Microtransactions in gaming keep players paying
Chances are, anyone who has played any type of video game recently has run into something called a “microtransaction.” These are small purchases players can make inside of the game that allow them to get special items like character skins, extra in-game currency, or other cosmetic items.
Prices are usually quite small, ranging from $1 to $40 depending on the type of purchase, but some transactions can reach the $100 range. What looks like a harmless way for players to purchase optional content to enhance their experiences, is also an opportunity to exploit consumers for extra profits by preying on the fear of missing out.
The first microtransaction can be traced back to 2006, when Bethesda’s “The Elder Scrolls” series offered cosmetic horse armor available to purchase for $2.50. This addition was laughed at by players at the time, questioning why someone would pay extra for a virtual cosmetic item. Critics saw the cosmetic as a lazy attempt by Bethesda to push out more content. However, other big publishing companies took note that people were willing to make these microtransactions.
In 2009, Electronic Arts introduced a new type of microtransaction that changed the way microtransactions could be used. EA released a new game mode for its FIFA franchise called Ultimate Team, a type of trading card game that allowed players to use player cards that they had collected in online matches against other players. Each player was assigned a different rank of card based on their skills and popularity, as well as how they performed on the field. Just like trading cards in reality, the rare virtual cards in the game tended to be the highest priced. EA offered players the ability to purchase packs of cards for real currency which gave the player a chance of pulling a rare card, or players could simply buy virtual currency to use in the games card market to buy the rare cards directly at a higher cost. This opened up a new revenue stream on top of the $60 price tag, allowing companies to generate more profit for doing very little in terms of gameplay additions. EA saw the profits and continued to produce FIFA games, eventually adding the Ultimate Team game mode to its Madden NFL, NHL, and UFC games. It has been one of the most profitable sources of revenue for EA, making 29% of the company’s total profits at over $1.62 Billion in 2021 alone. However, Ultimate Team has come under fire in recent years due to accusations that it’s a type of gambling and should be regulated as such.
Microtransactions in modern console games have become quite popular, especially with titles like Fortnite making microtransactions a huge part of their in-game economies. But they pale in comparison to mobile game revenue. In 2022, it was estimated that the mobile game industry made over $150 billion, with most of that revenue coming from advertisements and microtransactions.
Many free-to-play mobile games use the “Freemium” method in order to get customers to pay for extra content, where they offer the game at no charge but allow the player to pay money for a premium pass to make the game easier or more enjoyable to play. Most of these mobile game microtransactions are inexpensive initially, ranging from $1 to $5, but those charges can rack up for players using multiple free-to-play games.. Of course, the user has the option to simply not pay for those things, but mobile games are designed to entice the player to pay for premium upgrades, usually slowing down gameplay drastically and adding additional issues that prevent progress. The player is then encouraged to purchase the upgrades to fix those artificially created issues. Since mobile games are so easily accessible to a large audience of users, it opens up new ways for developers to make money while also offering a free game.
Microtransactions became a staple in gaming culture, because consumers proved that they are willing to pay additional money for better game gear and extra content hidden behind paywalls. It has created a kind of class system, where the people who spend the most money end up being the best players in a game simply because they bought the best items.