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The Problem With Live Service Games

Published May 15, 2024, 10:22 PM

From always-on DRM to the heartbreak of online games getting shut down, we look at the issues gamers encounter with the live service game model.

Welcome to tech Stuff, a production from iHeartRadio. He there, and welcome to tech Stuff. I'm your host, Jonathan Strickland. I'm an executive producer with iHeart Podcasts and how the tech Are you well. Welcome to our continuation on the topic of games as a service or live service games. If you missed Monday's episode, I recommend you go and check that one out first. But in general, we're talking about the tendency for video game developers to move toward generating games that have a long tail for revenue, whether that's setting up a subscription model or micro transactions or something else. I left off last time alluding to how some developers and publishers started to require gamers to have a persistent Internet connection for their games. That's where we're going to pick up today. These are games that would require players to have an Internet connection even if the game they were playing otherwise had no online component to it, like no multiplayer, nothing else. So this was all part of a DRM strategy or digital rights management. Still very much something that's happening today, but you know, a decade ago, this was kind of a new idea. Back in twenty eleven, Ubisoft released a PC version of the game from Dust from Dust in case you're not familiar with it, I wasn't. This is not one of the Ubisoft titles that I've played, but anyway, it's a game in which you play is kind of a god. You're manipulating landscapes so that your worshippers can establish communities and prosper, kind of like Populous if you remember those old games. The PC version of the game required an Internet connection in order to even launch, but the game itself was a single player experience, so if you didn't have an Internet connection, the game would not even start. You'd be Soft apparently posted a message at some point that said you could play the game with on Internet connection at least after the first play session, where you would register your copy. But according to sites I was looking at various media outlets tested this and found that not to be true. So the whole purpose of this particular practice was to cut back on piracy and to require players to prove that they were playing on an authorized copy of the game. That you're presumed guilty until you prove yourself innocent. In other words, now, as I mentioned in the previous episode, one thing game companies really want to eliminate is the video games after market. That's bad for gamers because you know, sometimes I remember doing this myself. You go to a game store and you look at the used games and say like, well, I can't really afford to buy this brand new, but I can buy a used copy and experience this game. Well. Game companies hate that because they don't make money on any subsequent sales of used copies. They only make money if you're buying the new ones. So moving to a digital realm where digital distribution becomes the norm as opposed to physical media, that would be a huge benefit to the video game companies for lots of reasons. It cuts down on production costs because you don't actually have to make anything. Physical cuts you know, you don't have to ship anything, you don't have to have warehouses to store inventory. There are a lot of things that it solves. But it opens up the possibility of piracy. And there's not a publisher out there, no matter what kind of media we're talking about, that isn't up in arms about the possibility of piracy, not even if piracy is even happening. We've heard in the past about how companies have argued they have lost millions or even billions of dollars due to piracy. Although this is all always a difficult argument to make because, as I have said many times, you can't point to piracy and say that's the same thing as lost sales because there's no guarantee that the people who pirated the stuff would have purchased it legitimately. Otherwise you can't make that argument. But it's obvious that piracy could have a massive impact. So this is particularly understandable with the digital landscape. It is incredibly simple to make copies of stuff. It's almost effortless to do so, right, Like, you could just make a copy available on something like a peer to peer sharing network or a server or something, and that's all there is to it. You don't have to like sit down and transfer tapes to disc and all that kind of stuff. So companies have spent a lot of time and effort developing strategies to prevent people from being able to do that. The problem for gamers is that these measures often create a negative experience for people who have purchased a legitimate copy of the game, and if anything, that kind of actually encourages more piracy attempts because people will try to find a way to strip DRM out of games so that they can have an unfettered gaming experience. Like when the experience of playing a legitimate copy of a game is worse than playing a pirated copy, people are going to start pirating more. It's been argued many times that DRM has made piracy worse rather than prevented it. Anyway, Ubisoft's move was a pretty rough one, and to say that people were upset is putting it mildly. Though they might be more upset if From Dust had actually been a more popular game. I don't know if they were like diehard From Dust fans. I honestly had not heard of this game before. Diablo three, which inarguably had a much higher profile than From Dust, had similar criticisms thrown its way. Diablo three is a game from Blizzard, and the Diablo franchise has been a really popular one over the years. It's also no stranger to play or frustration. There have been some pretty notable