WEBVTT - The Problem With Live Service Games 0:00:04.440 --> 0:00:12.280 Welcome to tech Stuff, a production from iHeartRadio. He there, 0:00:12.280 --> 0:00:15.600 and welcome to tech Stuff. I'm your host, Jonathan Strickland. 0:00:15.600 --> 0:00:18.479 I'm an executive producer with iHeart Podcasts and how the 0:00:18.560 --> 0:00:23.279 tech Are you well. Welcome to our continuation on the 0:00:23.360 --> 0:00:27.480 topic of games as a service or live service games. 0:00:28.040 --> 0:00:30.600 If you missed Monday's episode, I recommend you go and 0:00:30.680 --> 0:00:33.560 check that one out first. But in general, we're talking 0:00:33.720 --> 0:00:37.520 about the tendency for video game developers to move toward 0:00:37.640 --> 0:00:41.840 generating games that have a long tail for revenue, whether 0:00:41.920 --> 0:00:46.279 that's setting up a subscription model or micro transactions or 0:00:46.320 --> 0:00:49.760 something else. I left off last time alluding to how 0:00:49.800 --> 0:00:53.320 some developers and publishers started to require gamers to have 0:00:53.440 --> 0:00:56.880 a persistent Internet connection for their games. That's where we're 0:00:56.920 --> 0:00:59.280 going to pick up today. These are games that would 0:00:59.360 --> 0:01:03.440 require players to have an Internet connection even if the 0:01:03.480 --> 0:01:07.640 game they were playing otherwise had no online component to it, 0:01:07.760 --> 0:01:12.119 like no multiplayer, nothing else. So this was all part 0:01:12.360 --> 0:01:16.520 of a DRM strategy or digital rights management. Still very 0:01:16.600 --> 0:01:21.319 much something that's happening today, but you know, a decade ago, 0:01:21.800 --> 0:01:25.840 this was kind of a new idea. Back in twenty eleven, 0:01:26.360 --> 0:01:30.840 Ubisoft released a PC version of the game from Dust 0:01:31.400 --> 0:01:34.240 from Dust in case you're not familiar with it, I wasn't. 0:01:34.560 --> 0:01:37.640 This is not one of the Ubisoft titles that I've played, 0:01:37.959 --> 0:01:40.320 but anyway, it's a game in which you play is 0:01:40.440 --> 0:01:44.280 kind of a god. You're manipulating landscapes so that your 0:01:44.319 --> 0:01:49.320 worshippers can establish communities and prosper, kind of like Populous 0:01:49.360 --> 0:01:52.120 if you remember those old games. The PC version of 0:01:52.160 --> 0:01:55.360 the game required an Internet connection in order to even launch, 0:01:55.840 --> 0:01:58.440 but the game itself was a single player experience, so 0:01:58.520 --> 0:02:00.960 if you didn't have an Internet connection, the game would 0:02:01.040 --> 0:02:04.320 not even start. You'd be Soft apparently posted a message 0:02:04.320 --> 0:02:07.040 at some point that said you could play the game 0:02:07.320 --> 0:02:10.799 with on Internet connection at least after the first play session, 0:02:10.840 --> 0:02:14.720 where you would register your copy. But according to sites 0:02:14.760 --> 0:02:17.920 I was looking at various media outlets tested this and 0:02:18.000 --> 0:02:20.959 found that not to be true. So the whole purpose 0:02:21.280 --> 0:02:24.160 of this particular practice was to cut back on piracy 0:02:24.560 --> 0:02:27.560 and to require players to prove that they were playing 0:02:27.639 --> 0:02:30.600 on an authorized copy of the game. That you're presumed 0:02:30.600 --> 0:02:34.160 guilty until you prove yourself innocent. In other words, now, 0:02:34.200 --> 0:02:37.560 as I mentioned in the previous episode, one thing game 0:02:37.600 --> 0:02:42.200 companies really want to eliminate is the video games after market. 