Paradigm Change: Microtransactions

Microtransactions have been a big part of the gaming industry over the last few years. They can come in all shapes and sizes, from the most common cosmetic effects, such as skins for your characters, all sorts of accessories and housing if that’s something on the game, all the way to the often controversial pay-to-win - or pay-to-fast - transactions. It is a business model that not only offers revenue to sustain free-to-play game developers, but is also used on huge titles from AAA companies, and all combinations in between.

The point of this text is not to discuss whether or not microtransactions should be a thing in gaming, if they should be used only in ways that do not interfere with gaming mechanics, which companies should use them, nor the particularities in legislation and the fact that some countries have banned certain types of microtransactions. All that is intended is to provide some context and certain ideas and stay open to the possibility and thoughts brought by those reading it, after all, a paradigm change rarely, if ever, happens with a single person's point of view.

Valve and Epic: Battle Pass Perspectives on DOTA 2 and Fortnite

It's almost impossible to discuss business models in gaming without talking about the great behemoth casting its dark shadow over us all. And then there's Valve on top of it. Jokes aside, Gaben Newell's company did something remarkable almost two decades ago when Steam was released. The way Steam was able to bring together developers and players, creating opportunities for new games to be discovered and almost extinguishing physical media for PC games was something else. For years Valve reigned alone, and indie developers or massive companies had to follow their will to sell their games, or else.

Of course, some tried to create other solutions and substitutes for Steam, but it wasn't until 15 years later, in December 2018, that a real alternative appeared when Epic Games released its Epic Store. Let's not talk numbers right now, it's a fact that Steam is still way bigger and holds a huge amount of games titles more than Epic, but for the first time, some developers have an alternative, with Epic's better rates in sales and even more than that when studios used their proprietary gaming engine, Unreal.

The fact that these two companies have a Store Side and Game Development Side, makes them, in my opinion, perfect for observing small decision changes that impact their community. That takes me to two of the crown jewels of these companies: Valve's DOTA 2 and Epic Games' Fortnite.

It's important to observe that the two games have hugely different demographics, mechanics, and universes. For that reason, I will not talk about Epic's borderline magic abilities to create skins in partnership with any company and/or personality. The focus will be on the differences and similarities between the companies' Battle Passes, and just a bit on their general cosmetics store.

Fortnite: Seasonal Battle Pass

Fortnite's Battle Pass was reworked in Chapter 2: Season 7 (June, 2021-September, 2021), and since then, it follows this formula: 100 levels, divided into 10 pages, each with 10 rewards. After the 100 levels, there are 100 more levels where players can get Bonuses Rewards, usually alternate styles for already owned skins. Check below:

Seasons on Fortnite usually last around 3 months, with some lasting slightly less or more. They are wrapped around the lore of Fortnite and have quests that earn players experience points (XP). There are all kinds of quests, some explore the lore of the game, others are "daily" or "weekly" quests that are just mechanical stuff players have to do in their matches.

All levels need the same amount of XP, players can buy levels in order to get their rewards faster if they so want, but it's important to note that playing Fortnite and doing the quests daily for around 30min to 1 hour and a half, during the season, will surely get you all the rewards from the Battle Pass and likely a lot, if not all, of the Bonuses as well. Trust me, I'm not even good at the game.

In April 2022, sportskeeda published an article showing how much would be needed to get all the rewards of the Battle Pass in Fortnite. Since each level costs around 150 V-Bucks (Fortnite Currency), in order to get all 100 levels one would need to get 14,850 V-Bucks, since after purchasing the Battle Pass, for 950 V-Bucks, you already unlock level 1. Considering the rates of the currency, one would spend close to $100 to get all the rewards. If you add the 100 levels from the Bonuses Rewards, it goes up to around $200.

DOTA 2: The International Battle Pass

Dota's Battle Pass, formerly known as The International Compendium, was released for the first time in 2013 as a way to reward players and members of the community and also increase the prize pool of The International (TI), basically Dota's World Cup and also the highest paying esports event in the world. This collaborative way of increasing the prize pool for TI was a huge success, with prizes going from $1,600,000 on the first edition to a whopping $40,018,195 last year alone.

One can figure then that Battle Pass in DOTA was a huge deal. It was released once a year, with all sorts of quests, special game modes, cosmetics, skins, special effects, etc. While at some point most of the rewards were already completed, if players kept leveling up their Battle Pass, they would get some unique rewards on the highest of levels, such as even a real miniature of the Aegis of Champions - TI's trophy.

The release of the Compendium was that big moment when players felt that not only they were participating in the game they loved so much, but they also were rewarded because of it. The first three Compendiums were not based on levels; instead, they were focused on goals for the International Prize Pool. Only the first one didn't reach all the goals, the other two did it with ease, and the last one went 3.5 million dollars more than the highest tier Valve created.

From 2016 onward, the Compendium became the Battle Pass, focusing on levels that rewarded the players with all sorts of rare/unique skins that would, for the most part, only be available then. Some could be traded or gifted later, but would never be in the game store. It was an interesting change, that felt welcomed by the community for the most part. Battle Passes had more than 2000 levels, but the biggest rewards were around level 200~300, and going beyond that were special cosmetic effects that would vanish after a time period.