outcries from players relating to Diablo. Like From Dust, Diablo three required and always on connection because of DRM. But unlike From Dust, Diblo three also had a few benefits that derived from that persistent online connection, stuff like you know, leader boards and that kind of thing. So you could argue there was at least some additional value for the player for connecting online for each session, you know, beyond just being able to boot up the game and play it in the first place. But people were still upset that a single player game would require an Internet connection at all. And I get it. You know, I've lived in places that have had really spotty internet, and I've also taken games with me on trips where I've gone to places where there was no Internet connection at all. It is beyond irritating when you fire up a game that you have paid for, perhaps even paid full price for, and because of a lack of Internet connection, you can't launch it because the game just assumes you're a nasty little thief. Like again, you are presumed to be guilty. It's pretty insulting after you've dropped like sixty or seventy dollars on a title. Anyway, this whole thing is a bit of a tangent from games as a service. It is related, I would argue, but it's not directly connected to it. I guess the persistent internet connection element, however, would become a component for a lot of these live service games. It's what enables companies to create a stream of updates and content releases that keeps players engaged in particular games, and it opens up opportunities for these companies to make more money. Now. In that last episode, I also talked about MMO games that's massively multiplayer online games. I specifically talked a lot about mmoorpgs. The RPG stands for role playing game. Just in case you're not familiar, Nearly all of the early mmoorpgs worked on a subscription model in which gamers would have to purchase a copy of the game. You buy a copy, but then you would also have to pay a recurring monthly fee to access the online servers that hosted the game. Typically, the purchase would come with a certain number of months added in to or bundled in with that price, so that you're not, you know, paying fifty bucks for a game and then immediately having to pay ten or fifteen dollars a month to play it. But eventually, you know, even if you didn't mind the fee, you would potentially run up to a problem where you have experienced kind of like everything the game has to offer. So at that point, a company might see subscriber numbers start to drop off, and the costs of running servers so that you know, remaining players could continue to access the game would continue, right, like, the cost of supporting that game doesn't go away just because some people are leafing. So this meant that there was an incentive for companies to come up with ways to keep players staying on the game for longer, to keep them gauged, so they would start to generate new content in order to do that. Now, some mmrpgs would require players to spend a decent chunk of change to access that new material. So World of Warcraft, for example, has had nine major expansion packs released since the game first debuted, and these expansions typically introduce a lot of new content. Sometimes it actually changes existing areas in the game dramatically at times, and this reflects massive story elements that unfold in the world's narrative. These expansions would mean that two different players could have wildly different experiences within the game, Like if one person had purchased and installed an expansion and the other one hadn't, there's going to be a gap in those experiences. But typically these gaps would only kick in at higher character levels in the game that you couldn't even access these new areas until you had reached a certain level, So until that point there wouldn't be a whole lot of difference between the two experiences. However, beyond that, the person who had the expansion would be able to experience areas and content that the other one would not have access to and could not get to. The expansions themselves would cost extra to purchase, so you would have to buy the expansion, and then at that point you just had the normal subscription fee kick in after whatever grace period there might be unless whatever game you're playing switched to a free to play mode, and typically that means that players can access some of the game for free, but then eventually they hit a content paywall that will require a subscription in order for them to access it. I've played a few games where it did this, where you could walk around and then you might find like a gateway, but the gateway itself would be inactive to you because you would have to pay a subscription before or you would be allowed to access it. World of Warcraft actually made this transition to free to play back in last year in twenty twenty three and allowed players to create characters and level them up to level twenty before they hit a paywall, and at that point it's time to part with fifteen dollars per month. Or you can opt to pay for several months in advance, which reduces the cost per month that way. Or you can use something they call game time, where you could just pay for sixty days of access and it doesn't become a recurring subscription. So maybe you've been playing for a while and you dropped off, So then you pay, you know, for game time, you get sixty days access, you play for two months to try and access of some of the content that you hadn't seen already, and then once that time is over, you could just choose to walk away or you know, subscriber, whatever you want to do. In more recent years, we've seen the industry at large put more emphasis on these ongoing revenue generation models. A Grand Theft Auto of five, which sold a mind boggling one hundred ninety five million units since it