Out of GaaS

“As a service” business models have become all the rage in recent years. If you haven’t heard of “as a service” as a business term before or don’t know what it means, I’ll give you a quick explanation. In general, most things you spend money on were finite products: you pay to McDonald’s $5 and get a cheeseburger value meal or you pay Best Buy $20 and get a DVD. As the great Homer Simpson once thought: “Money can be exchanged for goods and services!” And a lot of what you buy is the “goods” portion of that. The “services,” up until recent years, have mostly been things like mechanics, or hair stylists. You go to a professional who can do something you can’t, you give them money, and then they perform the service – you get your car fixed, or your hair cut, or whatever it is you want done.

The XaaS (X as a Service) model’s earliest prototype origins (that I can think of off the top of my head as I write this) are probably cable television. You can buy a regular antenna and get the regular, broadcast television. But if you pay a special, monthly cost to a cable company they’ll come in and give you the magic cable box with hundreds of channels you can choose from! A key component of the XaaS model is that you’re continually paying for access to whatever service it is you’re getting, and more importantly if you stop paying, you lose access to the service.

But that’s not all that XaaS models entail. If you plunk down a monthly fee and then get stuff, you could also just call that a typical subscription. Magazines (remember them?) weren’t an XaaS model because you paid for a yearly subscription and got a magazine every month…but that was it. You were just paying a reduced cost for a product you got once a month. XaaS models involve continually updating and changing things within the service. To go back to the cable subscription model – it was a proto-XaaS because the cable company might add or subtract channels to its package. When HD rolled around, cable companies started adding HD channels to the mix as well.

With the advent of the internet, more XaaS models became feasible. Software as a Service is probably the most popular XaaS model. For a monthly fee you can pay for cloud storage access (Amazon Prime or Google Drive or a multitude of other storage options). You can pay for an OS that continually updates (although that is usually a flat fee) or anti-virus software to protect your computer. There’s also Content as a Service: we have Netflix that continually updates with new content, or Blue Apron which provides meals on a weekly basis based on your feedback, or Spotify which gives you access to all sorts of music whenever you want. But as soon as you stop paying all that access goes away.

The key point of this business model is that companies are realizing that the products themselves are not the only way people will spend money. They can charge people continuously for services that people want simply because ease of access is a commodity nowadays. Why spend an hour at the grocery store planning your meals for the week when you can pay a similar amount of money and get the ingredients delivered? Why buy and own your own copies of movies when they take up space, and you could have a larger library for a simple monthly fee that costs way less? It’s a valid business model that has become viable largely thanks to the fast speed of modern internet – enabling two-way communication at the drop of a hat between everyone (but especially companies and their targeted consumers). After all, Netflix started as a DVD rental company that offered physical DVDs delivered to your door as a service – it was only after streaming became a thing that they truly became the giant they are now.

So this brings me to the point of this article/blog post: “Games as a Service.” Video games are a relatively new media in the grand scheme of things. And much like everything else, the internet has truly changed the face of gaming. Twenty years ago when you bought a game, that’s what you got. There weren’t any add-ons, there weren’t any patches or updates or downloadable content. You got a cartridge or a disc with a game on it, and that’s all there was – warts and all. But now, with the internet, it allows developers to be constantly updating their games: fixing bugs, adding content, smoothing over graphics. As such, it’s natural that the developers would gravitate towards the “GaaS” model.

But of course there’s a catch.

Now, there are two ways that people have been using GaaS as a term. The first is simply the Netflix of gaming – where you pay a monthly fee and have access to a library of games that you can play from the cloud at any time. This, in general, is fine. Companies like Gamefly are doing it successfully, and Sony has launched PSNow which enables you to play a finite library of Playstation games via access to the cloud. Whether or not this is worth the price tag they put on it is debatable, but in general this is no different than other XaaS models.

The nasty, predatory second way that developers are using GaaS is they’re twisting it to mean that each, individual game is its own service. And that’s awful. Most games developed by the large developers are sold for a standard price tag of $60. And while most games eventually go on sale for less, you’ll likely be paying a flat fee of somewhere between $20 and $60 for access to the game itself. And when you buy the game you’re also buying “service” from the developers – meaning the aforementioned continual patches and bug fixes to support the game well after its been released.

