So over the past week the big story has been the massive backlash against EA for the loot box mechanics on Star Wars: Battlefront II. According to some very conservative estimates, it would take 40 hours of continuous play to unlock Darth Vader as a playable character. This is assuming you save every single point of in-game currency and don’t spend any of them on other things. Then you’d need another 40 hours to unlock Luke Skywalker. Even if you’re just going to save up for a simple loot box, it will take three hours of play.

This is a much slower system of progression than we see in other games, while at the same time the things you’re trying to earn are more substantial than the usual things like cosmetics. It rubbed people pretty raw that they might buy a $60 game and have to grind for a solid week (or pay an additional $20) just to unlock their favorite character.

EA tried to explain or justify the policy on Reddit:

"a sense of pride and accomplishment"

This resulted in the most downvoted comment in the history of Reddit. The previous record was a comment with something in the neighborhood of 23k downvotes. This one got over 600k, smashing the old record by an order of magnitude. You can’t dismiss this as a vocal minority on Reddit, either. In the UK, physical sales of Battlefront II are down 60% compared to the previous entry in the series. We can’t prove that worldwide sales are down by the same ammount, although I can’t think of why sales would ONLY be down in the UK. Either way, it’s certainly troubling.

The controversy burned for a few days and was even picked up by major mainstream news outlets. Perhaps in response to this, EA disabled all microtransactions within the game. (For now.) Polygon suggested that this was in response to pressure from Disney, who perhaps don’t appreciate EA tarnishing their brand after the two entered into an exclusive deal a few years ago. While that article sounds plausible, it’s just conjecture. The reversal could also be due to low sales, or concerns that shareholders were getting nervous due to the negative press.

So that’s where the story stands now. EA is in the doghouse, sales are down, microtransaction loot boxes are disabled, and the community doesn’t know if EA is going to give them what they want (something fun) or just wait for the heat to die down and re-enable the system with some minor tweaks.

People are celebrating this as a victory, but I don’t see much to cheer about. EA is still run by a defective corporate culture, which means all of the uninformed people that made this happen will be making decisions down the road. It’s not a victory until there’s a serious shakeup inside the EA leadership, and I don’t think this controversy is big enough to make that happen.

Greed is not the Problem

I'm not going to purchase Battlefield II, so instead of screenshots you get memes.

Everyone is dumping on EA for their “greed”, but as I’ve said in the past, greed is not EA’s problem. Their problem is that they don’t know or understand their customers or their gaming habits, which means the EA leadership has no frame of reference when trying to figure out if the public will like a particular idea of policy.

Back in 1991, McDonald’s rolled out their “value menu”. They noticed a lot of people just bought a drink and a burger, and didn’t bother getting the french fries. So they introduced the “Value Meal”, which included drink, fries, and a burger for one “low price”. This sped up ordering, since someone could simply order a “Number 1” without having to list all of the items individually. It also created the false impression that they were saving money by ordering the meal. (If you added up the cost of items individually, they were within a few cents of the cost of the equivalent meal.)

It sped up order times, it got people to order more food, and it made the customer think they were saving money! You might not like this sort of behavior, but it was effective and clever.

Now imagine a version of McDonalds run like EA. The company leadership doesn’t really eat fast food except to sample their own products, and going to a fast food restaurant with the family isn’t something they would ever do.

So when they decide they want more money, the idea of a value meal doesn’t occur to them. Instead they just charge more. Charge for ketchup packets. Charge for napkins. Charge for bags.

There’s an outcry, and the leadership doesn’t understand why. They did the math and they figured these new policies should only add a few cents onto the usual order. What they didn’t foresee was just how much this change would hurt the overall dining experience. Now a lone mother with three kids has to stop and calculate how many napkins her children might need before they place the order. A guy who runs out of ketchup has to go and stand in line to get one more packet, while his food gets cold back at the table. Cheapskates try to save money by going without lids and straws, which results in more spills for the staff to clean up.