came out way back in twenty thirteen according to Statistic Anyway, that's a great example, according to game Ramp. According to game Rant, GTA five had a budget of two hundred sixty five million dollars for development. That is insane. In fact, according to the numbers, it was even bigger than the largest budgeted film for twenty thirteen. That film was The Loan Ranger, which bombed, but The Loan Ranger's budget was estimated to be around two hundred and twenty five million dollars. So GTA five cost forty million dollars more in budget than the largest budgeted film of twenty thirteen. That is an incredible number to think about, and then you think, well, making that money back, making a profit, that's really challenging. However, for Rockstar, that investment is paid off because GTA five has made around eight and a half billion dollars billion with a B since it was released in twenty thirteen. And again, that number is just it's so huge as to be unimaginable to me. And a large part of that revenue is thanks to the online component, fittingly called GTA Online. It wasn't ready when the game initially launched, but GTA Online would become an enormous powerhouse for Rockstar in time. Now, the access to the online component is free, or at least it's free on top of whatever fee a gamer might be paying in order to access online services through their respective platforms, because both Xbox and PlayStation have done that right where you have to pay a certain amount in order to be able to tap into the online capabilities of those consoles. There are options to spend real world money in GA Online to unlock in game content. You can choose to just play it for free. You don't have to spend money. You can opt to earn stuff in the game, but it's going to be at a rate that is really slow, slow enough that you might find yourself tempted to spend some real world cash to speed things up a bit, purchasing a so called Shark card with real world money in Jet's virtual cash into your GTA online character's bank account, or as Rockstar has put it, quote cash is king in this town. Solve your money problem and help get what you want across Los Sentos and Blaine County with the occasional purchase of cash packs for Grand Theft Auto Online end quote. But just to cover their butts and to emphasize that maybe you should practice a little restraint, the company also adds, quote spend wisely. Cash therapy is fleeting in the quote, and I guess say I'm impressed with help blatant. Rockstar is on the whole spend money, need to make our game more fun for you messaging. In fact, we'll touch on that more in just a moment, but first let's take a quick break to thank our sponsors. Okay, before the break, we were talking about GTA Online and the incentive that Rockstar has created to convince players to spend real world cash on in game currency. That virtual cash in the game is what gets you access to some of the fanciest toys that are available. That might be a suite headquarters where you can hang out with your buddies. It might be brand new vehicles that you can tool around in. It could be all sorts of different stuff. And you can even purchase a version of GTA Online that's separate from the GTA five game if all you want to do is just play the online component, and that'll save you like twenty bucks in upfront costs at that point. Now, rock Stars being a bit cheeky in its descriptions of this, but I feel the company's messaging is shining a light on one of the real challenges of live service games. At least in the minds of some gamers, and that's making sure that players don't walk away with the feeling that they have to keep paying in order to make a game be fun. Like that's a terrible realization to come to. Right You're playing a game and you're like, well, this isn't fun. I'm not enjoying this, and then you realize, oh, the fun stuff has been locked behind a paywall, so I have to pay money if I want to actually enjoy this experience. There is a very delicate line between providing new experiences and content for players that they feel is worth paying for and holding back on the best stuff of the game unless the players cough of the dough. If players start to feel that they're being milked of cash just because they want to have fun playing a game, they get resentful for really good reason. I mean, games are supposed to be entertaining. That's why they exist. So if you get a feeling that a game is not entertaining unless you keep paying money to the developer, that just feels like you're being exploited and taken advantage of. That's not fun. Rockstar has continued to develop lots of content for GTA online, which means that it's also important for them to continue to generate a stream of revenue because without the revenue, there's no incentive for Rockstar to spend assets to build stuff for the game. You would just have a static world and it would only exist for as long as Rockstar was willing to pay for the maintenance of servers. Right, So you have to have that ongoing revenue stream. And we don't yet have GTA six available to us. It is in development and we've seen some like first looks and stuff, but the general expectation is that we're going to see such a similar approach GTA six that embraces long tail revenue streams. Hopefully they'll be incorporated in a way that doesn't feel like rock Star is trying to exploit its fan base. But without that long tail, there's no reason to spend the ginormous amounts of money needed to build out a game with the scope of GTA. There's no reason to spend two hundred and sixty million dollars making a game because you'd never make that back. So you can argue that if players reject the GTA online model, game studios would have no option but to scale way back on games and cut budgets drastically in order for the business model to make sense. Would that be a bad thing, Not necessarily, but