Gaming as a Product or Service

“Gaming today is software development, and software is always updated”.

The gaming industry has grown exponentially over the past decade or two, and now game developers are rethinking the use of games as platforms, and the relationship between developers and audiences. There has been a growing debate among gamers whether games should be strictly product-based or service-based. This has birthed a new wave known as Gaming as a Service or GaaS. So, what is this Gaming as a service that is causing a lot of debate? When we talk about gaming as a service, we are referring to the continuous streams and content provided by gaming platforms as a way to monetize their games after initial sale.

Gaming today is software development, and software is always updated. Many games offer their users the ability to gain extra experience points with the use of added monetization. Titles such as Destiny 2 and The Division, engage players with an online, ever-changing world in which they build a life. They also feature paid aspects called microtransactions. GaaS is a profitable avenue for publishers, however, that revenue may come at the cost of player satisfaction.

Game makers are still trying to discover the proper balance between the pay-gated content and what to offer for “free” with each developer approaching their content as an experiment. These game developers offer paid expansion packs called DLC (Downloadable content) exclusively for the audiences who don’t mind spending a few extra bucks on new content. The rise of the online multiplayer mode has also helped in making GaaS more popular, as more gamers are basically buying their skillset with money rather than long hours playing the game.This begs the question if these microtransactions are necessary?

According to Kotaku, in the late 1990s, the budget for video games represented a few million dollars. In 2000, the budget increased as the consoles were more powerful and the demand for better technology translated to a higher budget for video games. In 2010, the budget increased dramatically as an example we have Destiny where the budget was $140 million.

Game publishers have been curious about how to make more money, which has led to a massive divide between the gamers and the publishers. This has been because the cost of making new games have become expensive over the past couple of years due to the level of detail most developers are incorporating in their games. Some developers have had issues with their publishing houses — A brief search about Hideo Kojima and his stint at Konami will explain this better — due to this regard of not wanting to put money into building the experience. Can we fault the publishers, after all the gaming industry is a business at the crux of it. Also, what does it mean for the industry in terms of revenue? As an example, EA earned $1.297 million in FY 2017 only for microtransactions, demonstrating that players are now more likely to purchase extra content for the game.

So, where do we stand on the GaaS divide? On paper, GaaS is a brilliant idea. Instead of releasing a one and done game and waiting years for a sequel, developers can create an experience and update it every couple of weeks. These updates consist of new missions, areas, multiplayer modes, holiday events, and more. The idea is to engage players in a world in which they never want to stop spending time. While they can be annoying, microtransactions are a small thing to deal with in exchange for an ever-changing game. If handled correctly, that is.

Gaming has mostly been always about the experience, those hours spent staring at a device or screen, trying to hack a level or co-opt a new skill, is part of what makes gaming as interesting as it is. Exploring new worlds, and unlocking a new feature gives some form of pride to gamers, because of what it took to get there. However, with a couple of dollars, anybody can just buy the new expansion pack, that kind of diminishes the worth of it. For example, to quote what an angry reviewer said about Star Wars Battlefront II’s microtransactions “aren’t perks that provide niche benefits or severe tradeoffs in exchange for minor buffs either, these are perks that anyone would equip without a second thought because they give you an indisputable advantage over someone who doesn’t have these perks.

Finally, we need to truly question if the base prices we pay for these games are still financially realistic given the amount of money that is used to generate the game? I believe it’s now more a question of “will you be willing to pay twice the price of this game, and eliminate the expansion pack element or leave it as it is with an option for microtransactions?”