Worst of all, this policy just makes eating at McDonalds stressful and annoying. Next time, the family will probably go to Burger King rather than worry about rationing items of trivial value. So in the end you’ve got a system that hurts sales, makes messes, and slows down ordering. In the end, this could actually result in an overall drop in revenue.

So we’ve got two plans by two different versions of McDonalds. Both are “greedy” in the sense that they attempt to extract more money from the consumer, but one makes people happy and one annoys people. EA’s policies aren’t bad because they’re “greedy”, they’re bad because they’re idiotic and self-defeating. Once again, EA is spinning gold into straw. They did it with Dungeon Keeper, with SimCity, and now with friggin’ STAR WARS.

Greed is not the problem. A failure to understand consumers is the problem. A failure to understand the market is the problem.

They’re Even Bad at The Simple Stuff

Let’s go back to that Reddit comment from earlier. That comment displayed a spectacular level of contempt for the audience. It makes the claim that EA just wanted to give players a “sense of pride and accomplishment”. Nobody believes this. Nobody would be expected to believe this. EA did this to make money, and everyone knows it. They did it because they tried to predict how far they could push monetization and they overshot.

Public relations can “manage” public perceptions. It can steer public opinion by applying a crosswind to people heading towards the truth. Maybe a really good PR move can convince the consumer the sky is actually green, but no PR lie in the world can convince them that night is day. When you tell them night is day you’re sending a message that “We think you’re stupid enough to believe this.” So you follow up an unpopular policy with an insult. This is not a mistake they would make if they understood the landscape of the business they’re in.

Maybe they think consumers are stupid. Maybe they made this statement for shareholders and didn’t care enough about the consumer to tell them a plausible lie. In either case, it shows that even their PR apparatus is deeply out of touch. This controversy isn’t the result of a single mistake. It’s the result of years of systematic failure and malfunctioning company culture.

This Dumb CNBC Article

But you don't have to take MY word for it...

Let me set aside dumping on EA for a second to poke some holes in this opinion piece from CNBC: Gamers are overreacting to EA’s â€˜Star Wars' controversy; publishers should raise prices.

First off, this is another case where I think the term “gamer” is really hurting us. For years people – even a few gaming journalists – have been trading in the stereotype of the “gamer” as a fat loser living in his mother’s basement. (Or worse. Warning: Politics.) We’re a big diverse group these days, including all ages, income levels, genders, nationalities, and political backgrounds. “Gamer” is about a useful label as “driver”. It’s nearly everyone old enough to buy the product.

The article says “gamers” are overreacting. You know how those “gamers” are. I think a more useful label here would be “consumers”.

In any case, the analyst claims that:

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,” the firm’s analyst writes. “Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive rate, and should probably raise prices.

Like I said in my McDonald’s example above, there are smart ways to raise prices, and there are stupid ways to raise prices. Even if we accept the premise that prices should be higher, this approach clearly falls into the “stupid” category.

But I don’t even agree with the premise that prices need to go up. There’s a lot of downward pressure on prices from the indie scene. Likewise, the world of retro gaming gets bigger every year. If this was 2007 and AAA gaming was the only source of new titles then you might have some room to increase prices. But in a world where there are more games, and cheaper games, then you need to bring something fresh to the table to lure consumers away from the alternatives. And making the game a mind-numbing grind is not going to accomplish that.

And finally, I take issue with the idea that AAA games are a particularly cheap form of entertainment. My family pays $12 a month for Netflix, which gives my wife about 50 hours of entertainment a month. That same $12 also gives me about 10 hours a month, and then some more time for each of the kids. We’re probably getting close to 100 hours for $12. You can find ratios that good in the world of videogames, but not easily, and certainly not in the AAA space.

Wrapping Up

Like I said, this isn’t really a victory over EA. Even if they give in to consumer pressure and give Battlefront II a progression system the public enjoys, this company is still run poorly and will continue to make bad decisions going forward.