Analyst: Video Game Companies Might Be Cutting Down On Microtransactions in 2018
This year the companies could cut a little with the microtransactions, according to the forecasts of the analyst Doug Creutz, of the financial company Cowen. The analyst believes that after the controversies of 2017 around microtransactions and the loot boxes, the video game companies will bet on a somewhat lower profile in this business strategy.
“Game development times are getting longer, and R&D costs are growing faster than they had previously. This isn’t a monopoly business…Angering your customer with bad MTX (Microtransactions) does matter,” explains Creutz who spoke recently with CNBC.
Creutz takes Star Wars Battlefront II as an example, saying “it had pretty clearly significantly underperformed expectations and remains without a live services revenue stream, while Destiny 2 has at the least suffered some unwanted engagement attrition. ”
Taking this into consideration, the analyst notes that “we suspect that 2018 will see a pullback on industry attempts aggressively drive MTX growth as a result.” Therefore, he expects companies to bet more for season passes to the detriment of the loot boxes.
“It’s not just that gamers are angry and complaining. There have clearly been performance consequences for the games involved. And in an industry where every company is dependent upon a relatively small number of franchises, this matters,” Creutz concluded.