“The Price of Entertainment in the 21st Century”

Why the price of a game matters

by Steven Harmon, University of Southern California

Prof. Brett Michael Gordon

WRIT 150

22 March 2018


This article examines free to play, pay 2 win, gotcha systems, and other in-game monetization practices in regard to inhumane design and the dehumanization and devaluing of the individual through user experience - and how these practices affect in-game toilet representation.

Keywords: game price inflation, DLC (downloadable content), micro transactions, pay to win, free to play (f2p), gotcha systems (lootboxes), social games, schedules of reinforcement, conditioning, ARM (acquisition retention monetization), gamification, toilet, videogame toilets,

How much a society values art and entertainment says something about its values, and if a society doesn’t value art enough to warrant an upfront premium for it, then art will find a way to get its worth. The price of video games matters. Not only does pricing effect the type of content being made but also the influence that content will have on other mediums’ design and pricing. The price of videogames currently is at an all-time low. Since the introduction of discs to gaming distribution (around the same time toilets started to show up in games) the average price of popular commercial games has averaged and stayed at $60 USD. However, the cost of development budgets and team sizes has gone up. To offset this cost and make a profit game companies have turned to different monetization tactics and pricing models in regard to microtransactions and free-to-play that have incentivized inhumane and predatory design harmful to the end user. These harmful exploitative practices have carried over into other aspects of our lives through the guise of freemium social apps as a service and are actively dehumanizing and devaluing the individual as a whole by conditioning them to be compliant in becoming into a resource. Not only are these practices bad for the consumer, but toilet representation as well.

I am a game designer and writing this paper could possibly lose me job opportunities in the future because it’s something that many in my industry don’t want to hear. Games, more often than not, are scapegoats for society’s problems such as gun violence, so it’s hard to admit that games have any negative effect on people at all. Nevertheless, games do have an effect on people’s lives and wallets and we as an industry need to face that responsibility and rethink our ethics in what we ask of our players as well as what we collect from them.

Growing up with games, ever since they’ve moved past cartridges, new commercial releases have always costed $60 regardless of console - it’s been the standard. Ars Technica in 2013 conducted a study of the average retail price of console games adjusted for inflation and the average price after around 2002-2004, the introduction of discs to gaming, has averaged and “topped out around $60” (Gitlin & Orland 2013). Yet, according to the U.S. Bureau of Labor Statistics the average rate of inflation of the U.S dollar has risen to 2.2% per year (see figure 1 at the bottom), which means that the value of goods has risen 35.2% in the past 16 years. Therefore, commercial triple AAA games should now cost $95. However, they don’t cost $95. Or not upfront at least.

Figure 1: Average rate of Inflation graph & spreadsheet

At first game companies made their games perpetual and sold additional content packs “DLC” aka downloadable content, essentially packaging up and distributing the full experience in parts and the problem with that model was how many of these games that were all vying for attention and that meant risk. The creativity and innovation of the games released were affected due to the financial risk for shareholders investing in these game publishers. Single player games are dying. Meaningful games with stories are becoming less financially viable to create due to how hard they are to monetize effectively as other genres such as competitive E Sports and social games. It’s becoming such a big deal that even Bethesda launched a marketing campaign titled #SavePlayer1 to reaffirm its devotion to crafting these experiences amidst a multiplayer market that looks at the bottom line. Doesn’t that bother you? It should! With game budgets ballooning over $200 million (Superannuation), it was only logical for many publishers to repeat what success there was already data on which resulted in a lot of generic military shooters with progression systems and fast core game loops designed for the player to keep playing until the next even more addictive iteration came out.