At some point though, around 2019, Valve decided that Arcanas - DOTA's most sought skins that completely change the hero's model, voice, and skins - would be released on the Battle Pass as well, and if one couldn't get them at that point it would never be able to. As if that was not problematic enough, the huge bummer for DOTA's community was the fact that it was virtually impossible to get the Arcana on the Battle Pass without paying for it with real money. The number of levels one could get without it, only playing the game, would never be enough.

Before that, the next hero to receive an Arcana was voted by the community on the Compendium and the prized skin would come later at the game store, for everyone to purchase at any time, for the standard price of $34.99. With this 'update' on their decision-making, Arcanas would be prized around level 330 of the Battle Pass, but not spending money players could get only around 111 levels. This number is not precise though, because there was a random reward that could get players from a quarter of a level up to 10 levels in one go, so if you're lucky enough...

The values to get the Arcanas on the last two Battle Passes, which were in fact Seasonal, not contributing to The International prize pool or any other improvement to the pro scene, were quite similar to Fortnite's price to get all the rewards, around $75 to $150, depending on if the player wants to get the prize right away or get the max number of levels for free before spending their money.

Do game characters dream of virtual clothing?

I hope readers are still with me after this not-so-small exposure. My point from here on out, is to bring some facts and some conjectures, that I hope are good enough ideas that can make the microtransaction market a bit fairer with its real users, the gamers.

A big element of both Fortnite and DOTA's Battle Pass is FOMO (Fear Of Missing Out), since players are aware that the only chance they will have to get some skins is "now", they go crazy in order to obtain the skins they want. I'm not personally a big fan of this model, but I can for sure claim that it works, my wallet is a sad witness of it, and I would bet an Arcana that some readers have suffered with it as well.

It's important to note that there's a big difference, at this point in time, between Steam and Epic, and that is Steam's Community Market. For those uninitiated, the Community Market is where Steam users can sell their skins to other users for "real money". It's indeed real money, but you can only use it on the Steam Store, and more than that, every and each transaction on the Market has a fee that Valve takes.

It's not possible to trade, sell, or gift Fortnite skins that you already own (it is possible to gift to a friend skins that are on the game store). But in DOTA there's a whole economy that occurs in the Community Market and even on third-party sites where people trade their skins for real money outside of Steam, a practice that is not permitted but it's highly overlooked.

But maybe another strategy could work out in order for these huge companies still earn obscene amounts of money. And that is blockchain. Epic and Steam have their own perspective on blockchain gaming at this moment, Valve is seemingly against it on their platform (though Mir4 is still there), and Epic claims to welcome games on their store, but not a single one is there yet.

Blockchain Gaming

Play-to-Earn games, built on the blockchain, have a strong claim: to give ownership of game resources back to their players. That is a double-edged blade since many started to see them as investments instead of games, but that is something I would prefer to get in-depth in another article, what should be noted here is that just like cryptocurrencies, P2E games are going downhill in their value and players recently.

Even though DappRadar Report shows that the activity in this first quarter of the year has grown 2000% compared with last year, and investments are still happening, one can notice that few are the projects that are capable of keeping their players for more than a few months.

This is not to say that they will all fail, that the projects are not interesting, and that the games aren't fun. The point is that if all projects are following more or less the same model, then maybe they should start to think differently. Blockchain is not a "new" technology, but it is new in regard to its presence in day-to-day life. Like all new technologies, it takes a while to learn what are the best applications to it, most of the time the first idea is not the best idea.

The Titan's Embrace

But what if companies like Valve and Epic, instead of rejecting or welcoming this new technology, embrace it? What if, for instance, Valve develops its blockchain, transforming game skins in NFTs? They don't need to do this with ALL their skins, they can do this for the ones with limited marketability, special ones, as the P2E game Blankos do.

The implications of such a decision, at a first glance, could be that of players feeling to have real ownership of their stuff, knowing that if at some point they need to leave their gaming community, all the investment they did would not be lost unless they went after shady marketplaces that negotiate accounts.

Another point is that players will continue to be aware of skins scarcity. These big companies would still be able to use the FOMO strategy, skins will only be available during their Battle Passes period, the number will not get any higher after that time, so it's as exclusive as before, but people will be able to sell it if they want to.

For Valve this would mean staying a pioneer in the game industry, being the bastion they so much like to be, and showing how to use blockchain in gaming legitimately. They would also be able to continue to get its chunk out of transactions by applying as many gas fees as they wanted to.

For Epic Games this would mean opening up a new universe of possibilities for their already immense skin portfolio on Fortnite. They would not only keep producing their skins, but be able to show other developers that they really stand by their claims of supporting blockchain games, and will continue to earn from skins of past Battle Passes as they are traded on their chain.

I would love to see a game like those portrayed on Korean Webtoons, where the game currency can easily become real-world money and people can decide if they want to work as an IT tech or as a blacksmith in a VR game. I know that I would craft the best items around. But maybe it's not the time to put finances and games together, maybe we should address certain social issues in the physical world first.

Regardless of that, I believe that "simply" mixing successful, well-known, current games from great industries, not intending on transforming them into an investment but simply by giving players the awareness that their money is respected and they are purchasing a real asset, could be the first step into P2E right now and rebranding NFTs as something useful and good, not a scam.