Activision made $4 billion US in 2017 in micro-transactions

[GoodBytes]

While the massive hate on EA on micro-transactions happened in StarWars Battlefront 2, Activision is king in micro-transactions sales. Today, the company releases its quarterly financial statement, and they indicate that they have made around 4 billion dollars US in micro-transactions alone, in 2017.

That said, it must be said that those numbers include mobile games, such as games by King, a studio that they own, who are the maker of Candy Crush. Separating the numbers that is about 2 billion in mobile games, and about 2 billion "in-game purchases" (so it includes DLC. Sadly, they don't split those numbers up) coming from PC and Console games.

 

Quote

During Activision Blizzard’s Q4 2017 financial results, the publisher revealed that it made $7.16 billion in revenue in the entire fiscal year, a record for the company.

Of that, $4 billion was generated by in-game purchases. Activision owns King, makers of Candy Crush and other mobile, microtransactions-heavy games, but even when you separate King’s share, valued at $2 billion, you’ll still be left with $2 billion from PC and console in-game purchases.

says vg247.com

 

The company overall revenue is ~7.16 billion dollars US. So doing the math, you can see that the majority of the money they have made are from micro-transactions and DLCs. With such numbers, it is clear that DLC and micro-transaction is a business decision hit, and it is clear that mass amount of gamer like spending money on acquiring DLC and micro-transactions in their games. We don't know EA numbers, but if they are similar to Activision, you can bet to see even more DLC and micro-transactions on PC and console games, and really no plans to diminish micro-transactions games on mobile.

 

Sources:

https://www.vg247.com/2018/02/09/activision-blizzard-made-4-billion-microtransactions-2017-half-revenue/

http://investor.activision.com/releasedetail.cfm?ReleaseID=1056935

 

This reminds me the early days of DLC, people hated it, but it looked like it was a vocal minority, same we can from micro-transactions on PC/Console now. People complain, but the numbers shows that mass number of people don't mind them, and even embrace them by spending a lot on them. What do you think?

[NvidiaIntelAMDLoveTriangle]

And thus micro-transactions will live on forever.

[Tech_Dreamer]

"micro" transactions .

[ItsMitch]

i need more hands

 

[Damascus]

Raise the cost of games to what they should be, more like $100 and ditch dlc.

[Humbug]

4 billion US dollars. Hmmm

 

That's how much Disney payed George Lucas to buy Star Wars.

[ATFink]

Wow, I hope this in-game purchase figure doesn't continue to ruin potentially great games despite the amazing revenue it generated.

 

Like @GoodBytes stated, I agree it is a shame that DLC was included in an in-game purchas figure.

 

IMO DLC is fine (often times good) as long as the main game is not compromised for the sake of selling DLC. GTA IV is a great example of this (sucks it was so terribly optimized on PC, but whatever).

 

If a game is a great standalone I'll buy it and most times I'll happily buy its DLC (like with Witcher III and Civ V). Often times this further improves the experience of a game I play by adding new content when I finish it. With built in assumed DLC sales this could lower the price of released games (assuming demand is elastic). However, I won't buy a game that is only good with additional purchases.

[divito]

I'm not sure that I'd characterize it as people "don't mind them." I think there are a couple factors that misconstrue this. 

 

Firstly, baking in functionality for pay-to-win, or any basis that allows you to pay for stats/gear/etc..., is misleading because there are clearly a population of people that won't (or can't) play the conventional way as before micro-transactions arrived.

Secondly, handicapping the game's functionality, modes, or "completeness" in place of DLC, etc... has been a cheap way of people to pay smaller amounts to get a more robust experience that would have been normal after their initial investment in the game.

Ultimately, it's been a smart way for them to capitalize on a gaming community that wants a good experience, but unfortunately has been offered in a starter -> a la carte model almost.

[ravenshrike]

8 minutes ago, Damascus said:

Raise the cost of games to what they should be, more like $100 and ditch dlc.