0:02:42.880 --> 0:02:47.640 That's bad for gamers because you know, sometimes I remember 0:02:47.680 --> 0:02:50.000 doing this myself. You go to a game store and 0:02:50.040 --> 0:02:53.560 you look at the used games and say like, well, 0:02:53.639 --> 0:02:56.840 I can't really afford to buy this brand new, but 0:02:56.880 --> 0:03:00.240 I can buy a used copy and experience this game. Well. 0:03:00.240 --> 0:03:03.240 Game companies hate that because they don't make money on 0:03:03.320 --> 0:03:07.200 any subsequent sales of used copies. They only make money 0:03:07.240 --> 0:03:11.200 if you're buying the new ones. So moving to a 0:03:11.400 --> 0:03:16.520 digital realm where digital distribution becomes the norm as opposed 0:03:16.520 --> 0:03:19.000 to physical media, that would be a huge benefit to 0:03:19.040 --> 0:03:22.639 the video game companies for lots of reasons. It cuts 0:03:22.680 --> 0:03:25.480 down on production costs because you don't actually have to 0:03:25.520 --> 0:03:27.760 make anything. Physical cuts you know, you don't have to 0:03:27.800 --> 0:03:32.840 ship anything, you don't have to have warehouses to store inventory. 0:03:33.240 --> 0:03:35.680 There are a lot of things that it solves. But 0:03:35.840 --> 0:03:40.400 it opens up the possibility of piracy. And there's not 0:03:40.440 --> 0:03:43.400 a publisher out there, no matter what kind of media 0:03:43.440 --> 0:03:47.240 we're talking about, that isn't up in arms about the 0:03:48.080 --> 0:03:51.480 possibility of piracy, not even if piracy is even happening. 0:03:51.800 --> 0:03:54.880 We've heard in the past about how companies have argued 0:03:54.920 --> 0:03:58.520 they have lost millions or even billions of dollars due 0:03:58.520 --> 0:04:01.160 to piracy. Although this is all always a difficult argument 0:04:01.200 --> 0:04:04.040 to make because, as I have said many times, you 0:04:04.120 --> 0:04:06.680 can't point to piracy and say that's the same thing 0:04:06.720 --> 0:04:10.200 as lost sales because there's no guarantee that the people 0:04:10.200 --> 0:04:14.400 who pirated the stuff would have purchased it legitimately. Otherwise 0:04:14.720 --> 0:04:17.960 you can't make that argument. But it's obvious that piracy 0:04:18.000 --> 0:04:22.400 could have a massive impact. So this is particularly understandable 0:04:22.400 --> 0:04:25.479 with the digital landscape. It is incredibly simple to make 0:04:25.520 --> 0:04:29.520 copies of stuff. It's almost effortless to do so, right, Like, 0:04:29.560 --> 0:04:32.520 you could just make a copy available on something like 0:04:32.520 --> 0:04:35.359 a peer to peer sharing network or a server or something, 0:04:35.680 --> 0:04:37.640 and that's all there is to it. You don't have 0:04:37.720 --> 0:04:41.479 to like sit down and transfer tapes to disc and 0:04:41.520 --> 0:04:44.320 all that kind of stuff. So companies have spent a 0:04:44.360 --> 0:04:46.960 lot of time and effort developing strategies to prevent people 0:04:47.000 --> 0:04:50.040 from being able to do that. The problem for gamers 0:04:50.600 --> 0:04:53.719 is that these measures often create a negative experience for 0:04:53.839 --> 0:04:57.080 people who have purchased a legitimate copy of the game, 0:04:57.400 --> 0:05:02.520 and if anything, that kind of actually encourages more piracy 0:05:02.560 --> 0:05:04.800 attempts because people will try to find a way to 0:05:04.839 --> 0:05:07.479 strip DRM out of games so that they can have 0:05:07.520 --> 0:05:11.919 an unfettered gaming experience. Like when the experience of playing 0:05:12.120 --> 0:05:16.360 a legitimate copy of a game is worse than playing 0:05:16.440 --> 0:05:19.080 a pirated copy, people are going to start pirating more. 0:05:19.440 --> 0:05:23.000 It's been argued many times that DRM has made piracy 0:05:23.080 --> 0:05:27.680 worse rather than prevented it. Anyway, Ubisoft's move was a 0:05:27.680 --> 0:05:30.440 pretty rough one, and to say that people were upset 0:05:30.680 --> 0:05:33.839 is putting it mildly. Though they might be more upset 0:05:33.880 --> 0:05:36.359 if From Dust had actually been a more popular game. 0:05:36.440 --> 0:05:39.960 I don't know if they were like diehard From Dust fans. 0:05:40.000 --> 0:05:43.240 I honestly had not heard of this game before. Diablo three, 0:05:43.279 --> 0:05:47.640 which inarguably had a much higher profile than From Dust, 0:05:47.680 --> 0:05:51.000 had similar criticisms thrown its way. Diablo three is a 0:05:51.000 --> 0:05:54.719 game from Blizzard, and the Diablo franchise has been a 0:05:54.720 --> 0:05:57.480 really popular one over the years. It's also no stranger 0:05:57.560 --> 0:06:00.760 to play or frustration. There have