As 2017 came to a close, the one topic on many game developers' minds was the state of loot boxes and microtransactions in the game industry.
But while some forms of in-game monetization can be painful, many developers aren't able to finance their games without some kind of live revenue generator -- whether it's a subscription model, expansion pricing, or microtransactions. Guild Wars 2 game director Crystin Cox gave a talk at GDC earlier this year about how the company develops its pricing models, and luckily for Gamasutra readers, we were able to get some one-on-one time with Cox to go in-depth on this subject.
It was a great chat, and we've transcribed some of the more key insights from Cox about making good microtransactions below. And if you want to review our full conversation with her, you can part 1 and part 2 right here.
Bryant Francis, Editor at Gamasutra
Crystin Cox, ArenaNet game director and founder of commerce team on Guild Wars 2
Francis: In Guild Wars 2 the core game is free, but the expansions, which unlock a lot of new group and solo content, cost money. What are the other primary ways do you focus on monetizing this game in a way that's player friendly, as we say.
Cox: Yeah, we asked, "Why are people playing the game for a long time? What are they going to want to purchase to enhance that gameplay experience?" For an RPG, especially a massively multiplayer RPG, cosmetics are really high on that list. Expressing yourself, relating to other people, showing off, making a visual representation of who you are, is hugely important to a lot of MMO players, so that was always very high on our list. We knew that we wanted to do a lot of cosmetics.
We also knew that we wanted to do some convenience stuff because Guild Wars 2 is fundamentally built around this idea of respecting player's time. We've never raised the level cap. We try very hard to put as many things in the count-wide progression line, as opposed to a character's, so if you decide to switch characters we're not making you go back through and grind the stuff you've done before. We came from a very strong philosophy of respecting people's time, and so we knew we also wanted to do some things in the store that were about respecting time and providing convenience, and the ability to, if they wanted to spend money to speed things up or travel quickly back to town, or sell their goods out in the field, to do things like that.
We also were, from the beginning, pretty dedicated to a dual currency system. You earn gold from playing the game, completing quests and defeating enemies, things like that. And you can purchase gems, which are our premium currency. But you can also freely exchange the two of them on the Currency Exchange. So if you're a player who plays a lot, and you accumulate a lot of gold, you can go to the currency exchange and exchange your gold for gem instead of opening up a transaction with us and giving us a credit card or something. And if you have a lot of gems, you can exchange those gems for gold if you want to do something like buy stuff on the trading post, which is our auction house.
So we wanted that to be something that was deeply connected to the game, because we felt like it was something that was more empowering the community, and letting the community support each other, as well as just using gems to support us. So that was something that we knew we wanted to do from the beginning. When I got here and we started working on what that would look like, we got pretty excited about doing it with a completely free-floating exchange rate between gems and gold, which I think has been very successful for us.
Francis: I actually can't think of any other games that allow such a straight conversion rate like that. I'm kind of curious if it's been, "Oh we got it working, but it's definitely less revenue than if we tried another method." Can you tell us what are the ins and outs of using a direct conversion system like that?
Cox: One of the big benefits is that, if you study economics, you get patterned into your brain that the free market will give you a much more accurate idea of value than anything that you can put artificially on it, and that's true. I think that we've actually never said "We would have made more money" because it's difficult to predict a negative. But I think we've done incredibly well with the free market because it accurately represents the value of the things that people are purchasing.
And, as I talk about a lot in my talk, the big key to designing microtransations is making sure that you're delivering value, and that people are evaluating the things they are purchasing at the value you've assigned to it as closely as possible. So I can get into a situation where there's a part of me that wishes we could do that with everything. I don't have to set a price, I can just let the market decide exactly what players want to pay for it! It's incredibly valuable, because that is where you know for sure that the price of gold right now in Guild Wars 2 accurately reflects how valuable gold is.
Francis: A viewer in Twitch chat asks, "with lootboxes hitting the spotlight to the point that legislation is being considered against predatory monetization practices, when designing an in-game economy and systems for players to engage with, do you take into account balancing players' interest, time management and other factors, so the end result is as far from 'hardcore grind' as possible? My apologies if the question sounds loaded, I am curious on modern in-game economies given how easily they can spill into the real world nowadays."
So I guess, because we've spent the whole time talking about how ArenaNet is trying to be player-first, maybe it's worth asking about what is a non-painful monetization. From the ground level?
Also a follow-up question if you feel like answering it, how are you personally looking at headlines talking about possible legislation on your industry?
Cox: To take the first question, what's a non-painful monetization plan? The answer to this, I think, sometimes a bit unsatisfying, because it's not black-and-white. To me, it's about setting ethical guidelines for yourself, and asking yourself as a team what are you ethics around this. A lot of it comes down to, me personally, golden rule stuff. As in, you shouldn't do things that make players unhappy, or regretful.
