Wednesday, May 9, 2018

Some Thoughts on (Blizzard) Selling Cosmetics for Charity

Depending on how well the charity uses the money it receives, supporting charities that have goals that align with your own can be a great thing. One such goal that can generally be agreed to be great is putting an end to cancer, even if it's a specific one such as breast cancer. Personally, I would like to think funding research for curing one type of cancer will ultimately contribute to curing them all. This is also why I think holding events to fundraise without being incredibly wasteful in the process can be great and one way to do so is to partner up and sell a product for charity.

Blizzard is a company that has done this many times over the years such as when they sold a pet to support disaster relief efforts relatively recently. This time Blizzard is supporting the Breast Cancer Research Foundation and to do so, they have ventured into new territory since in addition to selling a cosmetic in Overwatch for charity, the cosmetic in question is planned to have a limited run.

Personally, I've felt rather mixed on these promotions since while all the profits made are going towards a good cause, it comes at the expense of continuing to justify Blizzard's pricing model. Since I criticized Blizzard's pricing of cosmetics in the past, I was thinking of posting a follow-up article on the specific topic of selling arguably overpriced cosmetics to raise money for charity. Instead, I contented myself with occasionally expressing my mixed feelings.

What has prompted me to post an article on the topic is that discussion on the sale of the Pink Mercy skin personally bothered me a little more than usual. When I browse a Blizzard subreddit, there's often posts regarding Blizzard's overpricing practices but also ones expressing opposing opinions too. Therefore, I wasn't too annoyed by a recent post defending Blizzard's pricing of the Pink Mercy skin. What did irk me though was how questionable the poster's logic seemed. This detail bothered me so much that I reasoned now's a good time to express my thoughts regarding the topic of selling cosmetics for charity, however awful some may find them.

Addressing Some Points

Before giving my thoughts on the pricing of the Pink Mercy skin, I think it's best to address some points I've seen being made on the topic. This should give a general idea of what my opinion is going to be. Apologies in advance if I accidentally commit the strawman fallacy in the process.

"The skin is overpriced"

I think it's best to start with a point I'm often aligned with since I can open by advising anyone who takes this line of arguing support their point with some evidence. For example, I try to add some objectivity by comparing the price of one cosmetic to another and determining the value of each by factoring in details such as the amount of work that probably went into development of the cosmetic in question.

Pointing out willingness to buy is also important if relevant since without doing so, change may not happen and if it does, said change may not always be favorable. For example, one may notice that alternate hero skins in Hearthstone are mostly unlocked through promotions rather than purchases. It's not difficult to imagine that this shift in hero skin acquisition was due to the negative feedback players gave in response to the first few hero skins since they were priced at $10. This pricing in turn led to some posts including a tweet that I frequently reference when discussing Blizzard's pricing practices. However, I also think it's a shame Blizzard didn't attempt to explore some happy medium instead since selling cosmetics at a reduced price may be a great source of money.

"Blizzard gets a tax write-off"

This goes a step further than the position I argue from but some claim Blizzard isn't quite as altruistic as they look since they can write off all the revenue produced during the charity period on their taxes. However, since this is only a deduction (and a limited one at that) on income that was donated away anyways, it makes sense that one doesn't have to pay taxes on it. To put it another way, based on my understanding of deductions in general which would include charitable donations, if one were to make $100,000, but donated $20,000 to charity, then only $80,000 would be subject to being taxed.  This makes sense since entity's income is effectively $80,000 anyways.

To put all this another way, Blizzard doesn't directly profit from the sale of cosmetics for charity assuming they donate all of the profit to charity, which they do. They may benefit in other ways though and whether these benefits are good or bad is for people to decide on their own.

"Charities are good, so doing this action is fine."

This point strongly reeks of the genetic fallacy since it implies that doing good justifies methods that one may find questionable.

For a start, implying charities are all for good is wrong and one quick look at a charity watchdog site will quickly dispel that notion. Even charities that are considered very good aren't necessarily perfect either. This in turn means that there's some room to improve how charities are run through constructive criticism, which ideally has the ultimate result of really making charities as good as some may believe. This also applies to charitable events such as the one being run by Blizzard.

Note that this doesn't mean every charity is bad either, so it's important to do research and consider the finer details when possible. In this case, since the charity itself is fairly sound but there's clearly some negative feedback regarding how Blizzard is running the event, this brings me to my next point...

"It's for charity, so pricing it this way is fine"

This is a more specific version of the above and to it I counter with the question: "But does the pricing really make the charity better off?"