But the base price isn’t enough to cover rising development costs in the game industry (or so developers say) so on top of that, the big name companies of the video game industry are adding more costs within the game itself. And some of these “services” are gated off. You have to pay another $20 to get the new multiplayer maps, or the new bonus single-player content, or the neat skins that make your character look like a cute kitty-kat. Cribbed from the mobile games (where you can buy a game for free, but small “microtransactions” for $.99 can give you an edge or unlock more content) this is where developers are making all their money.

Because in the video game industry, developers are all about mind share. Video games take up an extraordinary amount of time – a single-player game is usually considered a decent length if it takes 15-20 hours to complete. Most single player games aim to keep their player engaged for 30-40 hours. A long game can take 80-100 hours to see from start to finish. You could binge watch 5 seasons of a show on Netflix in that length of time – which is why developers fight so hard for the mind share of video game consumers. They want you to be playing their game and ONLY their game, they want your money to go to them – that is, until their next game comes out.

And that’s where the GaaS model starts to fall apart for both the developer and the consumer. I said that developer cribbed their tactics from mobile games and they learned all the wrong lessons from it. You see, mobile games like Candy Crush or Mobile Warfare or whatever is hot right now are usually free or at most like $2-$5. A very low, simple asking price (to the point that many typical users will even dismiss cell phone games that actually cost money on the outset). But how do they stay in business and make a profit? Why, by designing the game in a way that incentivizes spending money once you’ve actually got the game.

An addictive game loop is presented – you complete a level, and then the game says you have to wait 2 hours until you can play again because you used up all the fictional credit. OR you can pay $.99 to get more credits and play RIGHT NOW. Or maybe to get to the next level, you’ve got to grind out 1000 crystals. And you can maybe get 100 crystals in 15 minutes of playing. So in two and a half hours of playtime you could get to the next level, OR you could pay $2.99 and get 1000 crystals RIGHT NOW. Which you do, and then you find out to get to the next level after that, you need 2000 crystals! But it’s okay, because for a limited time you can get 50000 Crystals for only $12.99!

Most mobile games aren’t designed to be “games” – they’re designed to be addictive loops that eventually get monotonous. And for 95% of the population, once it gets monotonous or too hard, they stop playing. But for 5% of the population they’ll spend the money to keep that addictive loop going. And what big companies have learned is that they can put that design philosophy into games that people are paying $60 for already and make even more money.

For example, there was a very recent controversy involving the about-to-release Battlefront II from Electronic Arts. In the multiplayer version of the game, two of Star Wars’ most iconic characters (Luke Skywalker and Darth Vader) were locked from being playable until the player had earned 60,000 credits. People did the math after playing the beta/early access, and earning credits playing at a normal rate, you’d earn 60k after around 40 hours of gameplay. And that’s one character. That’s right, if you bought a Star Wars multiplayer game for $60 and wanted to play as Luke or Darth Vader, you’d have to play the game for a combined 80 hours before you could select both of them. And there are MORE unlockable characters besides them! That’s insane.

Or, of course, you could just dish out the actual cash that is the equivalent of 60k ingame credits and get them immediately. Which do you think EA wanted you to do with this game design? Preferably, spend money on credits. But either way they win. Either you’ve devoted your time to their game for 80+ hours, OR you’ve given them a ton of money.

Now there was MASSIVE backlash to this move, and at the time of writing this EA had released a statement that they’d reduced the cost of unlocking characters like Luke and Vader by 75%. But that’s still 10 hours of playtime before you get to play as one of them, and 20 hours of playtime before you play as the other. I’m an avid gamer – I play way more video games than most everyone I know and consider it my main hobby, and I could maybe play 20 hours in a week and get both characters. What about people who only view gaming as a side venture that they put maybe an hour or two in a week? You can bet there’s still going to be some impatient people who just want to play as Luke who are still going to plop down money.

Right now game developers are trying to have their cake and eat it too. They’re trying to tout “Games as a Service” – a model where we, the consumers, give them money and in return we get this nebulous ‘service’ they’re peddling us. Except the service is actually just a veiled way for the developers to make more money off of us. They act like they’re giving us a “service” by constantly updating and patching the game, but they’re still gating meaningful content behind more money and the base game design philosophy is being altered from “making an enjoyable game” to “making an addictive loop that makes us more money.” It’s very blatant with Battlefront II – after all, the change on how many credits it would take to unlock Luke and Vader happened around 24 hours of the initial complaint being registered. They were able to, right before a game released, change the addictive loop to a more palatable time amount. Since there was nothing complex about it, they knew going in what they were doing when they created the locked characters in the first place.