been some pretty notable 0:06:00.800 --> 0:06:06.080 outcries from players relating to Diablo. Like From Dust, Diablo 0:06:06.240 --> 0:06:11.039 three required and always on connection because of DRM. But 0:06:11.279 --> 0:06:15.080 unlike From Dust, Diblo three also had a few benefits 0:06:15.360 --> 0:06:19.359 that derived from that persistent online connection, stuff like you know, 0:06:19.520 --> 0:06:22.440 leader boards and that kind of thing. So you could 0:06:22.520 --> 0:06:26.240 argue there was at least some additional value for the 0:06:26.279 --> 0:06:30.599 player for connecting online for each session, you know, beyond 0:06:30.680 --> 0:06:32.960 just being able to boot up the game and play 0:06:32.960 --> 0:06:35.440 it in the first place. But people were still upset 0:06:35.440 --> 0:06:37.920 that a single player game would require an Internet connection 0:06:38.000 --> 0:06:40.240 at all. And I get it. You know, I've lived 0:06:40.240 --> 0:06:43.600 in places that have had really spotty internet, and I've 0:06:43.640 --> 0:06:46.120 also taken games with me on trips where I've gone 0:06:46.120 --> 0:06:48.720 to places where there was no Internet connection at all. 0:06:48.920 --> 0:06:51.719 It is beyond irritating when you fire up a game 0:06:52.120 --> 0:06:55.479 that you have paid for, perhaps even paid full price for, 0:06:56.120 --> 0:06:59.080 and because of a lack of Internet connection, you can't 0:06:59.160 --> 0:07:01.880 launch it because the game just assumes you're a nasty 0:07:01.920 --> 0:07:05.080 little thief. Like again, you are presumed to be guilty. 0:07:05.240 --> 0:07:08.080 It's pretty insulting after you've dropped like sixty or seventy 0:07:08.160 --> 0:07:11.080 dollars on a title. Anyway, this whole thing is a 0:07:11.080 --> 0:07:13.520 bit of a tangent from games as a service. It 0:07:13.600 --> 0:07:17.000 is related, I would argue, but it's not directly connected 0:07:17.000 --> 0:07:20.200 to it. I guess the persistent internet connection element, however, 0:07:20.240 --> 0:07:22.640 would become a component for a lot of these live 0:07:22.760 --> 0:07:26.520 service games. It's what enables companies to create a stream 0:07:26.600 --> 0:07:31.320 of updates and content releases that keeps players engaged in 0:07:31.440 --> 0:07:35.280 particular games, and it opens up opportunities for these companies 0:07:35.280 --> 0:07:38.520 to make more money. Now. In that last episode, I 0:07:38.560 --> 0:07:43.640 also talked about MMO games that's massively multiplayer online games. 0:07:43.920 --> 0:07:48.760 I specifically talked a lot about mmoorpgs. The RPG stands 0:07:48.760 --> 0:07:51.080 for role playing game. Just in case you're not familiar, 0:07:51.400 --> 0:07:56.080 Nearly all of the early mmoorpgs worked on a subscription 0:07:56.280 --> 0:07:59.080 model in which gamers would have to purchase a copy 0:07:59.120 --> 0:08:02.120 of the game. You buy a copy, but then you 0:08:02.120 --> 0:08:04.960 would also have to pay a recurring monthly fee to 0:08:05.080 --> 0:08:09.600 access the online servers that hosted the game. Typically, the 0:08:09.600 --> 0:08:12.920 purchase would come with a certain number of months added 0:08:12.960 --> 0:08:15.880 in to or bundled in with that price, so that 0:08:15.960 --> 0:08:19.040 you're not, you know, paying fifty bucks for a game 0:08:19.080 --> 0:08:21.800 and then immediately having to pay ten or fifteen dollars 0:08:21.840 --> 0:08:25.040 a month to play it. But eventually, you know, even 0:08:26.000 --> 0:08:29.960 if you didn't mind the fee, you would potentially run 0:08:30.080 --> 0:08:33.640 up to a problem where you have experienced kind of 0:08:33.679 --> 0:08:37.320 like everything the game has to offer. So at that point, 0:08:37.600 --> 0:08:40.520 a company might see subscriber numbers start to drop off, 0:08:40.800 --> 0:08:43.560 and the costs of running servers so that you know, 0:08:43.679 --> 0:08:48.240 remaining players could continue to access the game would continue, right, like, 0:08:48.840 --> 0:08:52.920 the cost of supporting that game doesn't go away just 0:08:52.960 --> 0:08:57.160 because some people are