As I've already established above, criticizing how a good is priced is fair game and is in fact not all that different from criticizing how they price their goods when the proceeds aren't going to charity. This is because in the case of both, maximizing revenue is important. While one may not explicitly make this observation when criticizing prices, those who do express negative feelings may count as a lost sale due to their unwillingness to pay a higher price for a product. Since overhead per unit sold doesn't seem to be much of a problem in the case of digital goods, I'd argue it's important to consider these criticisms more since there's less of a limit for how low one can price their goods.

What I'm ultimately trying to say is that just because the money happens to be going to a (good) charity, that doesn't mean profitability shouldn't be considered and if anything, it's more important. Put another way, I am trying to advise in favor of Blizzard's interests and, in this case, the Breast Cancer Research Foundation. I would like to think other critics are also trying to help a company they like. I consider this criticism justified because Blizzard doesn't exactly have a great track record for pricing cosmetics or other microtransactions and arguably thrive off of the bandwagon fallacy thanks to their large fandom.

"People should just donate directly"

I've seen this argument come from multiple sides since I find there's many reasons to encourage one to donate directly.

For example, one argument may be that donating directly is better since it can be written off as a deduction when filing taxes rather than Blizzard gaining that benefit. I personally find this to be a trade-off subject to individual judgement since buying a product for charity provides a benefit in return so in an ideal situation, a consumer, merchant, and charity all benefit. This is also why I can't fault fundraising events such as Summer Games Done Quick, which provides free entertainment and raffle prizes as its product.

In the case of the post to r/overwatch I linked above that prompted me to write this article, the poster argues that directly donating even a little to charity helps. If every little bit helps, then I'd have to ask why the pricing of the skin directly contradicts that point. This is especially worth keeping in mind since as someone in the thread pointed out, entities such as Humble Bundle run charity events where people can pay as much as they want for something in return, admittedly with some bonus incentives to encourage more spending.

My Thoughts on the Price of Pink Mercy

The Pink Mercy skin is the first legendary skin to be sold at a static price and hopefully starts a trend where Blizzard offers skins at a static price to give players an option for acquiring cosmetics besides loot boxes. However, since there are no other comparable skins in the game at the $15 price point, I have to use information related to loot boxes to get an idea of how much legendary skins currently "cost" in order to best practice what I preach regarding finding an objective comparison.

According to the officially reported rates for earning a legendary skin from a loot box, one should expect one every 13.5 loot boxes. When attempting to buy exactly that many loot boxes in the most efficient way possible, one spends $10 on 11 loot boxes and $2.50 for the remaining 2.5 loot boxes since the lowest price tier equates to $1 per loot box. This equates to a total of $12.50 for 13.5 loot boxes which is slightly less than the $15 price tag of Pink Mercy.

One could argue that buying a specific skin should come at a premium pricing to compensate for the randomness and while I provided similar advice when discussing randomized rewards, I'd argue that not earning the other 53 items (or 385 credits minimum if all are duplicates) from the 13.5 loot boxes while trying to earn a legendary should be considered in the pricing of specific cosmetics. I think based on that fact alone a specific legendary skin should be priced at $12.50 or possibly even lower rather than $15.

So ultimately, I do think the Pink Mercy skin is somewhat overpriced even if it's not as overpriced as some of the other cosmetics Blizzard is trying to sell such as $25 mounts and $10 pets and hero skins. Therefore, I still think that Blizzard should reconsider their pricing practice and in the case of selling for charity, adopt the Humble Bundle pricing model of paying whatever one wants to. This is especially the case since I expect if Blizzard begins to sell specific cosmetics to address potential loot box regulation, people will complain about the $15 legendary price again and there will be no charity to (fallaciously) protect that pricing practice from criticism.

Final Statements

This concludes my thoughts on Blizzard selling cosmetics for charity and if there's one thing to take away from this, it's that when someone talks about how overpriced a product intended to produce revenue is, it might help to take that criticism seriously. That's free information on how (un)comfortable one may be paying a certain price, which can be useful for maximizing profits or, in this case, donations to support a charity. Shaming people for criticizing a price or talking about how they're unwilling to pay so much is detrimental and in this case does little to help the charity that's being championed, especially since they're being unwittingly used as a shield against criticism. Note that this doesn't mean the criticism can't be engaged with a rebuttal, but it would help to not lord over others on a tenuous moral high ground supported by the genetics fallacy and flimsy evidence such as the price of Fortnite's legendary skins, which one could just argue is overpriced as well.

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