How microtransactions are changing the video game business

How microtransactions are changing the video game business

24 million dollars in profit and more than ten million downloads in three weeks: the video game Diablo Immortal is a resounding success. At least in appearance. Because on the Metacritic site, where Internet users evaluate the quality of cultural products, the blockbuster from Blizzard Entertainment studios and NetEase displays the pitiful score of 0.3/10. The low score is explained by the impressive number of microtransactions to be carried out to advance in the game, at the origin of an outcry from the players. Coats of arms to buy, upgrades to acquire or even powers to unlock… The game is free to download, but can be very expensive afterwards. According to the YouTube channel Bellular News, it would cost 110,000 dollars to play the best character possible. A sign of the crushing new weight of microtransactions on the business Video games.

“Without microtransactions, the video game industry is dead,” said Julien Pillot, economist at Inseec. Why such a development? “We are in a universe where the industry has become mature, explains the teacher-researcher. It is concentrating, there have been a lot of mergers and acquisitions in recent years.” Industrial groups are getting stronger, and the costs of blockbusters multiply -up to 200 million dollars for a game, excluding costs marketing, according to the economist. “The business model of these big budget games ties up work time and capital for years. This is a huge business risk. Today, with two consecutive business failures, you are going out of business. To be able to continue to feed this model, we need games that take less time to develop and that are based on microtransactions. These games will bring you recurring income and will not be very expensive.” Something to reassure investors.

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In 2020, the giant EA made 29% of its revenue via in-game microtransactions FIFA Ultimate Team. Julien Pillot explains this success: “The players are ready to pay several times small sums, so that it is as painless as possible. And in the end, we obtain a ticket which is much higher than what they would have spent in one time.”

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