leafing. So this meant that there 0:08:57.240 --> 0:08:59.800 was an incentive for companies to come up with ways 0:08:59.840 --> 0:09:03.440 to keep players staying on the game for longer, to 0:09:03.520 --> 0:09:06.760 keep them gauged, so they would start to generate new 0:09:06.840 --> 0:09:10.679 content in order to do that. Now, some mmrpgs would 0:09:10.720 --> 0:09:13.440 require players to spend a decent chunk of change to 0:09:13.559 --> 0:09:17.160 access that new material. So World of Warcraft, for example, 0:09:17.520 --> 0:09:21.960 has had nine major expansion packs released since the game 0:09:22.000 --> 0:09:26.000 first debuted, and these expansions typically introduce a lot of 0:09:26.120 --> 0:09:29.920 new content. Sometimes it actually changes existing areas in the 0:09:29.960 --> 0:09:35.559 game dramatically at times, and this reflects massive story elements 0:09:35.559 --> 0:09:39.880 that unfold in the world's narrative. These expansions would mean 0:09:39.960 --> 0:09:43.920 that two different players could have wildly different experiences within 0:09:44.000 --> 0:09:46.880 the game, Like if one person had purchased and installed 0:09:46.880 --> 0:09:49.920 an expansion and the other one hadn't, there's going to 0:09:49.960 --> 0:09:54.160 be a gap in those experiences. But typically these gaps 0:09:54.200 --> 0:09:57.800 would only kick in at higher character levels in the 0:09:57.840 --> 0:10:01.320 game that you couldn't even access these new areas until 0:10:01.320 --> 0:10:04.360 you had reached a certain level, So until that point 0:10:04.440 --> 0:10:06.600 there wouldn't be a whole lot of difference between the 0:10:06.600 --> 0:10:09.760 two experiences. However, beyond that, the person who had the 0:10:09.800 --> 0:10:12.480 expansion would be able to experience areas and content that 0:10:12.520 --> 0:10:15.079 the other one would not have access to and could 0:10:15.080 --> 0:10:19.640 not get to. The expansions themselves would cost extra to purchase, 0:10:19.800 --> 0:10:23.880 so you would have to buy the expansion, and then 0:10:24.080 --> 0:10:27.600 at that point you just had the normal subscription fee 0:10:28.000 --> 0:10:31.839 kick in after whatever grace period there might be unless 0:10:32.200 --> 0:10:36.240 whatever game you're playing switched to a free to play mode, 0:10:36.440 --> 0:10:40.160 and typically that means that players can access some of 0:10:40.200 --> 0:10:43.360 the game for free, but then eventually they hit a 0:10:43.480 --> 0:10:46.960 content paywall that will require a subscription in order for 0:10:47.000 --> 0:10:50.040 them to access it. I've played a few games where 0:10:50.080 --> 0:10:52.600 it did this, where you could walk around and then 0:10:52.640 --> 0:10:55.920 you might find like a gateway, but the gateway itself 0:10:55.920 --> 0:10:58.800 would be inactive to you because you would have to 0:10:58.800 --> 0:11:01.320 pay a subscription before or you would be allowed to 0:11:01.400 --> 0:11:04.600 access it. World of Warcraft actually made this transition to 0:11:04.679 --> 0:11:07.640 free to play back in last year in twenty twenty 0:11:07.679 --> 0:11:10.480 three and allowed players to create characters and level them 0:11:10.559 --> 0:11:13.240 up to level twenty before they hit a paywall, and 0:11:13.320 --> 0:11:16.120 at that point it's time to part with fifteen dollars 0:11:16.160 --> 0:11:18.800 per month. Or you can opt to pay for several 0:11:18.840 --> 0:11:22.720 months in advance, which reduces the cost per month that way. 0:11:23.080 --> 0:11:25.760 Or you can use something they call game time, where 0:11:25.800 --> 0:11:28.760 you could just pay for sixty days of access and 0:11:28.800 --> 0:11:32.880 it doesn't become a recurring subscription. So maybe you've been 0:11:32.920 --> 0:11:35.640 playing for a while and you dropped off, So then 0:11:35.679 --> 0:11:38.680 you pay, you know, for game time, you get sixty 0:11:38.760 --> 0:11:41.760 days access, you play for two months to try and 0:11:41.840 --> 0:11:44.880 access of some of the content that you hadn't seen already, 0:11:45.080 --> 0:11:47.240 and then once that time is over, you