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EA details microtransaction-filled future
EA details microtransaction-filled future
February 27, 2013 | By Mike Rose

February 27, 2013 | By Mike Rose
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    33 comments
More: Console/PC, Smartphone/Tablet, Business/Marketing



"We're building into all of our games the ability to pay for things along the way."
- Blake J. Jorgensen, CFO at Electronic Arts, says that all future games from the company will involve microtransactions in some way.

EA has hinted numerous times in the past that it is very interested in pursuing in-app purchases wherever possible, including an example of paying a dollar to get more ammo for your clip in Battlefield.

As part of a talk at Morgan Stanley Technology Media & Telecom Conference this week, Jorgensen said that EA is now looking to incorporate in-app purchases into all its games, "either to get to a higher level to buy a new character, to buy a truck, a gun, whatever it might be."

"Consumers are enjoying and embracing that way of the business," he added, noting that as part of the dedication to microtransactions, the company has built its own system to handle the intake.

"We've got to have a very strong back-end to make sure that we can operate a business like that," he explained. "If you're doing microtransactions and you're processing credit cards for every one of those microtransactions, you'll get eaten alive. And so Rajat's [Taneja, CTO at EA] team has built an amazing back-end to be able to manage that and manage it much more profitably."

EA has previously outsourced a good portion of its microtransactions operations, but it will now bring everything in-house.

Jorgensen continued, "The other piece of that puzzle is the mobile business itself. Playing games on a tablet or a mobile phone, smartphone, that business has evolved very quickly. It's become a very large part of our business and it's either an extension of existing franchises or new franchises."

With The Simpsons: Tapped Out, for example, EA took $25 million in the last quarter alone. "So there's an opportunity there, probably smaller opportunity on a per title basis than something like a FIFA or a Battlefield."


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Comments


Christopher Myburgh
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BOOO!!!

I don't know what's worse: that EA are incorporating microexploitations into all of their products, or that people are actually paying extra for random virtual crap.

Oh well, we all vote with our wallets. Guess I just have to cast my vote by no longer buying EA games.

Robert Swift
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Here is one tip EA: Maybe just convert all virtual money transaction in games into real money, including purchases in weapon shops, police fines, service tips, ..., just in order not to break the immerson you know ;)

Kujel Selsuru
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I swear this kind of crap is only going to excellerate the impending AAA market crash.

Alan Boody
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The defense of these microtransactions always comes in the form of, "You don't have to buy them to play and enjoy the game." Sure, that's true for now. But, eventually, that will change. You'll have less and less content, with more and more microtransactions everywhere.

Ramin Shokrizade
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EA has been on this path for some time now. I'm not going to say that microtransactions are bad, per se, because they are not. They are just a tool. So far, however, I have been very unimpressed with how EA has used that tool. Hopefully they will soon become more sophisticated in how they do FTP, because if not then their market share will continue to decline until it is game over for EA.

Kyle Redd
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Can you think of an example of a full-priced game that would actually be better with micro-transactions? I can't.

Arseniy Shved
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@Kyle
For example while playing some 80-hours long RPG and half way through save files got corrupted and player does not want to replay last 40 hours - it would probably be good to have a shortcut.

Well, saves can be stored in the cloud, but last I heard pepole did not like when games require constant internet connection.

But I agree, 99.99% chance is that microtransactions will distort both game experience and the buisness itself in a bad way.

Ian Fisch
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People don't talk much about the immersion-breaking that these microtransactions create.

Sorry to interrupt your quest to slay the dragon, but please give EA games 20 Microsoft points to unlock the mithril shield!!

Chris Clogg
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I think a lot of games are guilty of this. You can always feel when they're trying to hawk IAP off on you on every menu screen.

Maybe micro-transactions are just a young system and, like Ramin says, it will get more sophisticated and less annoying in the future.

Shea Rutsatz
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I agree. They say you "don't have to pay to play or have fun", but all the prompting and harassment in-app for some games just wrecks the flow.

Dean Boytor
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I have mixed feelings about premium content/micro transaction/in app purchases

I see them 3 ways
First being you make a complete game and reduce its content, and then take those pieces and try to sell them back to the customer as "dlc" or "Extra".(sometimes you can be cute about this and say "forgotten" or "never before seen!") This is what EA tends to do.

Second being, making a complete game and not stripping anything out. The DLC's or extra content added affect game play to a point where it makes the game too easy because this new content was never apart of the original design, which leads to things that are deemed "broken".

Last being, after thought, added story additional quests Kind of like the Dark Souls DLC, Mass effect 3 DLC and/or borderlands.

They all have their pros and cons, its hard to tell what premium stuff in a game will just put you on par or will make the game unsatisfying and too easy.