Dammit, now I have to post a Jim Sterling video.

 

 

 

As to the OP, ignoring mobile games EA is far and away the one making the most money off of lootboxes, and not MTs in general. This is primarily because of the various sports titles they hold of course.

[Damascus]

10 minutes ago, ravenshrike said:

Dammit, now I have to post a Jim Sterling video.

Interesting watch, though I stand by what I said (btw, 100 CAD =75ish USD)

[dizmo]

Oh joy. I'm not looking forward to all the bitching that's going to come of this, or all the people who hide their heads even farther into the sand believing that everyone holds the same views on loot boxes as they do. Clearly not the case with that kind of revenue. And while we can all scream and cry about it...with those numbers, it doesn't matter. Cash is king, and they're raking it in. 

 

22 minutes ago, Damascus said:

Raise the cost of games to what they should be, more like $100 and ditch dlc.

I don't think that'd be enough, it'd have to be closer to $150 - $180. Which personally I'd be fine paying if the game was at a great level of spit and polish. That's less than a set of tires for one of my mountain bikes. 

[Tsuki]

keep in mind, thats Activision/Blizzard which means 95% of that money comes from just Overwatch lootboxes and Hearthstone packs.

[Master Disaster]

1 hour ago, Damascus said:

Raise the cost of games to what they should be, more like $100 and ditch dlc.

So you're suggesting they should try and make more money by pricing more people out of gaming?

 

You realise MTXs work because it's many small payments taken over an extended period so even the poorest gamers can still afford $4 a week on some extra stuff for their game.

 

Increasing the entry price would mean a lot fewer people could afford to pay for entry and ergo they'd make much less money. I wouldn't be surprised at all to see the entry price go down and the amount and variaty of MTXs go up because they make more money if more people have more choice on what to buy.

[Damascus]

23 minutes ago, Master Disaster said:

So you're suggesting they should try and make more money by pricing more people out of gaming?

 

You realise MTXs work because it's many small payments taken over an extended period so even the poorest gamers can still afford $4 a week on some extra stuff for their game.

 

Increasing the entry price would mean a lot fewer people could afford to pay for entry and ergo they'd make much less money. I wouldn't be surprised at all to see the entry price go down and the amount and variaty of MTXs go up because they make more money if more people have more choice on what to buy.

It's the same amount of money either way, if someone can afford $4 a week, save for an extra 14 days.  Currently AAA games cost about $65usd/80CAD and I'd like it to be 75USD/100CAD instead of having a $60 game + $60 worth of dlc.

[Master Disaster]

6 minutes ago, Damascus said:

It's the same amount of money either way, if someone can afford $4 a week, save for an extra 14 days.  Currently AAA games cost about $65usd/80CAD and I'd like it to be 75USD/100CAD instead of having a $60 game + $60 worth of dlc.

Then I suspect you really don't understand what it's like being poor. It might sound as easy as "just save for a few days to make up the difference" but when it's save $4 today towards a game or eat today which do you think will win?

 

On the flip side there might be days when said poor person has $4 extra that is unaccounted for and might want to spend on their favourite video game.

 

Having a low entry price and then the option to spend anything from a small amount to a large amount extra is ALWAYS going to earn you more than a high entry price and no extra monetisation. The more people you put in front of your shop and the more choice your shop has the more it will earn. That's common sense economics and the reason why $60 is still $60.

[Damascus]

3 minutes ago, Master Disaster said:

Then I suspect you really don't understand what it's like being poor

M8, I grew up well below the poverty line, single mom/2 kids and no job is the archetypal "poor"

 

It's what taught me how to save my money and budget, anyone can do it.  I also said weeks, not days.  $8 is less than an hours work minimum wage in every province in Canada.

