Some people have the money and there is no issue with spending it.  Some people are rich or independently wealthy, or come from wealthy families, and spending a few thousand dollars at an entertainment program is nothing.

Others, sadly, are more like the poor person with a compulsion to spend week after week in the casino even though they don't have the money.

That is one of the many difficulties involved.  As mentioned a few times, there is no single right answer.  All factors must be balanced, including the cost of the game itself.  These days the  bargain-bin games still cost a few million dollars to create and distribute and that cost is borne by someone, preferably the development is covered by consumers. 

Since the current trend in several markets is initially free with microtransactions, that is what companies do.  In these markets games cannot recover their cost if they charge a full value up front, and with ad blockers few games can rely on advertisements except those with an enormous install base.  If anyone can devise a better path to get people to pay for the game, the entire industry would quickly adopt it.

1 hour ago, frob said:

If anyone can devise a better path to get people to pay for the game, the entire industry would quickly adopt it.

Well said

7 hours ago, swiftcoder said:

I think you are misinterpreting what is being said. No one has suggested that cosmetic microtransactions fail to make money, nor that cosmetics can't increase a player's enjoyment of the game.

They are merely pointing out that cosmetics do not have a direct effect on the game's mechanics. i.e. folks who desire to can play the game without ever purchasing cosmetics, and their ability to play the game is not compromised by that choice.

That is only one type of player. And I would even argue that those players are in fact affected by cosmetics mechanically, through the psychology and symbolism of colors, shapes, and sounds. Even choosing your avatar or your name is a cosmetic choice. Anyone who believes that they are absent from cosmetic influence on their game experience do not understand the immersion that comes with video games and choice making within them. The player that is immersed and happier with their game experience will play better. This is simple psychology created by dopamines, which shows how pleasurable a game is making a player, and thus heightening their mental state.

6 hours ago, Hodgman said:

Your viewpoint wasn't just that they're making profits, it was that cosmetic items affect a game equal or more than gameplay-changing items, and that most people are affected in this way. 

High profits doesn't mean that a high percentage of players are buying them. The ARPU for free-to-play / micro-transaction games is usually tiny - far less than the cost of a single item. e.g. In a game with $1 micro transactions, the ARPU might be $0.01, which suggests that 1 in 100 people buy an item, or that 1 in 1000 people buy 10 items. The latter group of people are called "whales" within the industry, and a lot of effort goes into making games that will cater to these whales, to convince them to pay $100, to offset all the people who play $0. The targeting of whales is another moral dilemma for the industry - developers have been know to hire private investors to learn more about their top spenders, and create game patches based on what a single high-paying player wants. Some of these people are seriously addicted and spend tens of thousands of dollars on a 'free' game, subsidising it for the 99% of players who don't pay. 

As said to swiftcoder, yes, it does affect users as much as items that affect gameplay. You also mention the presence of whales as a defense that most people do not purchase cosmetic items, which I will turn you to a couple of statistics.

In 2016, League of Legends made 1.7 B in revenue. RP is purchased with real money, which is used to buy champions, skins, and other cosmetic items on the shop. Cosmetic shops make up the bulk of what is available on the shop. The best selling items are skins. When a exclusive high priced skin goes on sale, it ends up one of the best selling skins during its launch. 

In 2016, Second Life generated an estimate $49 M. Their revenue comes from in-game purchasing of virtual items, which has created an actual real money economy between players in a virtual real estate.

Counterstrike Go in 2015 made $9 Million on stickers alone. Stickers. Not guns. Not mechanical items. Just stickers.

Each of those games tailor to over a million in playerbase. If we go by your ARPU that  1 in 100 people buy an item, for example for League of Legends there were 100 million users reported active in 2016, then that would mean 1 million of those users are whales, and each on average spent $1700 each. Which doesn't seem surprising considering there's many accounts of players revealing to the public of spending over $1K on League alone over their lifetime.

You're calling people who pay for cosmetic items addicted, but I would also say they are no different from the people like yourself that claim to only  consider mechanical items as "better" than cosmetic items. This is a opinion-based thought that fails to account for the massive spending by a large sum of consumers on what is suppose to be a useless item that doesn't affect gameplay. 

To clarify again, gameplay means: mechanics, presentation (graphics, sound, story, characters), and interface. All of them contribute to a person's feel of the game. Thus, cosmetics are equally as important as items that contribute mechanics to the game. Because mechanics are equal to presentation. This is NOT an opinion based thought. My thoughts come from the profits earned by the very people at the top of the industry. As advocates on a forum about business, I assume following the statistics of accomplished businesses was the model that we should follow.

5 hours ago, Novadude987 said:

 

A statement meant to inform should be backed by facts, not opinionated statements.

 

Good lord! I couldn't imagine spending that kind of money  

The above to Hodgman is directed at you, as well.

