NCSoft, a South Korean video game developer and publisher, launched a new monthly subscription model called “battle pass” for its online game Throne and Liberty (TL). Battle pass rewards users with in-game items like weapons based on their progress through game stages over a set period.
NCSoft’s previous approach involved selling in-game items separately through direct cash sales or offering randomized loot boxes. But this model has come under fire for encouraging excessive spending, and with growing regulations on randomized loot boxes, also referred to as “probabilistic items,” the company introduced the battle pass model.
Korean game developers such as Nexon and Netmarble are also moving away from traditional revenue models centered on probabilistic items in favor of the subscription-based battle pass model. Earlier in March, a new law requiring game developers to disclose information on probabilistic items came into effect. Even minor violations of this law led to sanctions, which prompted game developers to shift towards new revenue models.
Nexon recently agreed to compensate 800,000 users 21.9 billion won following allegations that the company manipulated probabilities to obtain specific items in its popular game, MapleStory. The Korea Fair Trade Commission (KFTC) is also investigating other companies, such as Krafton, Wemade, Com2uS, and Webzen, for similar practices.
The battle pass model offers several advantages. Users no longer need to keep spending money to acquire better in-game items. Since battle passes and the rewards contained are only available for a limited time, users are driven to play the game more often. Nexon has experienced this firsthand with its first-person shooter online game Sudden Attack, where battle pass users logged in six times more often than non-users.
Battle passes also fall outside growing regulations surrounding loot boxes. Lawmakers are discussing an amendment to the Game Industry Promotion Act allowing players to claim damages from game companies if they suffer losses due to misinformation on probabilistic items.
“There’s a growing perception that these randomized loot boxes are cash grabs for companies aimed at emptying users’ wallets,” said an industry insider. “The mere mention of probabilistic items in a new game triggers immediate backlash.”
However, the battle pass model also has its limitations. Since battle passes are relatively affordable, they must be sold in high volumes to generate sufficient revenue. Earnings from battle passes also tend to be lower than those from randomized loot boxes.
Another reason domestic game developers are also adopting the battle pass model because most international gamers prefer battle passes. In 2018, U.S.-based Epic Games introduced a battle pass to its popular game Fortnite, with great success, generating $50 million in daily revenue. Other industry giants like Blizzard and Supercell soon followed suit.
The percentage of games with battle passes among the top 20 games in the U.S. Apple App Store jumped from 5% in 2018 to 66% last year, according to GameRefinery, a mobile game analytics firm.
“As international gamers reject the old ‘pay-to-win’ model, domestic companies will need to adopt battle passes if they want to succeed globally,” another industry insider explained.