Let’s look at another example – this one being a comparative one. Two South Park games released recently – the first, South Park: The Fractured But Whole is a standard RPG for consoles/PC. Like most big games released, it cost $60. There are no microtransactions within the game itself; however, a season pass is available for $20 that will add more content to the game in the upcoming months. The game itself is designed fine as an RPG. At no point did I feel frustrated or like I had to grind. I was able to complete the game while feeling challenged and having fun. I may spend $20 on the extra content if I feel the content is worth it, but I do not feel like I’m missing anything by not having it. All in all, The Fractured But Whole shipped as a complete package and there was nothing objectionable about the game design itself (unless you don’t like fart jokes).

The second game released was South Park: Phone Destroyer, which is a mobile game available for free on the App Store right now. Unlike The Fractured But Whole, this game’s design revolves around microtransactions (and a warning when you first boot up the game, in parody of the show’s warning, says it involves microtransactions and thus is unsuitable to be played by anyone). The game’s basic premise is you have cards that you can play in a real-time strategy manner. These cards turn into characters from the show who will fight for you. You clear levels and by collecting duplicates of cards you can upgrade your characters to become more powerful.

This is all fine and dandy, except the characters are sorted by rarity like a collectible card game. There are common, rare, epic, and legendary cards. So to upgrade your rare and epic cards, you’re going to need a lot more card packs. Now, you can get a free card pack every four hours, but there’s no guarantee to get the “good stuff” in them. However, what you can do is pour actual money into the game and buy booster card packs with guaranteed epics and legendaries in them. So the game is already subconsciously trying to get you to spend money in that (so much that during the tutorial, you are directed to the “money-only” shop and get a free “premium” booster pack to show you just how easy it is to get rarer cards).

But the game design itself is also inherently geared towards getting players to spend real money. Each level you beat has “good loot” drops, but you aren’t even guaranteed the loot it says – after you beat a level, you get to open 3 out of 10 lockers, and the 3 “good loots” are interspersed among other not-so-great loot and there’s a good chance you don’t end up with any of it. But you can open more lockers per level if you want to pony up the cash! And on top of that, three times so far in playing I’ve been gated from progressing in the single-player mode until I play the PVP (Player vs Player) mode until I beat enough other, real people to advance. What happens if you want to keep playing but aren’t powerful enough to beat other players yet? Grind on old levels, or maybe just pay some real cash to get better cards so you can wallop the competition?

And these are just ways the game is designed. This doesn’t take into account the inherent addictive nature of collectible card games to completionists, or people who just like South Park and want to get all the characters. Phone Destroyer is a game that is from its core designed to be a constant money generator compared to The Fractured But Whole, that is a game designed to be a game.

GaaS can be a good thing. Overwatch, a game I enjoy thoroughly and have put more hours into than I’d like to admit, is an alright example of GaaS. The game itself has a flat base price, but all meaningful content (and any added later) is free – namely characters, maps, modes, and events – all of it is free to access after the base price. But you can buy boxes for cosmetics for all the characters if you wish, but they are also all earnable through gameplay. And while I have my own thoughts on loot boxes in general (which I’ll save for another article), they are providing a “service” – continually updating the game through patches to keep the player base involved. Contrast to Battlefront II, where characters are locked behind in-game currency and you can actually earn better weapons through said currency as well – but you can spend real money to get more of that currency faster. How is that a “service” and not just extortion?

Game developers are taking advantage of their consumers right now and wrapping it up in “service” terminology to make them sound less evil. It’s important as a consumer to punish bad business models and reward good ones. It’s why people are more likely to pony up money for Netflix (loads of movies and original content) vs. say CBS All Access (CBS shows and Star Trek, I guess?). It’s why people are less and less likely to actually pay for cable anymore when they can instead keep up with TV through Hulu or some other means. The important lesson for consumers in the game industry to learn is be aware of when games are trying to rip you off and don’t fall for their machinations.

So really, this has been a giant article to say don’t buy Battlefront II. I know, it’s Star Wars and exciting, but don’t do it. You’re supporting awful business practices.