Tech

Why The $183 Billion Video Game Industry Can’t Quit Microtransactions

Published

1 month ago

March 29, 2024

CNBC

The video game industry cannot quit microtransactions.

In fact, two of the largest video game companies in the United States — Electronic Arts and Take-Two Interactive — now make the overwhelming majority of their money from live-service games, subscriptions and in-game purchases, according to their recent earnings reports.

Microtransactions are purchases that users make inside a game using real money. They show up as subscriptions, virtual currencies, and character customization options, among other examples.

Popular live-service titles such as Fortnite, Call of Duty: Warzone, and Clash Royale were built around this revenue model. Game publishers must provide updates throughout certain game life cycles to retain player attention, which is where the term “live service” comes from. Gamers pay for those updates through season passes or subscriptions.Gamer backlash from the early attempts at in-game purchases caused the video game industry to shift its approach to these subscriptions and bundling purchasable content.

“The industry is really moved to more of a what they call a battle pass system, or some kind of packaging of seasonal content,” said Mat Piscatella, executive director of video games at Circana. “Those systems have found much warmer response because I think people are finding that they’re getting more value, and more reliable value for their money.”

In-game spending has become a high-stakes issue in addition to a lucrative business. Electronic Arts’ live-services operations made the company $5.6 billion in its most recent quarter, according to the company’s latest earnings report. Epic Games, which created the popular Fortnite franchise, took Apple to court over an in-game payment system that the developer released inside Fortnite in order to bypass Apple’s App Store fees. In Europe, app stores and so-called loot boxes are a major focus of tech regulators.

Watch the video above to learn more about microtransactions, the backlash involved, and where the industry goes from here.

Chapters:
0:00 — Intro
1:23 — The rise of microtransactions
4:00 — Gamer backlash
6:07 — Regulation
8:08 — What’s next?

Produced, Scripted and Edited by: Christian Nunley
Animation: Christina Locopo, Jason Reginato
Camera, Jeniece Pettitt and Andrew Evers
Supervising Producer: Jeff Morganteen
Additional Footage: Getty Images

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Why The $183 Billion Video Game Industry Can’t Quit Microtransactions

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How Working For Google, Amazon, And Microsoft Lost ‘Dream Job’ Status

Published

2 days ago

April 27, 2024

CNBC

Despite blockbuster earnings from giants such as Alphabet and Microsoft, layoffs continue to ripple through the tech industry.

Layoffs.fyi, a platform monitoring job cuts in the tech sector, recorded more 263,000 job losses in 2023 alone. As of April 2024, there have been more than 75,000 job losses in the industry so far.

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Watch the video to learn about tech workers’ sentiments, considerations for aspiring Big Tech employees, and more.

Chapters:
0:00-03:11 Cold Open
03:11-05:11 Chapter 1: The golden age of tech jobs
05:11-07:22 Chapter 2: Start of tech layoffs
07:22-10:21 Chapter 3: Is tech’s shiny image eroding?
10:21-12:00 Chapter 4: What’s next?

Produced by: Anuz Thapa
Edited by: Kevin Heinz
Narration by: Jordan Smith
Graphics by: Christina Locopo, Jason Reginato
Supervising Producer: Jeff Morganteen
Additional Footage: Getty Images

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