Video gaming is now the world’s largest entertainment industry – bigger than music, even bigger than Hollywood. That means, for game developers and publishers, it’s also the most profitable place to be.
Uniquely among the entertainment industries, gaming is also a tech field – it’s part of the Silicon Valley revolution, and innovation has been a core part of it since the beginning. This means we don’t always pay for the products we’re getting in the same way we pay for movies, books, or music. It also means that some of the innovations game companies use to make money have unexpected side effects.
Other than direct sales, how is the industry making its money right now, and how can it affect us?
Subscription-based monthly or annual fee models of monetization have long been the favorite of online multiplayer games, where players make regular payments for continued access to the product. In return, the game often gets continuous support, and may be updated, improved or refined over time.
The term “free-to-play” has, to a degree, become orphaned from its original meaning. Originally, this was how games could be offered for free – no initial price, no subscription – and still find a way to make money. While the game itself was free, optional in-game enhancements would be offered for extra fees. These usually took the form of performing in-game actions more quickly, or a guarantee of rare in-game items. Loot boxes are currently a very popular form of free-to-play monetization, where players use an in-game currency (bought with real money) to open an in-game container. These containers have a chance of containing rare or powerful in-game items or exclusive cosmetics, but do not guarantee the player what they want.
The free-to-play methods of monetization are no longer just confined to games with no initial purchase cost. Full-priced games, especially multiplayer ones, now often include optional ways to spend money within the game. These are still known as free-to-play mechanics due to their origins, but it’s now possible for “free-to-play” to be incorporated within full-priced games.
A way for games to make money without any cost to the player – at least directly – through in-game advertising is mostly seen in mobile games but has also made its way into big-budget markets. It’s a simple concept; game creators accept payment, allowing companies to advertise their product during gameplay. This either comes in the form of a brief commercial before play continues, or as part of the gameplay experience, much like product placement in films. For example, Mario being able to drive a Mercedes-Benz in Mario Kart, or being able to buy a Coca-Cola branded vending machine in The Sims.
The live service model is one of the latest trends to emerge from the gaming market. Acting as a hybrid between direct sale and free-to-play models, live service games can make use of various different forms of monetization. The defining feature of a live service game is that it is designed to encourage continuous consumer spending after the initial release. This could be done exclusively through free-to-play economics, or by asking players to pay a subscription despite being a single-player game.
The real-world implementation of the live service model has received significant backlash, especially thanks to some high-profile failures. Anthem, most recently, attempted to provide live service functionality, offering cosmetic character skins and outfits to buy within the game and allowing players to tackle missions together online. The game is considered a failure due to its low sales numbers and poor engagement stemming from a troubled launch and severe design issues.
Games like this, and the fact that the live service model requires an online connection even for single-player oriented games, have made it a contentious subject among players. On paper, however, there is at least scope for the live-service model to provide players with more content over a longer period, in a way which is financially viable for developers.
Problems for the consumer
The gaming industry has always been one of the most dynamic industries in the world, and with rapid changes often come mistakes and pitfalls. Larger publishers are increasingly coming under fire, with practices being perceived as anti-consumer or harmful to the player-base. Next, we’ll look at some of the issues faced by gamers.
The pennies add up
Games are compelling – it’s how they grew into the world’s largest and most successful entertainment industry. The fact that once we start enjoying a game, we want to keep playing more is fundamental to the success of the medium. The compulsive nature of some games has led to huge bills for parents whose children spend thousands of dollars on addictive games and microtransactions. Parents can find themselves hit with four- or even five-digit credit card bills when children – and even parents themselves, if they lose track – don’t realize what they’re doing or can’t stop themselves.
Gaming or gambling?
Loot boxes (containers containing in-game goodies) have begun to form a core method for games to make money, especially in mobile, multiplayer or live-service type games. As well as the controversy they create among players, they are also increasingly the subject of legal controversy, as their mechanics resemble gambling. While traditional gambling is strictly regulated in most countries, loot boxes are not subject to these regulations. Some countries, like Belgium and The Netherlands, have imposed legal regulations on loot box systems. However, the Entertainment Software Association (ESA) has ruled that loot boxes are not gambling in the U.S., as the player is always guaranteed some form of value in return for their money.
Whether they are gambling or not – the psychological action is certainly similar – players can fall into many of the compulsive traps that gambling creates. A November 2018 report from the UK’s Gambling Commission has suggested a link between loot boxes and a rise in problem gambling behaviors among children. Individuals who are vulnerable to compulsive gambling have also been affected by loot boxes and caused severe financial harm to themselves because of it.
The gray market
Games can be an expensive hobby in many different ways, so it’s no surprise that good deals and bargains are very appealing to gamers. This has paved the way for a rise in third-party websites, selling activation keys which will allow players to install a game on Steam, Origin or other distribution platforms, often for extremely low prices. This is perfectly legal from the consumer’s perspective, but there’s often no way to know exactly how the reseller acquired the activation key. It’s not a black market, but it’s not necessarily above-board all the way along the supply chain. Whether ethical or not, these resellers hold some practical issues for customers as well.
In 2015, Ubisoft began canceling game activation keys that had been obtained through third-party sites. To Ubisoft, this was simply protecting themselves against losses from credit card fraud, but many customers found that a “legitimate” key they had bought from a third-party reseller suddenly stopped working, leaving them out of pocket with no game to show for it. Gray market websites also have a history of intrusive privacy practices; some of the key resellers have required customers to allow remote access and control of their PC to see if there were any issues with the purchase.
How to stay safe
How do you play without overpaying, or falling foul of the gaming companies’ more esoteric methods of garnering your cash?
If your children play games on your mobile devices, it’s probably worth implementing parental controls, if you haven’t already done so. Check Apple or Android’s support pages for how to put a lock on in-app payments on your respective device. If you have concerns over targeted advertising and protecting your data, consider a data protection solution like Avast AntiTrack Premium.
And, of course, it goes without saying: never give your credit card to family members for use with their games.
In some ways, one of the most dangerous aspects of the gaming market is that you’re never forced to engage with it – no game ever puts a gun to your head and forces you to buy loot boxes or spend money on mining magic gems faster. It’s that lack of coercion and the fact that loot boxes always hold something – even if worthless – that keeps the process just legal.
But, for the developers to make money, transactions have to be as enticing and compelling as possible to the players, often using advanced psychology to build anticipation and fulfillment from opening loot boxes. If you suffer from compulsive behaviors or a history of gambling addiction, you need to choose carefully which games you play. Check reviews, both from customers and online publications, to get an idea if loot boxes are present or intrusive in any games you’re considering, and avoid any products that might put you at risk.
As always, one of the most important ways to stay safe is not to take risks. Don’t trust unknown names, or companies that have been shown to engage in predatory practices or support illegal activities. Avoid downloading those free, ready-cracked games from obscure third-party app sites – they’re more likely to contain malware than genuine entertainment. Bargains are always tempting, but remember the old axiom: If it seems too good to be true, it probably is.
As with anything else online, never entrust your personal or financial data to anyone who doesn’t need it, and avoid unofficial resellers of game keys or content.
The bottom line is very simple. While game producers have every right to make a profit from their creations, human nature will persuade them to make as much as possible. Many use dubious technological and psychological methods to extract as much of your money as possible. While there are some apps that can help protect you and yours, the best solution is constant awareness and a preference not to be conned out of your cash.
*** This is a Security Bloggers Network syndicated blog from Blog | Avast EN authored by Avast Blog. Read the original post at: https://blog.avast.com/gaming-industry-exploits-user-addiction