On 11/23/2017 at 2:20 PM, Zido_Z said:

cosmetic microtransactions are not forgivable compared to ones that affect in-game functions like mechanics.

On 11/23/2017 at 5:59 PM, Zido_Z said:

The more customization options a game has, the more immersive and fun it is for the player.

On 11/23/2017 at 2:20 PM, Zido_Z said:

Graphics is the primary function of a video game.

8 hours ago, Zido_Z said:

You're calling people who pay for cosmetic items addicted, but I would also say they are no different from the people like yourself that claim to only  consider mechanical items as "better" than cosmetic items. This is a opinion-based thought that fails to account for the massive spending by a large sum of consumers on what is suppose to be a useless item that doesn't affect gameplay. 

Funny that you call Hodgman's statements opinion-based when you yourself have been doing it throughout the thread...

5 hours ago, Novadude987 said:

 

 

 

Funny that you call Hodgman's statements opinion-based when you yourself have been doing it throughout the thread...

You imply that I'm insulting anyone with those statements. I'm not assuming things based on feelings. I just don't get how we're ignoring what the consumers see as important versus what you two are saying is important. You guys believe cosmetic transactions are not any better than mechanical microtransactions. And yet, both consumers and developers more successful than you and I have proven otherwise. I rather believe the guys with over millions of dollars in profits than idealistic worlds where cosmetics have no meaning. If they did not, developers would not be making much money from them, even with a couple of whales.

1 hour ago, Zido_Z said:

I just don't get how we're ignoring what the consumers see as important versus what you two are saying is important. You guys believe cosmetic transactions are not any better than mechanical microtransactions. And yet, both consumers and developers more successful than you and I have proven otherwise. I rather believe the guys with over millions of dollars in profits than idealistic worlds where cosmetics have no meaning.

I'm not sure who you think you're responding to, but putting it a little bluntly, you seem to be having a different conversation than everyone else in the topic.

Noone is saying the things that you keep disagreeing with; you're misinterpreting somehow. Everyone knows how profitable cosmetics are. Everyone knows that a subset of players enjoy them, and that for those players they have a positive impact on the gaming experience.

In particular, you mentioned that "you guys believe cosmetic transactions are not any better than mechanical microtransactions", but if you read back through the topic carefully you'll find that's actually the opposite of what has been said a few times: cosmetics are frequently the example of microtransactions done right, specifically because they strike a good balance of being very profitable with minimised negative reaction from non-purchasing players, who frequently don't object to them because they lack mechanical impact.

14 hours ago, Zido_Z said:

You're calling people who pay for cosmetic items addicted

You say this as if Hodgman said ALL people who pay for cosmetics are addicted, but if you read over the post where he mentioned it he specifically mentioned that addicted purchasers are only a subset. Again, you're disagreeing with something different to what was actually said. It is in fact well documented that a small subset of players may suffer from addiction.

Reading over some of the posts again, I think some of the confusion is coming from a terminology problem. When people in or associated with the industry talk about mechanics or mechanical impact they generally understand the term to have a particular meaning. This is good, because it allows us to have conversations without having to define terms. However, it also means that if someone has a different understanding there will be confusion.

We all know that cosmetics effect the experience. Purchasing players get enjoyment from them; it allows them to express individuality, or to stand out, or to show that they're supporting the game. It makes them happy. This is why they purchase.

What cosmetics don't do is make the player deal additional damage, or reduce miss-chance, or increase their speed. This is what is generally understood to be a mechanical impact.

Let's look at a quick hypothetical.

In AwesomeShooter, Ahab Whaleson purchases some cosmetics because he wants to stand out; he gets a cool overcoat and sea-captain's hat. Standing out makes Ahab happier, so he enjoys his gaming experience more. Moby Dickson also plays AwesomeShooter but doesn't like microtransactions; maybe she can't afford them, or maybe she can but just doesn't think they're worthwhile. Moby isn't disadvantaged by Ahab's purchase because there is no mechanical impact.

Now a competing game called AmazingShooter gets popular. Ahab Whaleson purchases an awesome harpoon instead of the standard weapon. It looks awesome, and it deals +10 damage, so Ahab is happy. This time, Moby is unhappy because Ahab's purchase gives a mechanical advantage. Suddenly the game seems unfair.  Moby complains about "pay to win", enjoys the game less, and may even stop playing.

This is the difference between cosmetics and mechanical purchases that everyone else has been talking about.

Now, to be fair, in the real world, even well implemented cosmetics may have a negative impact on the experience for some non-purchasing players. Some might feel jealous if they can't afford the items, or may feel it's unfair if they can't earn them through gameplay. Experience has shown us these are a minority - otherwise retention would be damaged and it would no longer be profitable. Some might feel it ruins the feel or experience of the game. Of those, some will just enjoy the game less, while a smaller subset might stop playing or will start vocally objecting. Again, experience has shown us that this is a small enough number of players that it's worthwhile to implement cosmetics. We can't make everyone happy.