For instance: hey this premium sniper scope makes it more fair to see other snipers vs a bazooka that clears a whole room.

That's just my 2 cents

Alexander Ageno
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I need a little rational optimism regarding the game industry right now.

Any one?

Michael Ball
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As opposed to the current, irrational optimism?

Jonathan Jennings
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the Ouya will be out soon ?

Judy Tyrer
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Whenever I play a game with microtransactions, I patently refuse to purchase them. If the game stops being fun without them, I stop playing. If the game is still fun without them, then I may actually be inclined to purchase something because it's fun to have. But I refuse to support games whose designers are focused on microtransaction sales and not creating a fun game.

I think microtransactions are great if they are supplemental. They only suck when they intefere with the gameplay, which sadly, is about 99% of the time.

Joe Zachery
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Paying for content that should already be in the game is just bull! EA has never been a company about the consumer So expect a lot of microtransactions on items a generation ago they gave away for free. EA is not going to give us anything worth while. Since they just redo the same game each year. You can pass that item off as the new thing in next years upgrade game.

J Benjamin Hollman
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I don't see the problem here as the microtransactions themselves; if done right, it's one viable business model out of many. The problem is that whether or not there are IAPs in a game should be the developer's decision, not a publisher mandate. Especially one with such a large and diverse portfolio as EA.

Which isn't to say that EA is violating the creative integrity of the games it publishes, because EA is not that kind of publisher. They do dumb fun, plain and simple. If you're a developer looking for full creative freedom, you're going to go the EA Partners route anyway, in which case I'm assuming this mandate doesn't apply (if it does, ignore what I just said).

But putting all of their eggs in the same basket, regardless of whether they fit or not, could negatively affect both the gameplay and the reputation of the games in their lineup. It's easy to look at everything Zynga did wrong and say that you won't make those same mistakes, but it's hard to avoid making an entirely different set of mistakes based on a similar business model.

Robert Tsao
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The difference between Simpsons: Tapped Out is a freemium title and Battlefield a paid product notwithstanding, I don't think microtransactions are bad per se. It's just that the examples we've seen so far have been such tactless and gauche ploys that tap into an itchy part of a person's psychology and nature. EA, in particular has been particularly brazen.

Dead Space 3's weapon crafting as a recent (EA) example, is a carefully and deliberately designed system that straddles an already uneasy rift of the game's split between horror and player empowerment. Adding a grind on top of it alongside monetizing little helper bots or just buying resources for crafting outright? By paying real money, the player is given the power to avoid the grind, sidestep the anxiety and scares in the game's otherwise tightly-paced sidequests, and effectively craft "signature" weapons and armor upgrades that ostensibly alleviate much of the tension and horror built into the game.

I'd normally ask why such a seasoned developer such as Visceral would perpetrate an act of egregious self-sabotage in a beloved property of their own creation, but I think we know what the answer is. That, to me, doesn't bode well for EA's monetization wizards of a microtransactionified future.

Adam Bishop
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An awful lot of people both here and elsewhere will say that microtransactions in theory aren't a bad idea but in practice they often are. But if it's the case that microtransactions are almost always poorly implemented maybe there is a fundamental problem with them to begin with (or at the very least with the way in which game execs conceive of them).

Ian Fisch
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People don't talk much about the immersion-breaking that these microtransactions create.

Sorry to interrupt your quest to slay the dragon, but please give EA games 20 Microsoft points to unlock the mithril shield!!

Nick Green
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"Consumers are enjoying and embracing that way of the business"

As evidenced by the comments here, a lot of people don't.

What this announcement says to consumers "If you're not a microtransaction lover then we don't want your money."

Chris Hendricks
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Microtransactions are an attempt to address a fundamental issue.

The point of microtransactions is to court the type of person who says "I'll gladly pay $50 for something I know I'll like rather than pay $30 for something that I'm not sure about." For those people, microtransactions make sense.

Is it worth it for EA to pursue these people? Well, consider the fact that the average video game consumer is buys games that are sequels to an existing property, and thus, more apt to pay money for something that they know they'll like (a trend also common in movies, books, magazines, etc.). If EA is making a new IP, it's awfully appealing to get customers to try it for free first and then spend money on it than to take the chance that the customers will just try something new.

Am I painting a rosier picture of this than is reality? Likely, yes. But hey, if microtransactions are truly the horrible experience many people say they are, then many consumers will start to notice it too, and the smart game developers will be able to advertise that their game is "100% Microtransaction-Free!".

Dane MacMahon
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Something these companies do not think about in my opinion is the overall impact of the experience of microtransactions on the core market versus the profit obtained from those transactions. What I mean is that yes, you can chart a profit from selling exp bumps and weapon packs, and yes a marketing man can meet with an executive and point to a chart that says that tactic is profitable. However, how often do they examine the trend of consumers playing games more often that do not ask them to do such things, or playing a game for longer and perhaps supporting larger DLC content that can still be quite profitable?