could just 0:11:47.320 --> 0:11:50.000 choose to walk away or you know, subscriber, whatever you 0:11:50.040 --> 0:11:52.560 want to do. In more recent years, we've seen the 0:11:52.559 --> 0:11:56.360 industry at large put more emphasis on these ongoing revenue 0:11:56.360 --> 0:11:59.679 generation models. A Grand Theft Auto of five, which sold 0:11:59.720 --> 0:12:05.160 a mind boggling one hundred ninety five million units since 0:12:05.200 --> 0:12:07.839 it came out way back in twenty thirteen according to 0:12:07.880 --> 0:12:12.040 Statistic Anyway, that's a great example, according to game Ramp. 0:12:12.480 --> 0:12:18.160 According to game Rant, GTA five had a budget of 0:12:18.240 --> 0:12:26.240 two hundred sixty five million dollars for development. That is insane. 0:12:26.640 --> 0:12:29.920 In fact, according to the numbers, it was even bigger 0:12:29.960 --> 0:12:34.600 than the largest budgeted film for twenty thirteen. That film 0:12:34.760 --> 0:12:38.320 was The Loan Ranger, which bombed, but The Loan Ranger's 0:12:38.760 --> 0:12:41.439 budget was estimated to be around two hundred and twenty 0:12:41.480 --> 0:12:45.840 five million dollars. So GTA five cost forty million dollars 0:12:46.120 --> 0:12:50.760 more in budget than the largest budgeted film of twenty thirteen. 0:12:51.360 --> 0:12:55.040 That is an incredible number to think about, and then 0:12:55.120 --> 0:12:59.319 you think, well, making that money back, making a profit, 0:12:59.840 --> 0:13:05.520 that's really challenging. However, for Rockstar, that investment is paid 0:13:05.559 --> 0:13:08.760 off because GTA five has made around eight and a 0:13:08.800 --> 0:13:12.960 half billion dollars billion with a B since it was 0:13:13.040 --> 0:13:15.800 released in twenty thirteen. And again, that number is just 0:13:15.840 --> 0:13:19.280 it's so huge as to be unimaginable to me. And 0:13:19.320 --> 0:13:22.080 a large part of that revenue is thanks to the 0:13:22.120 --> 0:13:27.880 online component, fittingly called GTA Online. It wasn't ready when 0:13:27.920 --> 0:13:32.079 the game initially launched, but GTA Online would become an 0:13:32.280 --> 0:13:36.360 enormous powerhouse for Rockstar in time. Now, the access to 0:13:36.400 --> 0:13:39.520 the online component is free, or at least it's free 0:13:39.559 --> 0:13:42.760 on top of whatever fee a gamer might be paying 0:13:42.880 --> 0:13:46.400 in order to access online services through their respective platforms, 0:13:46.480 --> 0:13:49.800 because both Xbox and PlayStation have done that right where 0:13:49.840 --> 0:13:52.040 you have to pay a certain amount in order to 0:13:52.080 --> 0:13:56.000 be able to tap into the online capabilities of those consoles. 0:13:56.520 --> 0:13:59.959 There are options to spend real world money in GA 0:14:00.360 --> 0:14:04.360 Online to unlock in game content. You can choose to 0:14:04.440 --> 0:14:07.000 just play it for free. You don't have to spend money. 0:14:07.160 --> 0:14:10.000 You can opt to earn stuff in the game, but 0:14:10.040 --> 0:14:13.840 it's going to be at a rate that is really slow, 0:14:14.679 --> 0:14:17.040 slow enough that you might find yourself tempted to spend 0:14:17.120 --> 0:14:19.520 some real world cash to speed things up a bit, 0:14:19.840 --> 0:14:23.720 purchasing a so called Shark card with real world money 0:14:23.760 --> 0:14:28.040 in Jet's virtual cash into your GTA online character's bank account, 0:14:28.480 --> 0:14:32.400 or as Rockstar has put it, quote cash is king 0:14:32.640 --> 0:14:36.080 in this town. Solve your money problem and help get 0:14:36.080 --> 0:14:39.520 what you want across Los Sentos and Blaine County with 0:14:39.600 --> 0:14:43.080 the occasional purchase of cash packs for Grand Theft Auto 0:14:43.240 --> 0:14:46.400 Online end quote. But just to cover their butts and 0:14:46.440 --> 0:14:49.400 to emphasize that maybe you should practice a little restraint, 0:14:49.520 --> 0:14:54.040 the company also adds, quote spend wisely. Cash therapy is 0:14:54.160 --> 0:14:57.320 fleeting in the quote, and I guess say I'm impressed 0:14:57.320 --> 0:15:00.000 with help blatant. Rockstar is on the whole spend money, 0:15:00.080 --> 0:15:02.320 need to make our game more fun for you messaging. 