Does that clarify what people mean by the difference between cosmetic and mechanical purchases?

Quick disclaimer: for simplicity, I'm talking about well designed and implemented cosmetics. We're all aware that sometimes a dark- coloured skin in a dark environment might in fact impart a slight mechanical advantage for example, but as that's an implementation issue rather than an inherent issue with cosmetics it's probably not worth getting bogged down on it.

5 hours ago, jbadams said:

I'm not sure who you think you're responding to, but putting it a little bluntly, you seem to be having a different conversation than everyone else in the topic.

Noone is saying the things that you keep disagreeing with; you're misinterpreting somehow. Everyone knows how profitable cosmetics are. Everyone knows that a subset of players enjoy them, and that for those players they have a positive impact on the gaming experience.

In particular, you mentioned that "you guys believe cosmetic transactions are not any better than mechanical microtransactions", but if you read back through the topic carefully you'll find that's actually the opposite of what has been said a few times: cosmetics are frequently the example of microtransactions done right, specifically because they strike a good balance of being very profitable with minimised negative reaction from non-purchasing players, who frequently don't object to them because they lack mechanical impact.

 

You say this as if Hodgman said ALL people who pay for cosmetics are addicted, but if you read over the post where he mentioned it he specifically mentioned that addicted purchasers are only a subset. Again, you're disagreeing with something different to what was actually said. It is in fact well documented that a small subset of players may suffer from addiction.

My disagreement was over him saying:

"That is... not a very common opinion." In response to me having said: "Cosmetic microtransactions do, in fact, affect gameplay as much as purchasing guns or characters, if not more."

Upon my reply, he answered: "Yeah, nah. Most people actually don't care about how their character is dressed up. It really doesn't affect their game experience anywhere near as much as other game items, and your viewpoint is actually extreme to them." 

Which I said is a lie based on said statistics. Even his use of ARPU, which doesn't account for the games where whales are the minority compared to majority paying money, for instance League of Legends, Second Life, Counterstrike, did not apply to said games. 

Then my post after is me explaining that both his underestimation of cosmetics and calling those who buy them addicted doesn't discount the fact that cosmetic microtransactions are more important than mechanical microtransactions like heroes, guns, etc.

The debate was quite simple. "That is... not a very common opinion", happens to be a very common one based on profits alone.

4 hours ago, jbadams said:

Reading over some of the posts again, I think some of the confusion is coming from a terminology problem. When people in or associated with the industry talk about mechanics or mechanical impact they generally understand the term to have a particular meaning. This is good, because it allows us to have conversations without having to define terms. However, it also means that if someone has a different understanding there will be confusion.

From my side, there are a couple of things I agree on cosmetic microtransactions:

• They affect a player's experience. If we're all in agreement there, then I think we're all good.
• I'm aware that cosmetics don't affect the game's control interface or mechanics, like how much money you get or how powerful a weapon is. I'm in complete agreement of that point. My separation of concept is mechanics are not the only part of a game, so Hodgman and Nova saying that cosmetic microtransactions are "fairer" than mechanical ones is unfair to say considering it's not only a very opinionated viewpoint, but the profiting of cosmetic microtransactions undermines such an opinion.
• Another is what you pinpointed on with colors altering people's perception of the game, which is a very good one, and a point I was going to bring up if the conversation didn't devolve into me having to deflect assumptions. It's something I never hear anyone actually speak out against. When you do ask that to someone in an argument about cosmetics, they almost seem to shrug it off in a way. It's very strange.

23 minutes ago, Zido_Z said:

Which I said is a lie based on said statistics. Even his use of ARPU, which doesn't account for the games where whales are the minority compared to majority paying money, for instance League of Legends, Second Life, Counterstrike, did not apply to said games. 

You're misinterpreting again. Everyone knows very well that whales are the minority of paying players, but that they usually account for the majority of revenue; that's what defines them as whales. You're pointing that out as if it counters some point he made, but it simply does not.

His main point was that the majority of players do not care about cosmetic purchases, and the statistics support that: League of Legends has an estimated conversion rate of less than 4%. Noone is saying it isn't extremely profitable, but it's a tiny fraction of the player base that's making it that way. This compares poorly to other successful games which typically have conversion rates closer to 10-15% - still a relatively small portion of total players.

The statistics simply don't show what you seem to be arguing that they show, and are in fact in line with what everyone else has been telling you.

You yourself introduced yourself to this topic by saying you believed you would have a minority viewpoint as the very first thing you said; it's therefore somewhat perplexing that you're now going to such lengths to disagree with the suggestion that your views are uncommon.