This and other posts can be found at the blog Motivate. Play.
As I walked around GDC last month I was hard not to feel the power of the FTP/Microtransaction business model. Yes, companies like Intel, Sony, Crytek, and Ubisoft dominated the expo floor, but companies like Zynga and Playdom pushing behavioral metrics like ARPU, DAU, engagement, and retention seemed to dominate the discussion. Theories from behavioral economics and psychology along with multivariate testing are being applied and flouted as means to improve metrics, and design – to some extent – seems to be driven by metrics.
From these metrics and methods a dichotomy of industry professionals seems to have emerged. On one side are individuals who embrace the model of micro-transactions and metrics as a way to increase revenue and be successful. On the other are those who are concerned that these methods will lead them to making slightly more complicated slot machines. These are the professionals concerned with ethics and the suppression of creativity. For my last talk of GDC I attended a round-table discussion on monetization in games based around microtransactions. Two of the points discussed “What are you most paranoid about with this business model.” and “Where is the social games industry headed?” lead to animated and impassioned discussion about the ethics and creativity of game design.
As I explored this question more in my own mind I decided that the problem boils down to two questions. If the answer to question 1 is affirmative, then question 2 doesn't matter. However, if the answer to question 1 is “no” and the answer to question 2 is affirmative then the game industry may have a looming problem on its hands.
Question 1: Will players eventually vote with their feet (or mice) and leave games that are simply treating them as a unit of monetization?
What motivates and engages players to buy and play? In the past Ted Castronova and Byron Reeves have talked about the market for attention. Attention is a scarce resource and media companies that can command and monetize attention will be the most successful. To what degree can following theory of behavioral economics and psychology enlightened by behavioral statistics lead to games that players desire? Is there an optimal player experience, and is it similar to that of a casino? Or as the audience of social games grows up, will they demand games that are more fun, and engage them in ways that are creative, and thoughtful? If players vote with their feet for creative and thoughtful games then those ethical game designers need not worry. However, if the outcome is that some or all players don't then game designers must address the next question.
Question 2: Is the social game industry suffering form a modified tragedy of the commons?
In the tragedy of the commons there exists a rivalrous (limited) good and exclusion from the use of this good is difficult. Player attention fits both of these criteria. The tragedy of the commons occurs because it is in the best interest of those using the good to maximize their use of it. A classic example of this is a forestry or pasture, but let me draw from a slightly more interesting and pertinent example that was actually developed by Ted Castronova about fourteen years ago. It is the tragedy of the commons applied to doping in sports.
The problem is fairly straightforward. If I am a player and my desire is to win in sport (on a fairly level playing field) then it is in my best interest to dope or cheat – as this maximizes my chance of winning.
However, if everyone dopes then my chances of winning are actually no better than before and I still suffer the long term problems associated with doping. The optimal solution for the group then is to enforce regulations and sanctions that are stronger than the incentive to dope. This way there is still a level playing field (we can all coordinate on not-doping) because doping is too costly, and no one suffers the problems of the suboptimal outcome.
So ask this question: Is the game industry in the same position as the athletes who are doping? If question 1 is true and the majority of developers believe that industry is in a suboptimal outcome with metric driven games then, yes the game industry is in a tragedy of the commons situation. In this case it would be better for developers to not use behavioral economic and psychological games supplemented by metrics to get more attention. However, the suboptimal outcome is actually the Nash Equilibrium. Game developers are profit seeking entities and therefore they will use the most successful means to generate profit.
So, if question 1 turns out to be true and game developers also believe that metric driven games are a suboptimal outcome they need to come up with some mechanisms for regulation of the industry. If they don't and players don't vote with their feet then they will end up in a tragedy of the commons making metric driven games to succeed. One of the things they are paranoid about will come true.
For now lets just hope that the truly creative games can compete for player attention. So that a tragedy of the commons is not a problem that the game industry must address