0:15:02.760 --> 0:15:06.920 In fact, we'll touch on that more in just a moment, 0:15:07.000 --> 0:15:19.800 but first let's take a quick break to thank our sponsors. Okay, 0:15:19.840 --> 0:15:23.760 before the break, we were talking about GTA Online and 0:15:24.600 --> 0:15:30.160 the incentive that Rockstar has created to convince players to 0:15:30.200 --> 0:15:36.680 spend real world cash on in game currency. That virtual 0:15:36.720 --> 0:15:38.600 cash in the game is what gets you access to 0:15:38.640 --> 0:15:41.720 some of the fanciest toys that are available. That might 0:15:41.800 --> 0:15:44.400 be a suite headquarters where you can hang out with 0:15:44.480 --> 0:15:47.920 your buddies. It might be brand new vehicles that you 0:15:47.960 --> 0:15:50.120 can tool around in. It could be all sorts of 0:15:50.120 --> 0:15:53.720 different stuff. And you can even purchase a version of 0:15:53.760 --> 0:15:57.680 GTA Online that's separate from the GTA five game if 0:15:57.720 --> 0:16:00.000 all you want to do is just play the online component, 0:16:00.280 --> 0:16:03.640 and that'll save you like twenty bucks in upfront costs 0:16:03.680 --> 0:16:07.040 at that point. Now, rock Stars being a bit cheeky 0:16:07.520 --> 0:16:10.400 in its descriptions of this, but I feel the company's 0:16:10.400 --> 0:16:13.000 messaging is shining a light on one of the real 0:16:13.200 --> 0:16:16.840 challenges of live service games. At least in the minds 0:16:16.880 --> 0:16:20.960 of some gamers, and that's making sure that players don't 0:16:21.000 --> 0:16:23.720 walk away with the feeling that they have to keep 0:16:23.760 --> 0:16:27.040 paying in order to make a game be fun. Like 0:16:27.080 --> 0:16:30.600 that's a terrible realization to come to. Right You're playing 0:16:30.680 --> 0:16:33.600 a game and you're like, well, this isn't fun. I'm 0:16:33.600 --> 0:16:36.720 not enjoying this, and then you realize, oh, the fun 0:16:36.880 --> 0:16:40.040 stuff has been locked behind a paywall, so I have 0:16:40.160 --> 0:16:44.200 to pay money if I want to actually enjoy this experience. 0:16:44.360 --> 0:16:47.600 There is a very delicate line between providing new experiences 0:16:47.640 --> 0:16:50.520 and content for players that they feel is worth paying 0:16:50.560 --> 0:16:53.080 for and holding back on the best stuff of the 0:16:53.120 --> 0:16:56.360 game unless the players cough of the dough. If players 0:16:56.400 --> 0:16:59.240 start to feel that they're being milked of cash just 0:16:59.280 --> 0:17:02.480 because they want to have fun playing a game, they 0:17:02.520 --> 0:17:05.440 get resentful for really good reason. I mean, games are 0:17:05.440 --> 0:17:08.840 supposed to be entertaining. That's why they exist. So if 0:17:08.880 --> 0:17:11.600 you get a feeling that a game is not entertaining 0:17:11.720 --> 0:17:14.719 unless you keep paying money to the developer, that just 0:17:14.720 --> 0:17:17.920 feels like you're being exploited and taken advantage of. That's 0:17:17.960 --> 0:17:21.760 not fun. Rockstar has continued to develop lots of content 0:17:22.080 --> 0:17:26.879 for GTA online, which means that it's also important for 0:17:26.920 --> 0:17:30.000 them to continue to generate a stream of revenue because 0:17:30.040 --> 0:17:33.800 without the revenue, there's no incentive for Rockstar to spend 0:17:34.160 --> 0:17:37.639 assets to build stuff for the game. You would just 0:17:37.720 --> 0:17:40.080 have a static world and it would only exist for 0:17:40.119 --> 0:17:42.480 as long as Rockstar was willing to pay for the 0:17:42.600 --> 0:17:45.600 maintenance of servers. Right, So you have to have that 0:17:45.760 --> 0:17:50.359 ongoing revenue stream. And we don't yet have GTA six 0:17:50.400 --> 0:17:53.680 available to us. It is in development and we've seen 0:17:53.760 --> 0:17:57.119 some like first looks and stuff, but the general expectation 0:17:57.280 --> 0:17:59.960 is that we're going to see such a similar approach 0:18:00.080 --> 0:18:04.760 GTA six that embraces long tail revenue