Microtransactions are everywhere in today’s video games, but when The Elder Scrolls 4: Oblivion’s Horse Armor DLC caused controversy in the gaming community, microtransactions were a new concept. In 2006 - a year after the Xbox 360’s launch - the term “microtransaction” wasn’t even widely known. Instead, Oblivion’s Horse Armor was just called “bad DLC.” But it ended up kick-starting of one of gaming’s most hated and most lucrative business tactics.
Navigating almost any video game today brings with it the temptation to purchase in-game items with real money. Increasing numbers of government loot box bans seem to have brought that particular gambling-like microtransaction system into decline, but the practice in general is by no means disappearing. Publishers are constantly tempting players, in both multiplayer and single-player games, with purchasable progress boosters and cosmetic items. The latter are meant to make players feel unique and give them something to show off to friends - much like expensive clothing or cars in the real world, except with a far lower barrier to entry, near-instantaneous gratification, and, crucially, an almost universal no-refund policy.
The predatory game monetization tactics of today began with Microsoft. After experimenting with paid DLC for its first-party titles on the original Xbox, Microsoft planned to launch the Xbox 360 with a storefront populated by the newfangled “microtransaction.” Speaking to WIRED in 2005, Microsoft described the microtransaction system as one that would provide a profitable new revenue stream for publishers - one they would be foolish to skip out on. According to USGamer, Bethesda was the first third-party publisher to accept Microsoft’s idea, offering a pack of in-game horse armor for Oblivion players at a $2.50 price point.
This resulted in outcry from fans who found $2.50 far too expensive, especially for a cosmetic item in a single-player game, where no other players would even see it. Speaking about the issue later, Elder Scrolls director Todd Howard claimed Bethesda had tried to price the pack lower, but someone at Microsoft insisted on $2.50. Regardless, the Oblivion Horse Armor DLC would be remembered as one of the earliest incidents of a publisher charging players for what many felt should have already been in the game. Unfortunately for consumers, the DLC’s infamy didn’t matter.
Despite the uproar, the Oblivion Horse Armor DLC was popular in sales, performing among the best of Bethesda’s add-ons. Microsoft’s model worked, and the industry seems to have noticed. Microtransactions didn’t quite reach their current level of prominence until mobile games showed just how efficiently they could be implemented, but Bethesda’s Horse Armor Pack was an important early example of small purchases’ potential profit in big-budget games. Now, players are accustomed to spending even more on cosmetics in triple-A titles, such as $15 for armor skins in Destiny 2’s Eververse store.
Next: 15 Games That Were Ruined By Microtransactions
The Elder Scrolls 4: Oblivion released on March 20, 2006, for Xbox 360 and PC.