Players shouldn't feel bad at any point that they made a purchase. That sounds very fuzzy I know, and sometimes that's not particularly satisfying. I've run into this with my own team, when we're reviewing designs, and we look at it and we ask these, what sounds like, high-minded questions, like would anybody ever be unhappy if they bought this?
I do think you have to go there, you have to put the discipline into your process, to say, we're going to as that question over and over again. We're going to be brutally honest with ourselves about the answer. You don't always get it right, in design, especially with MMORPGs when putting a lot of content out and making a lot of changes, and there are a lot of complex changes going on. It's not like we've hit it out of the ballpark every time. We've totally make mistakes, and you try to take that stuff and learn from it by actually listening, when people say, you've made a thing and I am unhappy that I bought it, I'm not happy about it. You try to take that into account.
But really, to me, there isn't this set of "dont-do-this-do-this, use this system don't use this system." It's pretty specific to the game as far as that is concerned. I think that, when you're doing design, especially when you're with a team of designers, it's actually sitting down and as a team saying, what's our quality bar for this? What do we want to hit? And when it comes to monetization that has to include things like, how is this going to affect our players' lives, how is this going to affect out player's happiness, and their overall enjoyment of the game that we're making. Because monetization is part of the game. You don't get to say "Oh the game is fun but the monetization made me want to tear my hair out." Then the game ultimately isn't fun, because ultimately that's part of the game too. So that is the answer.
How do I feel about the discussions going on right now about lootboxes? How I feel about it is mostly sad. I wish it didn't need to come to this. I think most people in the industry were like, I wish we weren't at a point where people are considering bringing legislation, especially because I think everyone looks a little skeptically upon that, like, "Is this really going to make a difference?" Is government going to be able to have the kind of nuanced understanding of this to write laws that would have any real impact, and that's discouraging. Ultimately when it comes to lootboxes, I believe that there are times when lootboxes provide a real value to players, they provide something that players want.
It is very easy to misuse them, and to use them to satisfy a developer need instead of a player need. And then I think you're going to have, inevitably when that happens, you're going to have player resentment, you're going to have players saying "I'm not happy I bought this, I bought a whole bunch of them and I wish I bought less, because I was sucked into this cycle." And we really need to be working, as designers to minimize that. To be thinking about how we are affecting our players and ultimately are we leaving them happier than they were before.
Yeah, government might step in and put some guidelines on it, or cut some lines in the sand. I don't have a lot of faith that that's going to do a lot. I think that the worst-case scenario is that some teams and companies, especially in a high-profile way, make big mistakes and produce designs that really don't do great things, and cause players pain and angst, and then we end up nuking the entire thing from orbit. Saying "You know what? No one can have lootboxes anymore." So that even if someone made one that was great and people loved it and wasn't predatory at all, you can't have them. I think that would be a shame, because as a designer you never want tool taken out of your toolbox.
Francis: Midway through that conversation you talked about lootboxes being helpful for players as opposed to being helpful for developers. I think one would say the broad reason they're helpful for developers is they can extend a grind loop, for instance, if your progression depends on stuff coming out of the box, players will have to spend time opening boxes just to get it. What do you think really does help players out? What do you think they can be used for good, if at all?
Cox: I'll go over this in my talk a little bit, but I think there maybe be other specific situations that I'm covering here. I'm not saying this is the be-all and end-all, but in general there's a couple of kinds of, and they have pretty clear goals that they're trying to achieve, they're mostly around allowing players to get something for a bit of a discount, but not be able to choose exactly what they're getting.
When we talk about cosmetics, there's a demand for every individual cosmetic. Like maybe I love cowboy hats, I just want to buy cowboy hats. But there's also a demand, and a lot of players feel this way, for just cosmetic options. I like cowboy hats sure, but I also like bandannas, and I like clown hair, I like everything. I don't really have a super strong preference. I just want more things to put in my dress-up box. That demand can be satisfied a lot better sometimes with just giving you a random thing, because that can be done a lot cheaper. If you don't care about which one you get and you just want one, you can get it for a lot cheaper.
When you're talking about games that have rarity, and rarity's a big part of that game, then lootboxes can be done to distribute something on a small scale, so that not everybody has access to it but some do, as sort of a jackpot item. And then that gets into a little more complexity around the economy and your game, and whether not this is an enjoyable part of your game for people to play, play with the economy of some such. But if it is, then you can use lootboxes to be a pretty good distribution for something that's very rare.
I think one of the keys for us, one of our goals, and this just got reinforced for us big-time, on the Guild Wars 2 team, is that we want to make sure that we never have something that can only be acquired randomly. We haven't always succeeded at that, but I feel like we feel that way now more than ever, that that's a really good rule of thumb.
Francis: That sounds like something that's I believe the people listening today appreciate. I know that I do.
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