I can recall playing Call of Duty: Modern Warfare 2 regularly for almost an entire year and by the time I had unlocked the final weapon the next game in the franchise: Black Ops was released; it was perfect timing expertly crafted. In psychology these game feedback loops are closely tied to secondary reinforcers and operant conditioning that are “rewarding certain behaviors [to] encourage […] behaviors in the future. […] Primary reinforcers are only reinforcing if the subject is in a state of deprivation. [Whereas] utilizing secondary reinforcement allows the trainer to continue delivery reinforcement even if the subject does not have any biological needs at the moment. This reinforcement is less susceptible to satiation” (Cherry) Games boost their engagement and player retention, which also increases their profit, by designing their games around reward schedules with a high and steady rate of response. It’s so much more than conditioning responses in the case of dogs salivating at a bell, but conditioning volition – the way we make choices, making games even more effective skinner boxes that have the added bonus of intrinsic motivation inside them. Games and apps today are designed to keep you interacting with them well past the point of you needing or even wanting to interact with them. Most recently games have adopted the most effective schedule of reinforcement of the four, variable ratio operant conditioning which is reinforcement at unpredictable quantities regardless of the amount of time passed aka slot machines. You know what isn't a slot machine? A toilet.

While some games have utilized Pay 2 Win structures for free-to-play games, players expect games to be egalitarian in nature and usually resent when paying players have an unfair advantage over the non-paying players and the only way to compete is to sink large amounts of time into earning this token currency that can be bought for real world money. The fix to even the playfield, but also retain the virtual economies is in purchasable cosmetic items. For instance, hats in Team Fortress 2, gun decals in CS:GO, and player avatar skins and voice overs in Overwatch. Enter the loot box, a consumable item that once opened gives the user a random assortment of items that *hopefully* are rare. Some games such as Valve’s shooters Team Fortress 2 and CS:GO require users to spend real world money for keys to unlock them and others like Overwatch reward invested, both skilled and monetarily, players with them. Loot boxes function identically to slot machine gambling and are regulated in China under their gambling law and are currently under investigation in many other countries including our own. The ESRB Entertainment Software Rating Board in an interview with Kotaku said the “ESRB does not consider loot boxes to be gambling. While there’s an element of chance in these mechanics, the player is always guaranteed to receive in-game content (even if the player unfortunately receives something they don’t want)” (Schreier) Essentially the player is paying for the experience of having a surprise and not the surprise itself. The value of the loot from these loot boxes, while virtual, is very real and can easily be transferred “traded” and sold on marketplaces such as the Steam community market and exchanged for real world credit that can be used to buy things online such as more games on the platform. Regardless of being legally classified as gambling or not, the loot crate monetization technique still affects and targets those with gambling addiction. What's harmful about toilets? Not much, despite what the Wikipedia entry for Toilet-related injuries and deaths will try to have you believe. Toilets aren't inherently dangerous to those whom face addiction whereas gotcha systems and loot crates are.

According to a report by Swrve “0.15% of Mobile Gamers Contribute 50% of All In-Game Revenue” and while Swerve goes on to call this category of loyal customers “big spenders”, designers have a different name for them: whales. Just a few individuals who may or may game not have the disposable cash to repeatedly spend on all the available microtransactions in a game and yet still do. To the defense of targeting those with addictive personalities in the mobile sector to generate revenue in terms of ethics, the classic defense is “game developers must eat too and it’s the whale’s choice to spend absurd amounts of money on a game”, a roughly paraphrased account of what some of my peers and teachers have stated in the past. The argument holds up fine, but it doesn’t change the fact that these “whales” are the targeted customer persona that game publishers selectively market towards and prey on to abuse their psychological weaknesses. Weaknesses such as our own impatience in an age of shorter attention spans thanks to the convenience of the smart phone and instant gratification. A typical core game loop of free-to-play social games turns “frustration and stress” into cash, “the farther the user is progressing into the game, the more yield there is from each producing entity, but also the longer the time delay is. […] The user has a choice to make in-game purchases of virtual content that will […] rush the in-game timers. […] Hence, playing on the impatience of the user created by the need to wait all the time, the game is offering a quick solution to relieve impatience through purchases of packs of cash” (Lescop, 117) The very nickname “whale” itself reduces the consumer to the level of animals, fat animals to be used up for all their good for: their money, their time, and their friends. Even if the primary argument and justification for this exploitation is pro creator it still exists as a point of contention in the game developer community. Even from the beginning, “concern about Social Games and F2P games was pervasive at GDC [game developers conference] in 2010 and 2011. Many of those working in the "social" space were simultaneously demonized and lauded as the future of games. […] The attacks on the ethics of social games were so resolute during GDC 2010, that the 2011 rant session was titled, "No Freaking Respect! Social Game Developers Rant Back." (O’Donnell, 354)