streams. Hopefully they'll 0:18:04.760 --> 0:18:08.280 be incorporated in a way that doesn't feel like rock 0:18:08.359 --> 0:18:11.800 Star is trying to exploit its fan base. But without 0:18:12.320 --> 0:18:15.960 that long tail, there's no reason to spend the ginormous 0:18:16.040 --> 0:18:18.280 amounts of money needed to build out a game with 0:18:18.400 --> 0:18:21.480 the scope of GTA. There's no reason to spend two 0:18:21.600 --> 0:18:25.840 hundred and sixty million dollars making a game because you'd 0:18:25.880 --> 0:18:28.080 never make that back. So you can argue that if 0:18:28.080 --> 0:18:32.320 players reject the GTA online model, game studios would have 0:18:32.359 --> 0:18:34.879 no option but to scale way back on games and 0:18:34.920 --> 0:18:38.199 cut budgets drastically in order for the business model to 0:18:38.200 --> 0:18:41.560 make sense. Would that be a bad thing, Not necessarily, 0:18:42.080 --> 0:18:44.680 but it would mean that the games we would get 0:18:44.760 --> 0:18:48.560 would be less ambitious in scope, right, We wouldn't have 0:18:48.640 --> 0:18:53.560 these enormous open world games with incredible depth and detail 0:18:53.640 --> 0:18:55.960 to them. I think of things like games out of 0:18:55.960 --> 0:19:01.000 Bethesda where you're looking at Fallout or Elders Roles. These 0:19:01.000 --> 0:19:05.719 are huge, epic worlds. Whether you enjoy them or not 0:19:05.880 --> 0:19:09.960 is up to your subjective tastes, but it's undeniable that 0:19:10.040 --> 0:19:12.080 there's a huge amount of work that goes into them, 0:19:12.480 --> 0:19:16.880 and those things aren't possible if you can't find these 0:19:16.920 --> 0:19:20.639 ways to generate long tail revenue for the most part, 0:19:20.840 --> 0:19:24.960 because who's gonna be able to keep that and make 0:19:25.000 --> 0:19:28.600 it sustainable. On the flip side, some people would argue, well, 0:19:28.680 --> 0:19:32.760 games have gotten so large in scope that it's overwhelming 0:19:32.920 --> 0:19:36.800 and stops being fun, And that's a different conversation. Again, 0:19:36.880 --> 0:19:40.119 I think it comes down to personal preference. But maybe 0:19:40.160 --> 0:19:41.919 then you'd say, well, I think it might be a 0:19:41.920 --> 0:19:44.800 good thing for the video game industry to kind of 0:19:45.080 --> 0:19:47.880 check itself a bit and take a step back and 0:19:48.200 --> 0:19:55.200 perhaps not tackle these ever growing projects that get increasingly 0:19:55.359 --> 0:19:58.320 more complicated and expensive. That's the real rub of it. 0:19:58.600 --> 0:20:01.440 Even for teams that just want to build a single 0:20:01.560 --> 0:20:05.320 player experience, to do that on a triple A scale 0:20:05.400 --> 0:20:08.399 requires a level of investment. It's just plain hard to 0:20:08.480 --> 0:20:12.160 profit from if it's just a single purchase model. If 0:20:12.200 --> 0:20:16.560 all you're doing is making an incredibly rich, detailed, enormous 0:20:16.600 --> 0:20:20.080 first single player game and then releasing it and just 0:20:20.200 --> 0:20:22.560 selling the one copy and that's it, you would need 0:20:22.600 --> 0:20:26.280 to sell so many copies of that game to return 0:20:26.800 --> 0:20:29.960 something to that level of investment that it's a huge risk. 0:20:30.600 --> 0:20:35.520 Ongoing revenue streams, either from subscriptions or micro transactions or whatever, 0:20:35.640 --> 0:20:38.760 are way more attractive. The good developers will build that 0:20:38.840 --> 0:20:41.480 into their plans for a steady stream of new content 0:20:41.720 --> 0:20:44.280 adding value to what hopefully is already a good game. 0:20:44.600 --> 0:20:47.439 Bad developers will hope they can ring as much cash 0:20:47.520 --> 0:20:51.000 out from players as they can before the gig is 0:20:51.119 --> 0:20:54.840 up and you know, everyone calls them out on their BS. 0:20:55.400 --> 0:20:59.119 Many live service games have adopted a seasonal structure for 0:20:59.200 --> 0:21:04.760 their content. Games like Sea of Thieves, Fortnite, Fall Guys Deep, 0:21:04.760 --> 0:21:08.760 brought Galactic Dead by daylight. Tons of games use a 0:21:08.880 --> 