it would mean that the games we would get would be less ambitious in scope, right, We wouldn't have these enormous open world games with incredible depth and detail to them. I think of things like games out of Bethesda where you're looking at Fallout or Elders Roles. These are huge, epic worlds. Whether you enjoy them or not is up to your subjective tastes, but it's undeniable that there's a huge amount of work that goes into them, and those things aren't possible if you can't find these ways to generate long tail revenue for the most part, because who's gonna be able to keep that and make it sustainable. On the flip side, some people would argue, well, games have gotten so large in scope that it's overwhelming and stops being fun, And that's a different conversation. Again, I think it comes down to personal preference. But maybe then you'd say, well, I think it might be a good thing for the video game industry to kind of check itself a bit and take a step back and perhaps not tackle these ever growing projects that get increasingly more complicated and expensive. That's the real rub of it. Even for teams that just want to build a single player experience, to do that on a triple A scale requires a level of investment. It's just plain hard to profit from if it's just a single purchase model. If all you're doing is making an incredibly rich, detailed, enormous first single player game and then releasing it and just selling the one copy and that's it, you would need to sell so many copies of that game to return something to that level of investment that it's a huge risk. Ongoing revenue streams, either from subscriptions or micro transactions or whatever, are way more attractive. The good developers will build that into their plans for a steady stream of new content adding value to what hopefully is already a good game. Bad developers will hope they can ring as much cash out from players as they can before the gig is up and you know, everyone calls them out on their BS. Many live service games have adopted a seasonal structure for their content. Games like Sea of Thieves, Fortnite, Fall Guys Deep, brought Galactic Dead by daylight. Tons of games use a seasonal model. Some of these games introduce new content during a season with the promise that once the season is over, players will no longer be able to acquire the stuff that had been introduced. And this creates a sense that if you allow your subscription to lapse or you don't pay up to access this new season, you're going to be missing out and you won't ever be able to get whatever stuff was introduced at that time. So the fomo that fear of missing out is strong with seasonal approaches. Now, let's talk about another specific subset of micro transactions and games. This is one that has drawn criticism and scrutiny from regulators around the world, and that would be lootboxes. Some games let players buy in game items directly. Right, maybe you have your eye on a particular outfit in a game and you think that looks really snazzy. I really want to have my character wearing this outfit, and maybe the game allows you to actually PLoP down real world dollars or whatever currency you are working in so that your in game character can look amazing. That's great. You know the people who want to do that can do that, and everyone else can just move along. But what if instead you can only spend money for the chance of getting that outfit, and there's no guarantee that that's what you're going to get. That's what loot boxes represent. They are in game items that represent a random or pseudo random bit of content. So players spend real world money not on a specific thing, but on the equivalent of a pull on a slot machine. So if the player is incredibly lucky, the loot box will reveal that they've been awarded the very thing that the player wanted, but the odds are not very good. You could argue this whole model is heavily inspired by gambling, particularly on stuff like slot machines. So why do folks play slot machines. They play because the machines represent the possibility of a payout, and a lot of machines are designed so that they display near misses right like, it's not just a clear miss, though that can be shown too, but you're so close it almost lined up, and if it had lined up, you would have gotten a big payout. That creates this feeling that you almost succeeded and that you just need to stick with it a little bit longer. And then you're going to be rolling in the dough. It's all in an effort to encourage more gambling. Despite the token warnings and some casinos about the dangers of gambling addiction, loot boxes arguably do something very similar. They tempt players with the prospect of awarding rare in game items, whether those items are purely cosmetic or maybe they have some in game effect, and that has gotten companies into trouble. Various lawsuits around the world have been built around an argument that loot boxes are, at their heart, a kind of gambling. However, one thing that has remained a sticking point is that, unlike gambling, the stuff that comes out of loot boxes typically cannot be converted back into real world dollars, so that has defeated the gambling argument in a lot of court cases. That's an important distinction, right. If you go to play a poker game, for example, you may first have to convert your money into chips, and then you play your game. Let's say you're up, you're down, whatever it is. At the end of your time playing, you take whatever chips you have and you convert them back into money. But with loot boxes, you don't get to do that, you convert your money into loot boxes, or you convert your money into some in game currency that you then spend on loot boxes. Then you open the loot boxes and you end up with whatever the rewards are, but you can't change those back into real world dollars, at least not for most games. Now. I