So how did we get here? Why have games moved towards free-to-play with microtransactions when they should have raised their standard $60 premium? Why are we bundling games together for dirt cheap instead of valuing them at more? How come all the top grossing apps on the app store are all free with in app purchases and gamified elements? (App Annie) The main two commonly accepted causes are the “historical tendency for the telecom operators and device manufacturers to make a limited number of mobile games available free of charge to the end users of feature phones. [that] adds value to the device and increases its attractiveness […] making the end user accustomed to having the content free of charge” and a lowered barrier of entry for the mobile market where indies and amateur developers were quick to have a race towards the bottom to “try their luck in the newly emerged marketplace” (Lescop, 104). However, I believe in today’s market there’s only two routes to make money in games. The first is value, premium franchises that already have familiarity. Most of the top grossing apps on the app store that have a premium price point are from existing franchises or IPs. For instance, Minecraft, NBA2k18, Grand Theft Auto, and Terraria were already established and successful games before going mobile or Heads Up!, a game that Ellen DeGeneres was able to virally spread through her show. The Other route is through sheer volume of users, because more users means more eyes, more ad impressions, and more monetization opportunities.

To get a start in games as an independent, the most effective path I’ve witnessed has been to make and release as many games as possible and accrue an audience to support you and your work. Even I am contributing to this trash games culture of volume above all else and it’s that dichotomy of value vs volume that floods the market with filler content making discoverability near impossible leaving people to trust brands they already know and lessened the value of games since they’re now literally “a dime a dozen”. This market isn’t helpful for the consumers nor the creators of games and the coping mechanisms in this free-to-play world have carried over into other aspects of our lives through a process called gamification.

Gamification in theory is about carrying over the aspects of games that taps into people’s wants from learning and mastery to competition and self-expression. Gamification is normally discussed in an educational context to make learning more engaging or in a health context where people are motivated to exercise within a game like social system of progression and competition that has rewards. However, more often than not, gamification is abused. The most notorious scary real-world example of this gamification abuse practically ripped out of an episode of Black Mirror is called Sesame Credit, China’s most notorious “social credit” system that works similar to a credit score for credit cards. Sesame Credit rates people based on how good, and obedient, a citizen they are, it’s tied to all social media, purchases though Alibaba, lifestyle, everything. (Hatton) Friends are incentivized to correct their lower scoring friend’s behavior by means of peer pressure or disassociate from them entirely. “Anybody can check anybody’s Chinese credit score today using the site Credit China, which helps – no, nudges – people to disconnect from friends and acquaintances who significantly draw down your own credit score merely by association” The system also has tiers like games do that offer benefits such as ease of getting a travel visa fast track (Falkvinge) Sesame Credit isn’t the only social credit system competing to become China’s 2020 mandatory system, companies like Tencent are also testing out their own credit system and partnerships. (Xiao) Also, for your information, Tencent is the largest game publisher worldwide that is known to own Riot Games and have major stock in EPIC and Activision and Blizzard. While it may sound like dystopian fiction, these gamified social systems are real and are actually becoming widely accepted for the same reasons it’s hard to put down the controller because you just want to play “one more round”.

