The numbers for Q3 2020 are in, and Activision is up a cool $1.2 billion over three months from microtransactions alone. Microtransactions have always been a polarizing feature of the gaming industry since their introduction, and the mere mention of them is enough to elicit some grumbling from players. Regardless of how s feel about MTX, they're the darling of the developer world because, according to financial reports, they work, and they work well. The new figure represents over half of Activision's net revenue from the company's third quarter, cementing the notion MTX are here to stay.
Microtransactions in video games have always been controversial, in part because they require players who have already spent money on a game to spend even more to get rare skins and stronger weapons. The practice is also akin to gambling, particularly pertaining to loot boxes, and has been branded as predatory and exploitative, especially in children. EA and Activision lead the pack in utilizing the practice, which is now so widespread it's almost impossible to think of a modern major title without microtransactions. International gaming commissions have pounced on companies in recent months to ban loot boxes, citing local gambling laws. However, gaming companies are willing to spend whatever it will take to keep the practice going because nothing they spend compares to how much they can potentially make.
With the COVID-19 pandemic ongoing, players stuck indoors are, more than ever, turning to video games to help them cope. And, as $500 million from microtransactions last quarter, nearly a third of total reported revenue for Q2. Players also clocked in seven times more hours this quarter as compared to last year.
Some may argue microtransactions are a necessary evil because the cost of producing titles has dramatically increased, while the retail price per unit hasn't gone up much. However, it's important to the money raked in from MTX isn't necessarily going straight back to the developers; Activision CEO Bobby Kotick has faced scrutiny for his high paycheck, especially in comparison to what the average employee makes. All told, it's increasingly difficult to justify the prevalence of microtransactions if consumers become more conscientious of where their money is going. MTX are looking a lot less necessary and quite a bit more evil.
European countries are working in earnest to dismantle the microtransaction industry brick by brick, wielding their local gambling ordinances as pickaxes to knock down the practice and bury it for good. However, that likely won't make much more than a dent in the profits. The power lies with the players to rid the world of the microtransaction scourge.
Source: Activision