 

4 minutes ago, Master Disaster said:

Having a low entry price and then the option to spend anything from a small amount to a large amount extra is ALWAYS going to earn you more than a high entry price and no extra monetisation. The more people you put in front of your shop and the more choice your shop has the more it will earn. That's common sense economics and the reason why $60 is still $60.

Sure, but it's an unethical business model.  I have no issues with dirty bomb or csgo for example, both are games that cost little to nothing up front and let you buy purely cosmetic add-ons.   Another side of that would be tw3 or the souls games where after paying AS A pricing I'm given the option to buy cheap dlc that adds a ton to the game and takes away nothing.

 

What I do have a problem with is the strategy employed by destiny (1/2) of "you bought our incomplete game for $60 - we need another 2 $30 dlc otherwise you can't use every item, even if you could before"

 

Or battlefronts $70 (?) upfront cost followed by a total of $2100 worth of nearly locked content that actually gives a serious gameplay advantage.

[Master Disaster]

2 minutes ago, Damascus said:

M8, I grew up well below the poverty line, single mom/2 kids and no job is the archetypal "poor"

 

It's what taught me how to save my money and budget, anyone can do it.  I also said weeks, not days.  $8 is less than an hours work minimum wage in every province in Canada.

 

Sure, but it's an unethical business model.  I have no issues with dirty bomb or csgo for example, both are games that cost little to nothing up front and let you buy purely cosmetic add-ons.   Another side of that would be tw3 or the souls games where after paying AS A pricing I'm given the option to buy cheap dlc that adds a ton to the game and takes away nothing.

 

What I do have a problem with is the strategy employed by destiny (1/2) of "you bought our incomplete game for $60 - we need another 2 $30 dlc otherwise you can't use every item, even if you could before"

 

Or battlefronts $70 (?) upfront cost followed by a total of $2100 worth of nearly locked content that actually gives a serious gameplay advantage.

I wasn't trying to offend, sorry if I did.

 

Oh I 100% agree with that one but remember these publishers are in the business of taking everything they can off anyone they can regardless of background. We are nothing but sharks, whales or dolphins to them. It's how they operate.

 

[Damascus]

1 minute ago, Master Disaster said:

sharks, whales or dolphins

Precisely this, they want those whales.  I'm personally content to buy whatever the cheapest possible option is at any given time (GOG + Steam) and then show my monetary support in other ways if the game is good.  I would love it if game and anime studios would open patreon or some kind of subscription.

 

Like, I will pay trigger $10 a month in perpetuity, in exchange I have access to all of their content immediately through their own service. 

 

Or maybe the same thing with CDprojectred, I donate directly, with no middleman and the studio gets my money as long as they make good games.

 

Also, no offence taken

[Taf the Ghost]

Valve has made 100s of millions selling Hats in TF2. 

 

The issue is always "What are you paying for?" and "How does it effect what you already bought?". StarCraft: Brood War came out in 1998, 6 months after Starcraft launched, and I believe at roughly 1/2 the price. That was 20 years ago and we were paying for "DLC" if it was worth it.

[Misanthrope]

3 hours ago, Damascus said:

Raise the cost of games to what they should be, more like $100 and ditch dlc.

Except this article also quotes mobile games as the main earners and those cost orders of magnitude less money to make than AAA games

 

So if you wanted to do that, adjusting for what an AAA game makes vs a mobile game makes taking into account return, AAA games should cost something like 200 to 300 bucks each.

 

I am honestly surprised Ubisoft is still making AAA games at all after seeing this numbers and this also explains why they could care less if the PC or Console industry implodes tomorrow.

[Majestic]

4 hours ago, Damascus said:

Raise the cost of games to what they should be, more like $100 and ditch dlc.

See second paragraph of comment to dizmo.

3 hours ago, dizmo said:

Oh joy. I'm not looking forward to all the bitching that's going to come of this, or all the people who hide their heads even farther into the sand believing that everyone holds the same views on loot boxes as they do. Clearly not the case with that kind of revenue. And while we can all scream and cry about it...with those numbers, it doesn't matter. Cash is king, and they're raking it in. 

