Activision Reveals Why Microtransactions Will Never Go Away

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Microtransactions – love 'em or hate 'em – they have become part of the fabric of video games and video game development, particularly for AAA titles.

And why is that? Because they make a lot of money.

Whether its via DLC or loot boxes, microtransactions have helped birth the “games as a service” model and alter the face of not just multiplayer games, but increasingly single-player focused titles.

They've also been at the heart of much of the industry's controversy as of late, and have swallowed the entire narratives around certain games, such as Star Wars Battlefront II and Middle-Earth: Shadow of War, and to a lesser extent Forza Motosport 7. Lootboxes specifically have even prompted global legislation, with recently both the Netherlands and Belgium releasing stern positions on the practice.

Put more simply, Microtransactions – and especially loot boxes – have a boogeyman reputation in this business, and have a knack to cause consumer backlash. Yet, microtransactions of all kinds persist, thanks to the insane amount of money they make.

During a recent earnings call, Activision revealed that in-game content features and services continues to be key in player investment, one of the companies strategic pillars to the approach of video games.

Just this last quarter, in-game net revenue was a record $1 billion. Yes, you read that right. Billion, not million.

A lot of this number comes courtesy of mobile game developer King – the Candy Crush people – who is owned by Activision, and who had its highest net bookings quarter since 2015.

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So why do microtransactions exist and continue to evolve and grow in presence? Well, because $1 billion is a huge number. Microtransactions already have taken over the mobile game space, and while the console and PC development space hasn't been as altered as much, it could be only a matter of time until it looks more similar to its mobile cousin.

In other recent and related news, during the same earnings call, Activision talked about another trend in video games -- battle-royale modes. While talking about the sub-genre, it noted that it sees Fortnite -- the macdaddy of the space -- as its largest competitor at the moment.