Being an obedient citizen isn’t the only thing being gamified. Tinder has gamified hookup culture and reduced people to superficial first glances and swipes and made dating a numbers game. There’s even a feature on Tinder when creating your profile to highlight the “statistically most effective” profile photo you feed it. Tinder incentivizes you to play within its system to get matches and conditions people to rethink their standards and appearances. Uber and Lyft have gamified taxi services with referrals and free rides. Facebook and Google have gamified your privacy for convenience. Snapchat has trophies, because why not try to gamify communication? Lively animations, juicy sounds, and haptic feedback that gives the user a little dopamine rush each time they successfully use the app as a regular service and reward loyalty. These systems are everywhere from your local coffee shop’s revamped punch card styled reward system to insurance good behavior policies and they all follow trends in modern game design that don’t consider that people have lives. Our lives revolve around our smart phones, our apps… The price of games affects everything and if consumers don’t demand a more straightforward and honest pricing model, then they will become complicit to their own loss of humanity through inhumane design and greed. This paper isn’t some slippery slope, it’s a warning.

So what does this all have to do with toilets? Good games have toilets and if predatory monetization practices go away for mobile & social games and repetitive formulaic progression system design goes away for big budget games, then games will no doubt become better- games will no doubt feature more toilets. It’s as simple as that. Better games = more toilets inside our games.

Works Cited

Cherry, Kendra. “How Secondary Reinforcement Helps Condition Behavior.” Verywell Mind, 13 Mar. 2018, www.verywellmind.com/what-is-secondary-reinforcement-2795415.

“Inflation - Bureau of Labor Statistics Data.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, data.bls.gov/timeseries/CUUR0000SA0L1E?output_view=pct_12mths.

Orland, Kyle, et al. “Why Retail Console Games Have Never Been Cheaper, Historically.” Ars Technica, 30 June 2013, arstechnica.com/gaming/2013/06/why-retail-console-games-have-never-been-cheaper-historically/.

Schreier, Jason. “ESRB Says It Doesn't See 'Loot Boxes' As Gambling.” Kotaku, Kotaku.com, 11 Oct. 2017, kotaku.com/esrb-says-it-doesnt-see-loot-boxes-as-gambling-1819363091.

Superannuation. “How Much Does It Cost To Make A Big Video Game?” Kotaku, Kotaku.com, 15 Jan. 2014, kotaku.com/how-much-does-it-cost-to-make-a-big-video-game-1501413649.

“Swrve Finds 0.15% of Mobile Gamers Contribute 50% of All In-Game Revenue.” Swrve, 26 Feb. 2014, www.swrve.com/company/press/swrve-finds-015-of-mobile-gamers-contribute-50-of-all-in-game-revenue.

Lescop, Denis, and Elena Lescop. "Exploring Mobile Gaming Revenues: The Price Tag of Impatience, Stress and Release." Communications & Strategies, no. 94, 2014, pp. 103-122,154, ProQuest, http://libproxy.usc.edu/login?url=https://search-proquest-com.libproxy2.usc.edu/docview/1545557095?accountid=14749.

O'Donnell, C. (2014). Getting played: Gamification, bullshit, and the rise of algorithmic surveillance. Surveillance & Society, 12(3), 349-359. Retrieved from http://libproxy.usc.edu/login?url=https://search-proquest-com.libproxy2.usc.edu/docview/1556334064?accountid=14749

“Top Apps on IOS Store, United States, Overall, Mar 31, 2018.” App Annie, www.appannie.com/en/apps/ios/top/.

“Toilet-Related Injuries and Deaths.” Wikipedia, Wikimedia Foundation, 10 July 2018, en.wikipedia.org/wiki/Toilet-related_injuries_and_deaths.

Hatton, Celia. “China 'Social Credit': Beijing Sets up Huge System.” BBC News, BBC, 26 Oct. 2015, www.bbc.com/news/world-asia-china-34592186.

Falkvinge, Rick. “In China, Your Credit Score Is Now Affected By Your Political Opinions - And Your Friends' Political Opinions.” Private Internet Access Blog, 7 Oct. 2015, www.privateinternetaccess.com/blog/2015/10/in-china-your-credit-score-is-now-affected-by-your-political-opinions-and-your-friends-political-opinions/.

Xiao, Eva. “Tencent’s New Credit System to Use Payments, Social Data.” Tech in Asia - Connecting Asia's Startup Ecosystem, 31 Jan. 2018, www.techinasia.com/tencent-credit-launch.