Xbox's evolving micro-transaction strategy is creating friction

On the Xbox 360, Microsoft set up a digital store allowing developers to create "add ons" for their games, spearheading the shift away from one-and-done packaged games and expansions to on-going, evolving services, cash flowed by high-margin microtransactions (MTX) and season passes.

Over the years, we've seen an increasingly fractious discourse emerge between publishers, developers, and gamers, over the value proposition of DLC-type content, and balancing quality and on-going updates against what amounts to manipulation, and possibly even just plain old greed.

This all came to a head with loot boxes, which, despite the industry's protests to the contrary, are literally gambling. Players would spend money for a chance at getting quality loot, with visual effects not far removed from that of a slot machine you'd find in the sleaziest Vegas Strip casinos. When EA attempted to turn these mechanics into a "pay-to-win" slot machine in Star Wars Battlefront II, that became the tipping point, where gamers effectively, collectively, decided enough was enough. The outrage was covered in the mainstream media and led to legislation against gambling mechanics in games.

Since then, loot boxes have slowly dispersed from many major AAA games. Or at least remain entirely cosmetic in their reward mechanics, which is generally regarded as at least palatable.

Sensing this backlash, Microsoft and other publishers removed similar features from their games, opting instead for cosmetic DLC that you purchase outright in exchange for on-going free updates. At least, in theory.

What is the cost of "free"?

Franchises like Gears of War and Battlefront did away with season passes for map packs, instead of committing to free maps to keep the community united in a single pool of content. To fund this, both games opted for loot boxes and other forms of micro DLC to keep the cash flowing, creating a feedback loop that would keep games growing, keep players engaged, and keep the cash rolling in. Both franchises experienced pretty furious backlashes to this model; however, since it created a tiered experience where players paying money could progress faster than those without the means (or stomach) to do so.

In the case of Star Wars Battlefront II, EA pivoted away very hard from that entire model, spending years getting the game back on track. For the most part, the community now seems relatively happy with the pace and quality of free updates, along with the amount of progression you can achieve without paying up extra cash. What was once a subreddit awash with anger, is now mainly celebrating the game.

The same cannot be said for other major shooter franchises from EA, including Anthem and Battlefield, which have both failed to meet their previously advertised roadmaps numerous times. Battlefield V is the first in the franchise to do away with season passes, opting instead for a cosmetic MTX funding model. The map "Al Sudan" was delayed so much, it earned itself the nickname "Al Soondone."

Source: Battlefield V Subreddit (Image credit: Source: Battlefield V Subreddit)

It's hard to speculate as to why EA has struggled to maintain pace with its updates to Battlefield, or even communicate effectively. Perhaps devs were pulled over to fix up Battlefront, owing to the deal with Disney for the Star Wars license. It may also simply be a case of people are not buying the microtransactions for Battlefield V as much as EA would like, lowering the priority for those free updates. In the case of Anthem, well, the problems with that game are fairly well-documented..

These are just a couple of examples in recent memory of games-as-a-service type titles struggling to meet their roadmaps. Delays happen, but it at least feels as though games with season passes managed to achieve their content goals more consistently.

Encroaching greed?

When games like The Witcher 3 or Monster Hunter World pile on massive, high-value expansions in addition to mountains of free content updates, it creates an expectation on other publishers to do the same. Business models vary, of course, and there are numerous factors to consider from the publisher and licensing obligations, and beyond. But for the end-user, the current climate of direct-purchasing micro DLC seems to be straddling a very fine line.

Games like Call of Duty and Gears 5, in recent years, have effectively been selling tiny bits of DLC, that effectively amount to a single flat texture, for real money. Activision was selling a single red dot for a $1, for scopes. In the case of Xbox Game Studios, Gears 5 has been selling flag textures for what amounts to about $10, since you have to purchase a specific amount of virtual currency to obtain them. Sea of Thieves also recently picked up its own virtual currency, and Minecraft is about to drop a currency-oriented cosmetic character creation system.

Related: The Coalition addresses Gears 5 microtransaction concerns

A lot of this content can be earned in-game through play, however, but publishers are pushing the line. One game where this has been particularly egregious, however, is Fallout 76. Previously announced with a DLC store that would be "cosmetic only," Bethesda has been increasingly greedy with how its "cosmetic" store works, slipping gameplay-altering microtransactions into the mix. You can now purchase valuable repair kits with real money, and a refrigerator to store food for longer periods can also be purchased. Ubisoft's recent Ghost Recon: Breakpoint has also drawn a lot of negative attention for offering "time-saving" mechanics in exchange for real money, effectively helping create a system where some players gain "soft" advantages over others for spending real money. Ubisoft has since dropped them from the game.