0:21:13.080 seasonal model. Some of these games introduce new content during 0:21:13.119 --> 0:21:16.280 a season with the promise that once the season is over, 0:21:16.520 --> 0:21:19.520 players will no longer be able to acquire the stuff 0:21:19.560 --> 0:21:22.479 that had been introduced. And this creates a sense that 0:21:22.560 --> 0:21:25.520 if you allow your subscription to lapse or you don't 0:21:25.560 --> 0:21:28.119 pay up to access this new season, you're going to 0:21:28.160 --> 0:21:30.320 be missing out and you won't ever be able to 0:21:30.320 --> 0:21:33.800 get whatever stuff was introduced at that time. So the 0:21:33.880 --> 0:21:39.040 fomo that fear of missing out is strong with seasonal approaches. Now, 0:21:39.119 --> 0:21:43.200 let's talk about another specific subset of micro transactions and games. 0:21:43.320 --> 0:21:46.000 This is one that has drawn criticism and scrutiny from 0:21:46.040 --> 0:21:49.800 regulators around the world, and that would be lootboxes. Some 0:21:50.000 --> 0:21:54.080 games let players buy in game items directly. Right, maybe 0:21:54.080 --> 0:21:56.520 you have your eye on a particular outfit in a 0:21:56.560 --> 0:21:59.640 game and you think that looks really snazzy. I really 0:21:59.680 --> 0:22:02.879 want to have my character wearing this outfit, and maybe 0:22:02.920 --> 0:22:05.840 the game allows you to actually PLoP down real world 0:22:06.359 --> 0:22:10.159 dollars or whatever currency you are working in so that 0:22:10.240 --> 0:22:13.359 your in game character can look amazing. That's great. You 0:22:13.400 --> 0:22:15.280 know the people who want to do that can do that, 0:22:15.400 --> 0:22:18.000 and everyone else can just move along. But what if 0:22:18.240 --> 0:22:22.560 instead you can only spend money for the chance of 0:22:22.600 --> 0:22:26.040 getting that outfit, and there's no guarantee that that's what 0:22:26.080 --> 0:22:29.880 you're going to get. That's what loot boxes represent. They 0:22:29.920 --> 0:22:33.840 are in game items that represent a random or pseudo 0:22:33.960 --> 0:22:37.520 random bit of content. So players spend real world money 0:22:37.600 --> 0:22:40.600 not on a specific thing, but on the equivalent of 0:22:40.640 --> 0:22:43.320 a pull on a slot machine. So if the player 0:22:43.400 --> 0:22:46.879 is incredibly lucky, the loot box will reveal that they've 0:22:46.880 --> 0:22:50.320 been awarded the very thing that the player wanted, but 0:22:50.359 --> 0:22:53.159 the odds are not very good. You could argue this 0:22:53.200 --> 0:22:57.399 whole model is heavily inspired by gambling, particularly on stuff 0:22:57.440 --> 0:23:00.480 like slot machines. So why do folks play slot machines. 0:23:00.840 --> 0:23:04.320 They play because the machines represent the possibility of a payout, 0:23:04.480 --> 0:23:06.920 and a lot of machines are designed so that they 0:23:06.960 --> 0:23:12.040 display near misses right like, it's not just a clear miss, 0:23:12.119 --> 0:23:15.000 though that can be shown too, but you're so close 0:23:15.080 --> 0:23:17.640 it almost lined up, and if it had lined up, 0:23:17.920 --> 0:23:21.199 you would have gotten a big payout. That creates this 0:23:21.400 --> 0:23:25.000 feeling that you almost succeeded and that you just need 0:23:25.040 --> 0:23:27.000 to stick with it a little bit longer. And then 0:23:27.000 --> 0:23:29.879 you're going to be rolling in the dough. It's all 0:23:29.920 --> 0:23:33.320 in an effort to encourage more gambling. Despite the token 0:23:33.359 --> 0:23:36.480 warnings and some casinos about the dangers of gambling addiction, 0:23:37.080 --> 0:23:41.880 loot boxes arguably do something very similar. They tempt players 0:23:41.920 --> 0:23:46.080 with the prospect of awarding rare in game items, whether 0:23:46.200 --> 0:23:49.439 those items are purely cosmetic or maybe they have some 0:23:49.760 --> 0:23:53.520 in game effect, and that has gotten companies into trouble. 0:23:53.720 --> 0:23:56.679 Various lawsuits around the world have been built around an 0:23:56.760 --> 0:24:00.280 argument that loot boxes are, at their heart, a kind 0:24:00.280 --> 0:24:03.840