I just get a heavy sense of looking at the short-term profit here rather than long-term customer loyalty and full-price purchases.

wes bogdan
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Further proof how evil EA is though microtransactions are for those with less time,patience or imagine multi player where those with the best armour,weapons have the most disposable income and those that don't get fragged because their gear sucks and sure level up and grinding will get you there but you'll have instant gratification through micro transactions so you want a sweet new ride,extra long health bar or bigger guns like your friends have pony up.
If not well maybe by the time the sequel hits you'll unlock all that fluf but by then who cares.

WELCOME TO THE NEXT LEVEL!!!

Ron Dippold
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Is this like how Time Warner Cable 'knows' I don't want gigabit internet this week?

The big problem with the EA / Dead Space 3 model is that you combine a full price game with microtransactions. It's the worst of both! I can live with them in a free game, and I might even cough up for one or two. But not for something I just paid $60 for up front expecting a full game. Don't say you can have a full game and just not use the microtransactions - of course you can, but in one scenario or the other (you use them or you don't) the design is deliberately broken unless they're purely cosmetic.

Jonathan Murphy
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Just remember the consumers don't find it so funny when you speak over them on what they want. EA will be Dead Space in 4 years... Get it?

Joshua Hawkins
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Just as long as we don't revert back to the days of coin-op games where they were intentionally harder just to make you spend more money.

As far as $85 games go it's BS. Games will cost what consumers are willing to spend. How do publishers determine what gamers will spend? Collectors Editions. If you'll spend $10 more for a fancy box, and some in game items you would of spent more for the game in the first place. I'm not too worried though I didn't buy a single $60 game last gen, and I doubt I do it next gen either.

Gian Dominguez
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Personally if this is the approach most companies are going with I'm just gonna avoid day one purchases and wait maybe a couple of months(heck maybe even a year) for some sort of compilation with all the content already in it.

Kujel Selsuru
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If you're having trouble selling your games @ $60 a pop, cut out the middle man (retail, disk production, warehouses, CEOs, etc) and cut the price by say half. Most of us already know that only about 15% of that $60 (or $9) goes to us the developers and that is who our fans want to support (not the publisher).

FTP is not the solution because 99.99% the time it does not fit the game (same with the touchscreen interface), finding ways to cut needless costs (like middle men) and reducing the price even a little bit is the solution.

AAA gaming cannot continue down this path for much longer before the consumers say f@#$ you and take up a new hobby.

Gil Salvado
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The micropayment in Dead Space 3 already made me believe EA is going nuts again, but this news is proof of it.

I know, it's just service you're paying for and there's probably going to be no pay-to-win, but microtransactions in a AAA title still feels wrong. People already think of free2play as a money sink, things were just about to change with high quality f2p games, but micropayment within full price titles feels like peversion of fair but capitalistic system.

I guess, where ever there is capitalism, there are people trying to get the very last penny out of your wallet and pushing fair developers out of the business doing so.

Well, I'm going to vote with my wallet in that case.

paj saraf
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The simple reality is, people pay more for freemium/microtransaction enabled games than pay to play. ARPU's are generally 30-40% higher.

That means a game you would pay 50$ for at a store, would generate instead 75$ average revenue per unit, if it was given as a freemium title.

so

EA will keep moving towards freemium titles because they are more profitable.
Don't blame EA because they want to make money. That is the reason why they are in business. the quality of there games are generally good, its not like they make a lot of bad products. But they are making PRODUCTS.

Its hard as a lover of games to like what they do, as micro-transaction feel exploitative and somewhat dishonest. I personally feel this needs to be regulated. I feel it violates the trust between content provider and consumer and I invite the government to regulate this aspect of the industry to prevent continued exploitation. .

However, our governments have long since abandoned consumer rights in most western nations and so Micro Transactions are here to stay until people stop paying. Which, appears to be unlikely.

Ron Dippold
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'EA will keep moving towards freemium titles because they are more profitable.'

In this case they're moving towards paymium. You pay full price, /and/ then they soak and pester you with microtransactions.

David Serrano
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I find it interesting that the most risk adverse publisher in the business would head down this path. There are so many unresolved issues regarding the legal status of virtual goods and it seems like this strategy exposes EA to every unforeseen ramification and consequence of the law catching up with the technology and business practices in unfavorable ways for game developers or publishers. I guess it's just another example of the short term thinking that's been driving the largest publishers for years.

http://www.forbes.com/sites/oliverherzfeld/2012/12/04/what-is-the
-legal-status-of-virtual-goods/


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