Whether in-game rewards can be earned through play or not doesn't matter to me. Value is subjective and determined by the individual. However, when a vast majority of the incentive to progress and continue playing is tied up to these cosmetics or items, which can be "earned" with a credit card, I'd argue that it devalues the sense of progression felt by the broader player-base at large. If I have paid a premium price for a game, I shouldn't have to then pay extra to play the game "optimally." Where do we draw the line here, exactly?

The verbal contract

I'm not ignorant of the irony of this article, considering we offer free content in exchange for showing you tons of ads, but therein lies the conflict inherent of a "freemium" service model. I reckon games like Sea of Thieves, Monster Hunter World, and Minecraft offers a ton of value in exchange for offering cosmetic content on the side. Many other games don't seem to have earned their way to that, though.

Where do we draw the line here, exactly?

These issues might be symptomatic of simply not having a season pass, lowering priorities on the part of developers to deliver those free content updates in a timely fashion. But like EA found with its monetization of Star Wars Battlefront II, you can only push that "monetization" so far before it becomes frustrating. "Free" updates form the basis of a verbal contract between the community and the developers more vaguely than season passes or subscriptions did. The roadmaps seem more fluid, in a way that requires on-going communication, community maintenance, while managing perpetually shifting publisher priorities.

For developers caught in the crossfire between the expectations set by their customers and financial goals set by publishers, they're often forced to bear the brunt of the community's ire. At the end of the day, though, customers are the ones setting these prices, since they seem willing to pay up. Whether or not chasing those "high-value" paying players is worth the negative community sentiment is hard to measure.

It seems like in the near term, publishers, including Xbox, are going to continue pushing aggressively for these sorts of on-going monetization to cashflow content that keeps players engaged. At least, that is, until another company takes it too far again.

What do you think? Hit the comments, let us know.

Jez Corden
Managing Editor

Jez Corden is the Managing Editor for Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