say most games because there have been lots of games that have allowed players to trade items in game between one another, where you can give it as a gift or you can trade for something else. And in those types of games, time and again we've seen markets spring up, player run markets in which players are offering to give away items in return for real money. But in those cases, you could argue this is really just more of a black market situation. The game itself is not responsible for creating those markets. It's arguably just inspiring it to happen. Many of the loop box court cases essentially have boiled down to saying that loop boxes are not technically gambling. But there's plenty of work published out there that points out how video games are relying on the same incentives as you would encounter in games of chance. I already mentioned the near miss thing with slot machines. Well, slot machines also will give much smaller payouts, sometimes small enough where it's not even covering however much money you've been spending as you're playing, and that this also helps encourage people play longer and to lose more money. Well, video games can also give out smaller payouts to convince you that, oh, you almost got the thing you wanted. You did get something. It's much lower in your esteem than whatever it is you're after, but at least it's something. And there are all these little feedback methods that games rely on in order to keep their players active in the game and hopefully spending more money to achieve some specific task. So I think it's legit to argue that the games are using somewhat predatory strategies in order to maximize revenue, even if the end result isn't gambling from a legal sense. It's just, you know, it's not against the law to get people hooked on playing a game that's not illegal. So that's the big loophole there. Now, there is one massive drawback to all the online stuff that we do need to talk about, But before we get to that, we're going to take another quick break to thank our sponsors. Will be right back all right. Before that break, I alluded to the fact that there is a huge disadvantage to these online components, and that is that there can come a time when a game company, for whatever reason, withdraws support for the game and operating game service. You know, like I said, it requires ongoing investment. You have to do maintenance and repair, You have to pay electrical bills if nothing else. So even just keeping an online game going requires a company to pour money into it. So it should come as no surprise that sometimes companies will shut stuff down if the money coming in is less than the money going out. That's what you got to do in order to keep your business afloat right. And also there are times where companies just go out of business. You know, maybe they went bankrupt, maybe they got a quiet. All of these things can affect whether or not a game will continue to get ongoing support. The list of abandoned games online games is pretty long, and of course it will just get longer. They include a lot of MMORPGs, you know, games like City of Heroes or Asheron's Call or Jade Dynasty, among with like dozens of others have had their day in the proverbial sun, only to subsequently fade from view now. Sometimes the communities for these games will keep things running with fan run servers. I mean City of Heroes has some of those where there's community servers out there that you can still play on. But other times the game just goes away and it means that you've got a game in your collection that you paid money for that you could no longer play because there's no longer a server supporting it. Sometimes the problem actually has to do with things like licensing fees. Right Like, if a game has been made that draws upon an establish IP, typically that sort of thing is done for a set amount of time and that is determined by a licensing agreement. Like a company might secure a license for a popular IP I'm just gonna name a random one. Let's say it's Batman, and the agreement allows the company to run this game for five years before the licensing agreement expires. Well, when that agreement does reach the end of its life cycle, that means that the game company either needs to pay to renew that license or it will have to end support for the game. And if a game again is not driving enough revenue, you can bet the company would go with option number two for games that require an always on DRM connection. That is another huge hassle, right because if someone buys a copy of the game, they typically expect to be able to play that anytime they want from that point forward. They bought it, so they should be able to play it. However, if the game they bought requires a connection to a DRM server and the game company goes away or those servers are shut down and they don't send out some sort of update that removes that DRM, that means the gamer is pretty much faced with two options. I either find a cracked copy of the game that has had the DRM stripped out of it so they can just keep playing, or they never play the game again because there are no verification servers out there and so the game won't launch. A couple of games have really frustrated players with DRM server shutdowns, such as Three Switched and dark Spot. Both of those games had always on DRM, and both of those games had those servers shut down, which made the games inert and it meant the only way you could play them was to get cracked versions of those games. So again, this DRM really is inspiring piracy more than dissuading pirates. But obviously the games that exist solely as online experiences are affected by server shutdowns, and that's It's like the same thing as saying you have one copy of the game, it's stored on your computer's hard drive, and your hard drive dies, well, like imagine that, but it's for an online server