There is no greater motivation in this world quite like the promise of having a thicker wallet. Entertainment has arguably been at the forefront of this sentiment. Whether someone is a pop diva or an NFL running back, they all belong to something called the entertainment industry. The keyword there is “industry”. Although comparatively young in regards to sports and music, the video game industry has become wildly successful over the past decade. What started off as being nothing more than a specialized hobby has grown into a massive mainstream form of media. With triple-A video game releases even beating out Hollywood in terms of revenue there is clearly something they are doing right (Chatfield, 1). Despite all of these impressive sales figures, inevitably greed will come into play. What remains important though is that an industry learns from its errors. From creative business models to practically stealing from customers, the video game industry has strengthened modern business ethics even through their mistakes.
Perhaps it would be best to start off with the good. It is common knowledge by now that expanding your acquisitions in the form of small companies helps bring a new set of skills to your service, but it also gives those same small businesses a chance to grow. Steam supports working with a number of smaller developers in addition to the big ones. While the console wars rage on between Sony’s Playstation, Microsoft’s Xbox and Nintendo’s Wii U pitting their communities against each other, Steam remains practically unchallenged in the PC gaming market share. While Steam does rely on some exclusives such as Counterstrike and Dota 2 which boast hundreds of thousands of players daily, much of its success can be attributed to the large library of games that were made possible by its continued support of those struggling to break into the gaming industry by “greenlighting” (a form of approval) their products (“Steam” n.d.). Playstation, and more specifically, Xbox try to stay in the game by providing a number of other services such as Netflix and blue ray players in their machines to make up for the fact that neither are as outgoing in giving smaller developers a chance. The Wii U trails far behind all three platforms due to its lack of almost any third party developer support (Vargas, 2013). Not only does Steam essentially promote smaller businesses, it has proven to be profitable as well. Consoles may not necessarily be dead but PC elitism has grown over the past few years due to the number of titles, specifically indie games, Steam has accumulated over the years. Their inclusiveness may understandably win this war of platforms as they continue to take chances forging alliances with dozens of other developers in order to cater to the many different kinds of gamers.
“Steam.” Steam, n.d.http://store.steampowered.com/.
Speaking of PC gaming, World of Warcraft, although fallen in numbers, still remains the biggest MMORPG of all time. It once was able to claim a whopping 12 million players. How is all of this possible? It relied on subscriptions. Most video games at the time of its release were single products that had a one-time purchase and less reason to revisit the game once you were done. World of Warcraft’s formula offered more than just a product. It was also a service. Constant patches and add-ons convinced players that they were living in an ever-changing and ever-growing online world. This gave incentive to keep playing even for veterans. In a sense, the game never abandons the player and constantly tries to reward player loyalty. Off course server maintenance and constant reworks would cost money, but they made all of it back through the sheer amount of support from the community. Blizzard had successfully created an IP (intellectual property) that would last more than a decade and still go strong (“World of Warcraft” n.d.). With just one product, Blizzard capitalized on the idea of customer loyalty by both brining in new players and accommodating the old ones.
Trying to capitalize on Blizzard’s success, a number of other companies tried their stab at a big MMO release. Bioware’s The Old Republic appeared promising at first, but does not appear to have the longevity that World of Warcraft does. However, it still is far from being a failure by including an in-game store (“The Old Republic” n.d.). People are quick to nay-say micro-transactions, but it is all about the manner in which they are implemented. The reason why micro-transactions and in-game stores are criticized is because of their encouragement of a pay-to-win model. This essentially means that people are forced to pay to pass levels and not give the time or effort required to progress in the game. The Old Republic relies more on selling in-game items that offer no real gameplay rewards, but you can give your character a cool looking hat. There’s really nothing advantageous about a hat as it only serves cosmetic purposes. Small purchases like this keep the business afloat but does not go as shallow as to make players pay in order to proceed to the next level.
“The Old Republic.” The Old Republic, n.d.http://www.starwarstheoldrepublic.com/.
Wildstar, a new MMO on the scene, makes money from an even more far-fetched angle. Knowing that entering the MMO market is difficult, they came up with a formula that encourages its current subscribers to keep playing. They believe that there are essentially two different kinds of people that play their games. Person A is fine with paying subscriptions but does not have enough time to play in order to progress in the game. Person B has plenty of time but cannot keep playing because he/she is unable to keep up with the subscription fees. Wildstar allows person A and B to alleviate their problems. Person A can give some of the time purchased through his subscription to pay for some of person B’s hard-earned in-game currency/items. This is basically a trade between money and time. Person A gets the in-game items he/she needs to progress without having to dedicate their life to the game while person B gets the time needed to play longer (“Wildstar” n.d.). This understanding of the mindsets of different customers helps create better connections between the company and the consumer. Interestingly enough, this is not the first time a video game company has let players trade directly between each other.