  • According to NPD, the second best selling game in August was Minecraft and the third was Grand Theft Auto V (ignoring the annual Madden entry). The rest of these games are not even mentioned. So, perhaps game developers should look at what has caused these two game to stick around for so long in the top sales lists and emulate that rather than trying to emulate the Android mobile games monetary scheme.
  • I think people have said the same thing regarding GTA and shark cards. Some are against micro transactions period, regardless if they are cosmetic. Remember, this all started because of Horse Armor (this is what the article refers to in Oblivion on the 360) , and that had HUGE outrage. I agreed with Jez when he spoke about this in the podcast last week. These may be cosmetic, but at the same time they just 'feel' greedy.
  • Sure GTA has its fair share of these things, but the case is still that the game (for reasons I do not understand) still keeps selling by the bucket load.
  • I pretty much only play the campaigns of any game. So I really don't get affected at all. Even when I have played an online portion of a game I've never in my entire gaming life purchased Micros. And have never felt I'm missing out. At all. As long as I get free maps etc like Halo 5 has done. And Gears 5. Then I'm entirely happy. If someone has a skin I don't have it doesn't bother me if I'm in the top step after the battle is over.
  • I blame this squarely on Fortnite. Worst thing ever happened to gaming.
  • This started LONG before Fortnite even existed.
  • That being said, Fortnite made 2.4 BILLION dollars last year. If you can think of a single other game that has made that kind of money from individual sales and not through microtransactions feel free to let me know, until that actually happens though, welcome to the future of gaming.
  • Difference being Fortnite is free. You expect MTX in a free to play game, after all, it has to make money somehow. Gears 5, Ghost Recon, CoD, SoT, they are premium games with a fairly high asking price.
  • Bit different still. The fre part of Fortnite is only the multi-player. You have to pay up front for the single player part of Fortnite. With Gears 5 for example you are getting a AAA single player story driven experience. 15 hours of campaign. Similar length to God Of War for example. You also get a full fledged multi-player mode with it also. So you can't really compare Fortnite free to Gears 5 when it's missing a AAA campaign in the free version.
  • I'm pretty sure no one plays Fortnite single player. Also Gears 5 is nowhere near a 15 hour campaign, I got it done in less than ten, completing the side missions as well. Great campaign though. But my point was people spent nearly two and a half BILLION dollars on a single game due to microtransactions. Are people really surprised that publishers are scrambling to find a way to fit them into their games?
  • Well regardless the 2 games are charging up front for different content. But yes I see your point about making money. Thing is while people out there are spending money on MTX, companies will provide it.
  • Yes, but my point is it made 2.4 billion dollars. That is huge. Yes you could argue that the free access allowed more people to play it and as such more punters to spend their cash, but even still, that is a ridiculous amount of money.
  • Microtransactions are here to stay because they make developers money. Especially given the fact that publishers are moving towards streaming subscriptions and things like Game Pass where you aren't specifically paying the $60 entry price for the game. Gears 5 has made a quarter of the sales that Gears of War 4 did in the same period, so microtransactions pick up the slack. Obviously Microsoft also makes money off of Game Pass which is all they care about, not sales, but it is still telling. I would be VERY interested to see how many Gears 5 players there are in another month, after everyone's 2 months for $2 is up, I expect PC to become a veritable ghost town (steam especially so, but it already was, with a whopping 11,000 players at launch). The fact of the matter is services like xCloud, Stadia, Game Pass, PlayStation Now (if they decide to bring it to more than what, three countries?), EA Access, etc will be the main driving force behind MTX sticking around because people actually WON'T be paying full price for games, everything will be "free". On a side note, the MTX sales for Halo 5 must have been astronomical. it was touted as making $400 million in its opening week, now lets do an average of $80US per sale (as a way to bridge between the standard price and collector's editions) and if it had reached 3 million players (which it clearly didn't, because they are saying that Gears 5 hit a milestone) that would equate to approximately $240 million, so still $160 million shy of its actual earnings, the only way to make up that difference is in MTX. Maybe there is an absolute buttload of people that own the Xbox One and don't have it connected to the internet, but I doubt it, I certainly doubt there is that many.
  • I wondered the same about Forza Horizon 4 online numbers due to releasing on Gamepass. But I was shocked to recently find out Forza Horizon 4 has had over 4 million players every single month since launch play online. That's a really impressive number for a game on Gamepass. Based on that evidence I'd say players will. Continue to keep their subscription going. As they have on Horizon 4. I think FORZA Horizon 4 also hit over 13 million players 6 months ago. Or recently. So Gamepass based on that evidence is keeping its subs. The reason Steam was so bad on Gears 5, is because it's free on Gamepass PC. Why would anyone pay £40 to rent the game off Steam (you don't own the game on Steam) when you can rent it off Gamepass for £4 a month.
  • It's the PC players I expect to not stick around after their initial two months are done, I already know half a dozen people who won't renew, I suspect there will be more.
  • There will be some that do. I agree. But I get the impression from Gears 5 onwards their is a regular stream of great content that hits Gamepass PC at launch. As an example, The Outer Worlds, Ori 2, Battletoads, off the top of my head in thr next 3 months.
  • Oh believe me, you're preaching to the choir, but it's going to be an uphill struggle to get PC gamers out of the Steam only mindset. Having them pay a monthly sub ( every though PC started the craze with MMO's) for something will be tough sell.
  • Looking at a couple of 2019 games I'm into as examples I'm happy with: The Division 2: All additional content is free in the first year, with added bonus content for buying the season pass. MTX purely cosmetic. I'm OK with this, because unless you want more content, you're not losing out by not buying the pass. GRID: Buy the season pass, get more stuff. No MTX. Perfect. If someone likes a game and wants more, given them the option to buy more without nickel and diming.
  • Great article Jez, as usual!
  • I'm fine with microtransactions, I hate loot boxes though, so long as I can buy what I want I am happy. Open up an avenue to get premium currency in game (a la, Neverwinter and now Elite Dangerous as well) and I'm even happier.
  • The biggest thing is making sure good game developers are able to make new games and content with a profit as a business, and not run into situations where they cant compete with staff to continue making content.
    Making a quality game and creating content that is going to hold up to the standards the consumer expects isn't cheap. But on the other side, as consumers we have the ability to voice our opinions s and call out developers that display a level of greed that isn't acceptable. Also, if your using your past release positive exposure to sell a subpar product needs to be held accountable.
    I have noticed that a trend from consumers that is growing, is the pre-order market is really causing friction. Consumers pre-order and end up being put in a situation that they feel cheated when they where the main supporters of the title.
    I think the market needs to require developers clarify the wording they use, an annual pass should start at that point and cover anything for the annual period.
    As a gamer that got started with Nintendo original, the amount of noise in reviews has started to drown out quality feedback to developers.
    It's all a fine line that is hard to really see all the factors.