While it’s debatable which game(s) had the first microtransactions – it seems infamous human trafficker Jeffrey Epstein was a major factor in Activision adopting the controversial game mechanic.

Microtransactions run the gamut of in-game content from cosmetics like outfits and gun skins to actual in-game mechanics. While Activision had been releasing DLC already, it was around the time then-CEO of Activision Bobby Kotick was talking with Epstein that the company really embraced microtransactions.

A conversation with Epstein began with an ask to recommend “edutainment” games for a meeting he was having with lawyer and education leader Joel Klein.

In the email, Epstein said traditional education methods have failed and games could replace them as “subversion”, albeit with some kind of reward mechanic to encourage play.

An example for subversion was given by Epstein with a door that could have “symbols” on it that meant “Konnichiwa” (hello in Japanese), and upon knocking on said door the player is greeted by “a hot princess with big tits and a thong.” He then suggests this would make a generation of kids learn Japanese.

Kotick seemed unconvinced on sexual appeal in games but said real rewards could be key in getting players more engaged.

“X prize is a good idea but key is real world rewards,” Kotick replied to Epstein. “Learn to read: earn cell phone minutes, iphone credits, virtual items in games.”

Previously, Activision had released more simple downloadable content for Call of Duty in the form of map packs. Around this time, their current release was 2013’s Black Ops II, which was the first game in the franchise to offer true microtransactions like weapon camo packs, calling cards, and extra create-a-class slots.

Things get more interesting when Epstein then forwarded Kotick’s response to Pablos Holman, who now describes himself as a hacker, inventor, and technology futurist.

It remains unclear what Holman’s role was with Epstein’s overall planning and social circle, though Epstein merely forwarded Kotick’s response to him with the subject line “president of call of duty Activision,” to which Holman gave feedback on the discussion.

“I’m all for indoctrinating kids into an economy,” Holman said. “You gotta love how his example for ‘real world rewards’ is ‘virtual items in games.'”

It’s worth noting after this conversation the next Call of Duty game, 2014’s Advanced Warfare, which introduced full loot boxes to the series in the form of Supply Drops.

Here’s the full original email from Epstein to Kotick:

critique ???

> Im meeting with Joel Klein on monday, any edutainment games that you like already out there Play “Medal of Honor” or “Call of Duty” and you will learn war history. Here’s what I’ve been thinking. Video games are already great at teaching. If they don’t assess your level and put an appropriate challenge right in front of you, the game fails. Challenge too hard and you get frustrated and quit playing. Too easy and the game is no fun. That is exactly what a good teacher or tutor would do. Fundamentally the thing that works is a 1 to 1 student teacher ratio. Even if you have a shitty teacher or tutor, you will learn a lot because that person gets to know you and challenges you at your level. That doesn’t scale, but computers do. So we have to use computers to replace teachers – or at least augment them.

Today’s video games don’t try to teach stuff we care about. Well, except for shooting bad guys. The best scheme I’ve come up with so far is to use X-Prize or something like it to co-opt the existing video game industry. Give out a prize to the game that comes up with the best way of teaching kids anything from a normal school curriculum. Let them pick whatever they want to teach, any grade level, and just incorporate it into their product. That’s the way to get the most brains and the most users for the least money. You want to skip convincing educators and parents about this stuff and just go straight for the kids.

Imagine you are looking at a door in a video game. It has some squiggly symbols printed on it. Little munchkins walk up to that door and say “Konichiwa.” The door opens and they are greeted by a hot princess with big tits and a thong. The door closes in your face. You are going to fucking learn to read and pronounce kanji.

Unleash that on 5th grade boys and then next thing you know, you’ll have an entire generation of bilingual kids speaking Japanese to each other behind the backs of their parents and teachers. Edutainment is for pussies. It doesn’t work. Once kids catch on that you are trying to teach them something they shut down. We have to keep the boobs and guns and profit. You see how much money video games are making
these days? Fuck educational reform. We need educational subversion!