The service model is an interesting one, to be sure, and holds a wealth of promise for revenue, and flexibility in game design. The service model allows for monetary value to be extracted over time, rather than in unreliable bursts around release of main products and expansions of those products. Exactly how this is done varies. Previously, games as services preferred the subscription model, seen in popular games such as World of Warcraft and  EVE: Online, with a payment given per month. Current models often do something similar, but attempt to offer more flexibility in payment, in exchange for the possibility of greater payment. This can involve slowly releasing more content in downloadable packages that are purchased individually, or, increasingly, simply having digital ‘goods’ that exist within the game cost additional money. Sometimes these models are mixed, like in the case of a “season pass”, where a one-time amount of money is paid with the promise that later on the purchaser will receive those “digital goods” as the season unfolds. All of these are in general known as “microtransactions” – often the total microtransactions a game will offer over its lifespan will add up to be more, sometimes significantly more, than the original game. Microtransactions are not without controversy, however. Many support them under the idea that by dividing up the cost of the game, players have more power to pick and choose what content they get, allowing them to not purchase a piece of content they feel would not suit them. On the other hand, many game studios take the model of “having their cake and eating it” releasing the game at a full price as well as offering microtransactions at the same time, citing extra costs, despite the cheapening of technology[1]. Some controversy was raised when it was revealed that certain companies were creating finished games, then purposefully removing content to sell it back to players separately for more money, rather than developing this content over time.

All the above is a preamble to the fact that I believe that the games as a service model is an inherently risky one, and Canadian developers for large ‘game service’ companies should keep an eye out for possible shifts in the market. There are a few reasons this is risky. Most dramatically, there may be legal difficulties as far as microtransactions go. The idea of microtransactions was already somewhat controversial due to, critics argued, often mimicking the tactics used by casinos to extract the maximum amount of money from customers who are particularly prone to gambling addiction behaviours, known in the industry as “whales”, with players with more self-control being known as “minnows”[1]. This set up became even more controversial (if possible) when companies began to sell microtransactions in the form of “lootboxes” – where the content provided was unknown and randomized, thus encouraging players prone to gambling to continue to input money in the hope of getting a good result. The straw that broke the camel’s back was likely the inclusion of the lootbox system in the new Star Wars and FIFA soccer games, franchises traditionally popular among children.[2] Already some American states and European nations are making movements towards classifying this kind of monetization as actual gambling, and regulating it as such.[3] Many companies have decided to fight these decisions, and how it players out remains to be seen, though Europe at least is not exactly known for its good feelings towards large American tech companies. Just how much of an impact these kinds of regulations can have remains to be seen – but many of the companies at the heart of the controversy, like Star Wars and FIFA licence holder EA, have significant investment in Canada. If they are forced to make an immediate change to their monetary model, there may be significant disruption in the Canadian market. So far, EA has indicated it wants to fight for its rights to operate as a gambling company without being referred to as so, which may indicate a lack of plan if its investment in this strategy does not pay off.[4]

However, there are less obvious threats in the move towards microtransactions and the live service model. The problem, as mentioned in discussions in class, is that of “service saturation”. Essentially, those interested in the entertainment business tend to seriously look at the growth of video streaming services and question as to what the limit of subscriptions is, as more companies such as Disney throw their hats into the ring. Any given customer will only feel that a certain amount of these services is returning any real worth to them – there is only so much time and money. However, companies in the interactive media seem highly confident that their live service games will not suffer from undue competition, even though certain companies are, indeed, competing with themselves. EA once again makes a perfect example here, where their much lauded launch of Anthem had its thunder stolen by their other product, Apex Legends. Many of the live service games are becoming almost like second jobs, with the most value extracted by the player through daily play. As more and more companies move to this model, players have to increasingly decide which of these services are worth their time and money – and with multiple companies making multiple such services, they are going to reach their limit much quicker. These companies often word the service model as something that will save them from the unpredictability of the “blockbuster to blockbuster” model, where games must gamble on their opening months. However, there is no indication that the service model is any more reliable. Ubisoft, for example, had a great success with one of its Tom Clancy licenced service titles, Rainbow Six: Siege, which started slow but eventually won over a large fanbase. On the other hand, another Tom Clancy service, The Division, was considered much less successful, and instead of continuing, a sequel was made as a second chance to “get it right”.

The thing is, this has all happened in the gaming industry before. The gaming industry is nothing if not a trend chaser, especially in the larger company space. The most similar experience it has gone through previously was the “Massively Multiplayer Online Roleplaying Game” craze, based around games where a larger number of players could be active on a single “game world” at once. Running servers is expensive, of course, so the companies operating these games would often ask for a subscription fee per month. Blizzard Entertainment gained a smash hit in the genre with their “World of Warcraft” MMORPG, and a multitude of companies scrambled to copy its success. Barring a few niche examples, they mostly failed. The fact of the matter was that players often already had World of Warcraft, or their differentiated niche of choice. It was not until companies started to offer another a differentiated model (normally microtransactions) that people could be lured away from their subscription games or tempted to play others. In the end, engaging in industry rushes turns into competitions to seize time, attention and money from a demographic increasingly beset by options. These services will have to be significantly different from each other in order to grab attention – but the trend is going towards homogenization, rather than towards differentiation of offerings. Companies copy other companies, with EA’s Anthem release seeming very similar to the earlier Destiny 2 release by Activision[1]. Ubisoft ran into this problem with themselves with the aforementioned Division and Rainbow Six, two tactical military services based on the works of Tom Clancy.

[1] https://www.rockpapershotgun.com/2018/06/10/anthem-preview/

[1] https://www.gamesbrief.com/2011/11/whales-dolphins-and-minnows-the-beating-heart-of-a-free-to-play-game/

[2] https://www.forbes.com/sites/insertcoin/2018/02/13/ea-activision-and-others-should-be-afraid-of-hawaiis-new-loot-box-bills/

[3] https://www.eurogamer.net/articles/2018-04-25-now-belgium-declares-loot-boxes-gambling-and-therefore-illegal

[4] https://arstechnica.com/gaming/2018/09/ea-defies-belgian-loot-box-decision-setting-up-potential-gambling-lawsuit/

[1] https://gamerant.com/video-game-prices-breakdown-514/