win ploys surrounding the implementation of dual currencies, but the long and short of it looks like this: Pay to win developers create a deep sense of urgency by creating a network of necessary items (think levels, skills and loot), attach remarkably high prices to these items, and then obscure the costs by attaching and extra price structure. Later when a player inevitably finds himself in a dire predicament, they rightly trust that said player won’t bother to break out a calculator to figure out the price of survival. For example, in the first 10 minutes of Frontline Commando 2, the game we tested for part III of this series, we were presented with 16 seemingly necessary things that were being sold using three different types of money, leading to 48 different prices to cut through, if we wanted to understand the cost of playing the title for ten minutes.
But even if you don’t buy that there is something wrong with games manipulating impressionable people into spending money they shouldn’t, never forget that 42% of the time the impressionable player is a child. What’s more, many gamers now recognize that these ploys are destroying games by either compromising challenges or removing them altogether. Worse still, game design based on ploys to induce players into handing over a progressive series of payments transforms gaming into something that replaces the pure fun of traditional video games with something that is more akin to gambling.
We are not boycotting free games here, nor every title that employs microtransactions. We’re boycotting the worst of the lot, as well as any game that employs highly manipulative pricing and design strategies (see The List). In short, we are boycotting pay to win games, titles that employ over-the-top prices for vital game elements, and then hides the costs, often by way of dual currencies. To confuse costs further, these IAPs are often foisted on players when they are in a heightened state of excitement; and so in one fell swoop this new type of marketing ruins challenges and psychologically manipulates paying customers into paying deviously well-hidden and exorbitant costs. At least an alert and tipsy gamblerknows how much money he’s invested in being ripped-off, and is not, about half the time, underage.
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Save Our Hardcore Games!
It’s time that we came together and took this matter in hand. Save hardcore games. Join the pay to win boycott today.
All you need to do is go here >>
While games sold via microtransactions may be inevitable, wildly overcharging gamers and employing tricks to fool them into spending more is not.
We have the power today to stop this trend in its tracks tomorrow. We simply need to come together to save core games.
Join the pay to win boycott today