It’s the latest chapter in the Star Wars saga. No, not the Skywalker saga. That story will continue when The Last Jedi releases next month. The saga I’ve talking about is that of EA’s Star Wars Battlefront II and gamers reaching the breaking point regarding microtransactions in video games. The negative reaction has gone from gamers, to governments, and now Wall Street is worried about the impact this might have on certain markets. KeyBanc Capital Markets analyst Evan Wingren added his comments to the mix in a note to his clients.
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.
Wingren went on to talk about video games currently having one of the lowest dollar-to-hour ratios in the entertainment industry, even if players were to pay $20 every month on microtransactions and loot boxes after buying the initial game. “Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive ...