The reality of Micro transactions (MTX) in the game of RuneScape is simple. It’s so simple that numbers provide a very clear outlook on what would happen without MTX. This combined with the ever constant development pace of RuneScape shows the importance of MTX to the corporate bottom line. And finally, we must be aware of the surroundings around us that shows we are not living in an evil dystopia of MTX.
This past week I was pointed to Companies House by a gentleman known as @Zulisian on Twitter. Companies House stores the legal documentation that corporations in the UK are required to file. Among these include the “Group of companies’ accounts” for Jagex Ltd up to December 31, 2016. This is the financial documentation for Jagex’s activities over the last year with comparison to previous years activities. As with most things in life the purported issue of MTX can be broken down to a simple 1 + 2 = 3 scenario.
Here’s what we know, in 2016 Jagex Ltd made a grand total of £28,837,745 profit. 2015 profits came in at £23,676,735, a swing of £5.2 million. Since this is not a lesson in accounting I am not going to bore you with the details of where the money was spent before arriving at this profit, we know they spent money, the details are in the report. What we also know is that in 2016 subscription revenue total £46,879,490. Advertising revenue came in at £375,560. Other income (including event ticket sales and merchandise) totalled £142,811. And finally, revenue from MTX totalled £27,025,917.
This leads to a very clear realization that if MTX disappeared and all things remained the same, operating profit would drop to £1,811,828. For a corporation that employed 323 people in 2016, that wouldn’t be a number in the industry that would be considered sustainable and able to weather any fluctuations that could potentially occur in 2017 let alone the witnessed fluctuations between profits in 2015 and 2016. A lower profitability margin also has the ability to deter investment both from external sources into the company and internally when it comes to trying grand new ventures.
Case in point: MTX is needed to ensure the long term financial viability of Jagex Ltd. This website relies on the financial security of Jagex Ltd. The communities that you have woven and take part in on a day to day basis rely on the financial viability of Jagex Ltd. We all benefit from sustained financial viability.
What could Jagex do instead of MTX? Without knowing internal metrics on subscriber retention in relation to membership prices these are going to be all very rough ideas. An outline to a RuneScape without MTX could look something like this:
While it may seem that the MTX promotions issued by Jagex are something akin to the devil or other demonic beings, it could be far, far, worse. We’re going to look at two brief cases in two other games that I somewhat regularly play. World of Tanks and Star Trek Online.
Earlier this year Wargaming released what was known as the Object 252U Defender, a Russian premium heavy tank. The vehicle has impeccable combat characteristics including very strong armour for its tier and a gun that at the time had the best armour penetration values for its tier and class, meaning if you saw one of these on the battlefield and weren’t using a higher tiered vehicle or premium ammunition, they were pretty hard to take out. These tanks were available ranging from the price of €39.99 to €99.99. That’s roughly in the range of $45USD to $117USD. If you spent this pile of money you had a distinct advantage over others.
When it comes to Star Trek Online, Cryptic is no stranger to releasing new starships for real world money. With the appropriate resources you can get any ship released for in-game currency but it will take time. A new ship that’s released for Star Trek Online goes for $30 if it’s a single ship. $50 for a bundle of 3 and $100 for a bundle of 9. These ships are often iconic ships from the Star Trek franchise so it’s no surprise that people pay this sum of money. These ships are all top tier and often quite powerful. In reality saving up for one of these ships could take anywhere from 6 months to a year if you don’t shell out real world money.
It is my hope that after highlighting these two extreme cases of MTX in other games that we will all come to see Jagex’s MTX offerings really aren’t that bad and game breaking compared to some of what’s out there in the gaming landscape. Also the purpose of MTX for Jagex’s bottom line can not be understated. MTX brings financial stability to the company and ensures that Jagex will continue to be profitable for years to come.