and the entire instance is dead. Sometimes again, communities will keep things going all in an effort to keep a game alive past it shutdown date. Other times you will hear about players who will gather online when a game is coming to an end, kind of like they're there to observe the end of the world, like it's an apocalyptic film or something. There are videos online of players congregating on various online worlds just as those online worlds were getting switched off for the last time. There are other really big issues in the video game industry these days, apart from the ones I'm talking about, Like one big one is the push to get games released as quickly as they can be. Gamers are notoriously bad at dealing with delayed gratification. That's part of why there's this rush among some gamers to jump into earth. The access for games or for beta testing, and so video game companies are often under a ton of pressure to get games out the door, even if those games are not fully baked yet, and a lot of that pressure doesn't necessarily just come from gamers, but from higher up on the food chain in the games industry, like there might be parent companies that want numbers on spreadsheets to look real good in time for an earnings call, and they might put the pressure to get a game out the door even if it's not fully ready yet. So lots of times games go live while they still need a lot of TLC. And it's become pretty common in the video game world to release a title and then require players to also download a massive patch early on to fix issues with the game, and a lot of games will release patches in the months that follow the released in order to address various bugs. Now, to be fair, we were talking earlier about the size and scope of massive like Triple A games. These days, when you get to that size, there's just no way for you to test everything thoroughly with all all the different possible variations that will happen once a game goes gold, assuming that game is popular, right, you can only test so many things. But in the real world people will try all sorts of stuff that you never even thought of, and some of that's going to break the game. So it's really only when the game is out in the real world and players are putting it through its paces that you find where the pain points are. And you should expect patches to follow the release of larger games, but yet it's still something of a joke in the game's world that anytime a game comes out these days, it does so with an enormous patch required on day one. But this is the world of big games. That's how things are now. And of course there are still smaller games out there, you know, games that don't necessarily require persistent online connections or have micro transactions or seasons of content or any of that stuff. But the studios that make these games are often these smaller, independent studios that are in the sights of the bigger players in the space. As those bigger companies gobble up the studios left and right, so your Microsoft's send your ten cents and your Embracer groups. They go out there and they acquire these smaller companies, and sometimes these are the same companies that get shut down later on by these bigger fish like you know, Arcane Austin and Tango Game Works and those sorts of studios. There are ways to do live service games correctly. There are ways that you can do it where it doesn't seem to withhold the best content in return for you know, someone paying a ransom to the developer to get access to it. There are ways that encourage players to enjoy a game on their own terms, which can include spending a bit more after initial purchase if the players want to. I've played a few games myself where I've chosen to purchase stuff in game because the title I was playing was free to play, or or I had been playing it for years and I was really enjoying it, and I wanted to continue to support something that I really liked because that's the way I get more stuff that I like. Plus, I mean, some of those exclusive outfits get real snazzy. But obviously there are lots of ways to do it poorly. And I think that's the big issue we're seeing right now in the video games industry is that there are a lot of companies that seem to be pretty eager to throw in as many of these abilities to generate revenue down the line of a games lifespan as is possible without regard to how that actually impacts the playing experience or gamers' perceptions of the game. There have been a lot of games that have come out recently that have had some hefty criticism thrown their way. For this, one that just recently springs to mind is the Suicide Squad Kills the Justice League game. That one has received a lot of criticism recently for many reasons, not just the live service aspects of the game, but that has been part of that conversation. So yeah, I don't think live service is going away. I don't think games as a service is really going away. I think you will still find independent game developers who create really interesting and fun and entertaining games out there that lack a lot of the stuff because they're not working at that same scale. But I think just the nature of the truly enormous games, the really deep, huge games of scope, that kind of necessitates this long tail revenue approach. Otherwise there's no reason to do it because you'll never make your money back. You'll spend way more developing than you'll get from sales. So again I think It's understandable, but there is, in my opinion, a right way and a wrong way to go about doing it. I hope you enjoyed this pair of episodes. I hope you are all well, and I'll talk to you again really soon. Tech Stuff is an iHeartRadio production. For more podcasts from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or wherever you listen to your favorite shows.

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