Share This Post

Games / Geek Corner

Gamers Are Overreacting To Lootboxes, Publishers Should Raise Prices?

Gamers Are Overreacting To Lootboxes, Publishers Should Raise Prices?

While the entire gamer community is rallying against lootboxes and predatory practices in the industry, one Wall Street analyst seems to think differently.

Evan Wingren, an analyst at KeyBlanc Capital Markets said in a report to his clients that gamers had taken the EA’s poor handling of microtransactions as a rallying point to protest against all of microtransactions in the industry. He said that gamers were not being overcharged for games, instead paying a lot less than the games should actually cost.

“We view the negative reaction to Star Wars Battlefront 2 (and industry trading sympathy) as an opportunity to add to Electronic Arts, Take-Two, and Activision Blizzard positions. The handling of the SWBF2 launch by EA has been poor; despite this, we view the suspension of MTX [micro-transactions] in the near term as a transitory risk. Gamers aren’t overcharged, they’re undercharged (and we’re gamers). … This saga has been a perfect storm for overreaction as it involves EA, Star Wars, reddit, and certain purist gaming journalists/outlets who dislike MTX,”

He then went on to make a comparative breakdown of video game prices to that of television and movies, and came up with the following analogy.

He said if a gamer spent $60 for the game, an additional $20 per month for loot micro-transaction boxes and played around 2.5 hours a day for one year, it comes out to roughly 40 cents per hour of entertainment. This compares to an estimated 60 cents to 65 cents per hour for pay television, 80 cents per hour for a movie rental and more than $3 per hour for a movie watched in a theater, according to the firm’s analysis.

“If you take a step back and look at the data, an hour of video game content is still one of the cheapest forms of entertainment,” Wingren wrote. “Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive rate, and should probably raise prices.”

The problem with his analysis is that most gamers don’t play the same game for over a month. Also, most consumers already feel that the cost of television and movies are already too high. This analysis seems to be coming from someone more worried about big companies losing money, instead of focusing on what’s best for the consumer.

Register with us for the best in gaming, and join us for video game discussions on our forums.

Share This Post

To know absolutely nothing about me, follow me on Twitter and Facebook. I do nothing there. It's also a good way to keep your news feed clean. I will post no updates.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Lost Password