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[Featurama] Why Microtransaction Models are Becoming Popular

Microtransaction models are a controversial topic in the gaming community. Gamers argue as to whether they serve as a legitimate means to fund games, rather than simply providing certain players with an advantage, and also incentivizing developers to charge what would (or should) be “free” content. However, what is undeniable is that the system of payment has been becoming increasingly popular in recent years. This occurrence can largely be attributed to a variety of factors that make the model appealing to both publishers and developers.


To start, microtransactions are basically small payments made for in-game items, also known as “virtual goods”. The system has been around since the advent of MUDS (very basic, text-only online games), but started gaining popularity with Microsoft’s marketplace for the Xbox 360. Since then, microtransactions  have been implemented in a variety of ways across various mediums of gaming.

In the past, a switch to microtransactions usually indicated that a game was preforming poorly, and had to drop its previous payment model in order to remain viable. Such a change was essentially seen as a last resort publishers could utilize in order to prevent their title became vaporware. Even now, this practice is fairly common in the gaming industry. It can be most notably seen with recent unsuccessful or declining MMORPGs such as Everquest II, Champions Online, DC Universe, and Lord of the Rings Online.
But within the last few years, microtransactions have become common with other sorts of games. One example was Valve switching one of its most popular titles, Team Fortress 2, to such a model. The change represented a new phenomena in the industry, one where a popular and thriving online game implemented microtransactions as their new system of payment. Since then, Valve’s new payment system has proven to be successful, generating massive revenue for the company while becoming an effective way to fight piracy.
What is also notable, are some of the new “free to play” MMOGs which have come out in the last two years. Titles such as Rusty Hearts, Spiral Knights, Forsaken World, and Global Agenda all started out with microtransaction models as opposed to traditional payment methods. These games show a vast improvement in quality compared to previous “free to play” MMOGs. This can perhaps be attributed to various factors, but one of them is certainly the microtransaction model. It provides a sustainable flow of funds to developers, allowing them to run and maintain high quality online games. Microtransactions also aid these games by attracting consumers who are eager to play MMOGs, but are not typically able or willing to use traditional payment methods. Perhaps the most well known and obvious example is that of the young gamer, which has no conceivable manner of paying for subscription fees without the aid of his or her parents. A microtransaction model circumvents this problem entirely, and is generally able to draw in a larger audience of gamers.
Yet, perhaps the rise of microtransactions can also be attributed to a shift in gamer demographics. Currently, the fastest growing group in the market are casual gamers, while at the same time the general audience is becoming older. Both casual and older gamers either do not have, or are unwilling to invest countless hours into a game in order to obtain certain rewards (items, trophies, armor, mounts, ect.). Yet, they are more than willing to pay fees in exchange for these virtual goods. Because both groups are becoming a large share of the market, companies over time are shifting towards their preferences and demands.
Although it may dismay some individuals, microtransaction models are here to stay. The payment method is both effective and flexible, which makes it perfect for the rapidly changing gaming industry. Recent success with the model in some games, and the ability for it to save other titles from going under are proving it to be an effective tool for many developers. More so, they’ve provided a manner in which MMOGs can reach a larger audience of gamers than previous payment models. Gamers should expect to see microtransactions become increasingly prevalent as the industry continues to progress.

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