 

I don't think that'd be enough, it'd have to be closer to $150 - $180. Which personally I'd be fine paying if the game was at a great level of spit and polish. That's less than a set of tires for one of my mountain bikes. 

Are you saying Loot boxes and micro-transactions haven't completely taken the joy out of AAA games? Who the hell are you to tell people who are sad to see their hobby fall prey to corporate greed that they are "bitching" and "sticking their head in the sand". 

 

Especially when you follow it up with this "argument". $150-180. Based on what. Even assuming for a second the market was willing to pay this number for a game, in a hypothetical scenario (because they fucking wont), how would this prevent developers and publishers from not making the kind of business decisions that are now driving costs up? It would only enable them to hire more overhead and invest in more pretty graphics engines, with even larger useless sandboxes. Instead of focusing on reducing overhead and condensing the gameplay into a faster paced, enjoyable experience. Creating games that make "some money" instead of "all the money". Smaller games that are more finetuned towards specific gamers instead of appealing with every game to everyone, and making a boring jack-of-all-trades mess. 

 

I think the people that have built the gaming industry with their love and dedication to the platform have every right to be mad at the normies who ruined it, with their gambling-addicted minds that just can't stop craving that dopamine high every time they pay those micro-transactions. 

[mr moose]

There seems to be some numbers being thrown about as to what a game would cost without DLC.   I'd just like people to remember that videos games have been around a lot longer than the internet and  DLC hasn't been a thing for all games.   The earliest equivalent of DLC I remember would be expansion packs you could buy on CD.  usually they were A$10-A$30 depending on the size and game.   To be honest we just don't know how much more a game would be if they ditched DLC. 

[Sniperfox47]

End of the day, saying "Gamers don't mind" because a lot of people bought them is misleading. Not everyone who plays games is a "Gamer", just as not everyone who's ever told the tiniest fib is a "Liar".

 

Anybody who legitimately cares about the future of the gaming industry should be appalled at the MTX push. It should be a slap in the face.

 

The average person who plays games is not a "gamer". They're not a part of the community that built gaming, or wants gaming to flourish. Sorry to sound hipster, but gaming has reached that point where it's so mainstream that the average user just doesn't gaf.

 

How popular has Clash of Clans gotten? Would any serious gamer say it's an amazing game? Even a good game? It's play to win, MTX riddled, and consists of a dick measuring tool backed by your wallet size. Even still, it's crazy popular. Would you call someone a "gamer" just because they play Clash or Farmville?

 

It's interesting to see the Indie community where games devs were 15-20 years ago. Coming out with free content packs (How many were there for UT99?) and huge paid content expansions (Starcraft: Broodwar anyone? Tiberium Sun: Firestorm? Diablo: Hellfire?). I hope these indie games can build into a new strong industry for gamers, I just hope it doesn't go down the same road mainstream gaming has.

[raphidy]

Wow, that's some good money. I think think the whole reason I never had to pay for MTX is because I mostly play single player game. Thank god.

[Brooksie359]

8 hours ago, dizmo said:

Oh joy. I'm not looking forward to all the bitching that's going to come of this, or all the people who hide their heads even farther into the sand believing that everyone holds the same views on loot boxes as they do. Clearly not the case with that kind of revenue. And while we can all scream and cry about it...with those numbers, it doesn't matter. Cash is king, and they're raking it in. 

 

I don't think that'd be enough, it'd have to be closer to $150 - $180. Which personally I'd be fine paying if the game was at a great level of spit and polish. That's less than a set of tires for one of my mountain bikes. 

I mean it's likely a lot of that money is from blizzard microtransactions which I don't mind. I mean microtransactions for cosmetics seems fair to me. Although I would wager that hearthstone play a role in this as well. Its pretty easy to end up spending money on card packs or the dlc.