Eve Online has more than just a simple trade system. It has an entire living economy in its virtual space that players control and utilize with real money. The market inside this virtual reality is so complex that it has actual inflation and deflation rates for the in-game items being traded. Players themselves set prices and can make auctions at their own will. Very little is monitored in this in-game economy except for any “illegal” trades. Plumer, a game journalist, describes the game as being its own “small country” even going into further detail about how players “speculate on commodities” while forming “trade coalitions and banks”. The amount of user power in this game is remarkable. There is virtually no middleman which gives a sense of trust between the developers and the players. At no point does the game developer itself step in to moderate trades. Instead of trying to control everything they give power to the people, and through this ideology they have secured the loyalty of their players ensuring that their IP will stay relevant in years to come.
Brad, Plumer. “The Economics of Video Games.” The Washington Post, September 28, 2012.http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/28/the-economics-of-video-games/
Unfortunately not all video games are sunshine and rainbows in the way they handle their businesses. Let’s take a look at the most casual of games. Just about everyone with a smartphone has played or at least heard of a little something called Candy Crush saga. The entire game is just swiping candy in four directions trying to match colors. For anyone who has had a phone before the iphone era, this concept sounds a lot like bejeweled doesn’t it? The premise of the game has been around longer than most people believe coming in various different forms ranging from a Facebook equivalent to classic NES games. What makes this game a cash cow compared to the rest is the way they make money off of their game. Players cannot go 1 minute without a shameless plead for more of the user’s money. Smosh Honest Game Trailers puts it best saying that players “are given options like paying to unlock new levels, paying for power-ups, paying to make more moves, paying for more lives and paying for the ability to pay for more lives”. In response, King Digital is now more concerned with developing new mobile game apps rather than simply milking their already successful game. Their current product lineup is remarkably similar to Candy Crush Saga, but at the very least they are making money from new content rather than from relying on the old model. It may be improvement in small increments, but it is improvement nonetheless.
“Why Candy Crush Saga Is Taking over the World,” n.d.https://medium.com/mobile-games/why-candy-crush-saga-is-taking-over-the-world-f89203a90c13.
Corporate video game crimes do not end there. DLC, also known as downloadable content, has been greatly panned by fans and critics alike. These digital expansions have been accused of allowing the developers to market games with missing content to consumers and selling that same missing content as an “add-on”. I have to admit that this is a generalization and that some DLC expansions have earned the right to actually call themselves an expansion. The most blatant example of DLC abuse was with a game called Street Fight vs Tekken. This particular game actually came with the content on the disc but could only be accessed through a purchasable code (Gallaway, 2012). Understandably, outrage spread through the community prompting the developer to review their DLC practices in the future. Since then the company has released Ultra Street Fighter IV which expands the roster of characters for Street Fighter IV. People who did not have the original title can purchase the new one and those who had the first can upgrade their version at a reasonable price. Although they could have gotten away with refusing to put up an upgrade option forcing everyone to buy a new copy, they decided against it. This reflects a willingness to change business practice even at the cost of making a quick buck.
If selling a purchasable code was bad, selling an unfinished game to your customers is downright inexcusable. Steam, along with other publishers, have allowed players to partake in early beta tests to judge games that are still in development. The catch is that some beta tests actually require players to pay a fee (Orland, 2013). Gamers are not doing themselves a favor by paying to criticize unfinished games. Of course it is unreasonable to ask game companies to give early access to their projects for everyone before the final product is released. By then, players might lose interest and the company would go broke. Still, they need player feedback in order to improve before their big debut. More and more beta tests are beginning to tackle the problem in a different fashion. League of Legends and a number of other games in the same genre went through extensive periods of beta testing before being officially released. In order to keep the game from being at full access to the public, most beta tests now require sign-ups through their websites to limit the participants (“League of Legends” n.d.). This may sound exclusive but at least they do not cheat anyone out of their money. This flexibility in business practice demonstrates how experimentation can become a win-win for both consumers and producers.
Sadly, even one of the most popular series, Halo, cannot escape the lure of becominga corporate sellout. The embarrassing alliance Halo 4 made would forever be the laughing stock of gamers everywhere. Halo 4 was at the forefront of the Doritos and Mountain Dew campaign at the time of its release. By buying Doritos and Mountain Dew, gamers could level up faster with double XP. Even high profile game journalist Geoff Keighley was nothing more than a mere puppet promoting Doritos and Mountain Dew through Halo 4’s popularity (Vargas, 2012). Capitalizing on an IP’s popularity is not an unjust decision. Understandably partnerships need to be made in order to cover for the high production costs of triple-A titles. That is not the issue. The main problem gamers had were with the double XP. Having another company’s product directly affecting the game and its online community was a terrible decision made by Halo’s creators. No longer was Mountain Dew and Doritos promoting Halo. Halo was promoting them. Since then, 343, the company behind the Halo series, has ended its partnership with the snack and soda to work on their next projects. Both Halo 5 and The Master Chief Collection have only had promotion through gaming conventions and online trailers. Gamers made complaints. The company listened.
