Wall Street Analyst Cautions Against Gamer Overreaction

Posted by Bret on 11/20/17 at 01:50 PM Category: Battlefront II

An analyst from KeyBanc Capital Markets was the subject of a CNBC piece today. The firm's analyst, Evan Wingren, states that there has been an overreaction:

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.

"MTX" is apparently what the cool kids are calling microtransactions these days.

Wingren reveals an analysis of the cost of entertainment per hour:

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 cent 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.

I'm not sure on what planet you can go see a move for $6, but whatever.

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. Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive rate, and should probably raise prices.

This firm has come out as "bullish" on video game makers, keeping a positive outlook on stocks for Electronic Arts, Activision Blizzard, and Take-Two:

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.

As such, it is in their best interest to downplay the negative fallout from the Battlefront II public relations debacle, so they could just be toeing the line.

Personally, I'd rather pay $80-$100 for a multiplayer game that had all of the perks built in to a fair play system, and leave the MTX (look how cool I am!) to the cosmetic upgrades. For single-player, I don't mind paying for additional levels as post-release DLC, so long as the off-the-shelf game gives me my money's worth. Fallout, Grand Theft Auto, Red Dead Redemption, Assasssin's Creed....These games felt pretty complete in their original form, and DLC was available later, but I usually had my fill by then.