Value Exchange In Videogames
How does value emerge within videogames, from the perspective of their players?
I've found Atari's 1972 arcade classic "Pong" to be an excellent reference to use throughout my career as a videogame creator. Whenever I encounter a complex topic that I don't fully understand, such as game design, or interactive audio, and I want to dig into it in detail, I’ve learned to use Pong as a lens through which to study the topic.
That's because of the relative simplicity of its construction: two bats, two walls, two goals, two score displays, a 'net' divider, a ball, and a set of logic rules.
All the emergent properties we subsequently experience derive from the interaction of those 7 elements. Compare that with the tens or perhaps hundreds of thousands of elements one might find in a modern videogame, such as Elden Ring or Assassin's Creed Valhalla. Given that we know it's possible to produce the emotional state we call 'fun' from both Elden Ring and Pong, I would suggest that anyone who wants to understand the fundamentals of game design would be better to begin honing their craft by studying Pong rather than Elden Ring in the first instance. There'll be plenty time for the subtleties and complexities later on, but first it's important to understand the basics, and that's where an example like Pong can really help.
Evaluating the effect each of seven variables has on the fun we feel is a difficult task, but it is at least manageable for anyone sufficiently motivated. After all, there’s a lot of truth in the old maxim that “Art is a science with more than seven variables”. Evaluating the effect each of ten thousand or more variables has on the fun we feel can be so complex as to feel overwhelming.
Which is why, when it comes to studying the concept of 'value' within videogames and identifying where player value emerges from, experience tells me to start at the very beginning with Pong, rather than with today's massively multiplayer online behemoths, such as EVE, World of Warcraft, or Fortnite. Even though, on the surface at least, today's games might seem to offer more immediate insights given their inbuilt economies and explicit value systems my hunch is that these emerge from the core game rules that underpin them rather than the other way around. For the purposes of my own investigation into videogame economics then, I'll be starting by identifying where value emerges from in a videogame, from the perspective of game design. I'll use that to see if I can discover any fundamental underlying principles before I attempt to dissect any modern game economies to learn what they might reveal.
The Value Proposition Of Videogames In 1972
When Atari launched Pong in 1972 the business model for videogames was much simpler than it is today. The game developer invests upfront in making the game and bringing it to market. They write the software to run the game, they build the hardware to allow the software to run, and they wrap both of these up in a cabinet with a video display unit, a speaker, two rotary controllers (paddles), and - most importantly from the perspective of the business model - a slot that takes coins.
The value proposition is therefore one dimensional: the player deposits a coin (usually a $0.25c ‘quarter’), and Atari provides them with the opportunity for 2 people to play a game of digital ‘table tennis’ together until one of them reaches a score of 15 points. Once that first player reaches the target score of 15 points they are declared the winner, the game ends, and the players can either walk away or deposit another quarter to play again. That's it.
Diagrammatically it looks like this:
That's Pong's business model. So how does that look when viewed through a lens of "Property Rights"?
Since no property ever transfers from the game to the player this would appear to be a straightforward rental arrangement, largely analogous to two tennis players hiring a court from a sports centre or other provider. In that scenario the players pay for exclusive use of the tennis court for a pre-agreed period of time, typically 30 minutes, 60 minutes, or some other duration that's mutually agreeable to everyone involved.
Diagrammatically that looks like this:
In Pong, choosing to deposit a quarter functions similarly to hiring the tennis court in the previous example. The payment provides the players with exclusive use of the Pong arcade machine; they essentially rent a digital court to play a digital game of tennis. However, straight away there is a notable distinction between these two otherwise similar transactions - the unit used to measure and limit the rental period.
Pay-Per-Play vs Pay-Per-Day
In the analogue world of tennis courts the rental is usually time based. The players rent the court for a set duration and are free to play as many games as they like during that time. Whereas, with Pong, the digital tennis court is rented only for the duration of a single game, and the players are free to play that game for as long as it takes to reach its 15 point conclusion. I wasn't able to find a world record for the longest ever Pong match, but the longest ever table-tennis rally lasted 766 shots and took 10 minutes 13 seconds. So, hypothetically, if a Pong game ended with a score of 15 points to 14 points, and each point took that long to win, well... let's just say a business model that charged per game probably wouldn't work so well.
Which might seem flippant, but it actually leads directly to the first point I think is worth being conscious of when it comes to property rights and value in games. Which is this:
The business model a game uses is not an inherent property of the game design itself. It’s entirely separate. It's not some inalienable aspect of Pong's design that forced Atari to charge players by the game, such that it could only ever be that way and could never change. The choice to charge by the game rather than the time period was a deliberate commercial decision that was taken at some point during the game's creation by the business, and it's a decision which could just as easily have been made differently.
I believe this principle applies to all commercial videogames. A conscious decision is made by the business or designer at some point to determine the method by which to transfer value from the player to the maker in exchange for play.
Furthermore, as noted above, the implications of that choice can have a profound impact on a game’s ability to generate value for its creator. Which would imply there are more effective choices and less effective choices when it comes to commercial design, just as there are with game design.
What are the implications of this, and do they matter?
I suspect so, and that's what I'll be diving into next.
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