Phil, Owen. “No, Game Journalists Are Not Paid by Publishers for Review Scores,” July 28, 2013.http://www.gamefront.com/are-paid-by-game-publishers-for-review-scores-nope/.
More pressing than the Doritos incident is gaming journalism itself. Corruption always finds a way to snare its tendrils into the innocent. There has been great speculation about whether publishers have any power over those that review their games. GMU, a video game awards ceremony came under fire in 2012 when it was revealed that the journalists invited to the ceremony were voted for and sponsored by video game publishers. Journalists were encouraged to tweet positive statements about certain games. In return, they would get a free PS3. Joe Vargas, a youtuber specializing in video game reviews, describes the process as “favors for positive coverage”. Promotion through shady deals have become an increasing problem in the video game industry. Perhaps the high-end professional reviewers have fallen from grace, but this bad press has helped pave way to the legitimacy of bloggers and youtubers willing to weigh in their own opinions on games. Youtube recently went on a spree taking down a number of video game related videos. Although people were quick to point fingers at the developers and publishers it was actually revealed to be the result of third party music companies making claims to music used in the intros of a number of videos. Gaming developers and publishers were actually quick to defend youtubers and amateur reviewers (“YouTube’s Response To Content ID Copyright Controversy,” n.d). Despite a need for better reviews to boost sales, game companies defended the rights of free speech even for those who had spoken negatively about their products. Seeing an opportunity to win back the public’s trust the gaming industry’s bold move has amended some of the disputes with gamers.
It may be wrong to praise all of the business practices of the video game industry over the past years, but the events that have transpired have nonetheless become important lessons in business ethics as a whole. Each success and each folly have become a stepping stone further shaping what it means to be a good business. There is no shame in an industry making poor decisions as long as it is motivated in improving itself. The tales of the video game industry will undoubtedly transform the corporate world into something that both consumers and businessmen can rally behind.
Works Cited
Brad, Gallaway. “The Consumer’s Seven Laws of DLC,” April 8, 2010.http://www.gamecritics.com/brad-gallaway/the-consumers-seven-laws-of-dlc.
Brad, Plumer. “The Economics of Video Games.” The Washington Post, September 28, 2012.http://www.washingtonpost.com/blogs/wonkblog/wp/2012/09/28/the-economics-of-video-games/.
“Business Model.” Wildstar, n.d.http://www.wildstar-online.com/en/game/features/business-model/.
Candy Crush Saga (Honest Game Trailers), 2014.https://www.youtube.com/results?search_query=candy+crush+criticism.
Kyle, Orland. “Valve Lets You Pay for the Beta with Steam ‘Early Access’ Program,” March 20, 2013.http://arstechnica.com/gaming/2013/03/valve-lets-you-pay-for-the-beta-with-steam-early-access-program/.
“League of Legends.” League of Legends, n.d.http://na.leagueoflegends.com/.
Phil, Owen. “No, Game Journalists Are Not Paid by Publishers for Review Scores,” July 28, 2013.http://www.gamefront.com/are-paid-by-game-publishers-for-review-scores-nope/.
“Steam.” Steam, n.d.http://store.steampowered.com/.
“The Old Republic.” The Old Republic, n.d.http://www.starwarstheoldrepublic.com/.
Tom, Chatfield. “Videogames Now Outperform Hollywood Movies.” The Guardian, September 26, 2009.http://www.theguardian.com/technology/gamesblog/2009/sep/27/videogames-hollywood.
Vargas, Joe. Top 10 Gaming Controversies of 2012!, 2013.https://www.youtube.com/watch?v=54s_jyjMUxY.
Vargas, Joe. “Top 10 Gaming Controversies of 2013!,” n.d.https://www.youtube.com/watch?v=voVpvKlntDM.
“Why Candy Crush Saga Is Taking over the World,” n.d.https://medium.com/mobile-games/why-candy-crush-saga-is-taking-over-the-world-f89203a90c13.
“World of Warcraft.” World of Warcraft, n.d.http://us.battle.net/wow/en/.
“YouTube’s Response To Content ID Copyright Controversy,” n.d.http://gamerant.com/youtube-content-id-copyright-controversy-response/.