Microtransactions – The Hot Topic in Gaming

Photo Credit: Fábio Silva

It seems, today, that almost every game you play now contains in-game purchases. This might be to make character customizations, remove wait times, or unlock extra features. In the most controversial cases, some games can pretty much require you to pay to win by allowing players to buy incredibly powerful weapons, skills, or tools that give them a significant advantage in the game.

Gaming companies like this business model as it provides them with a continuous stream of income from their software, rather than receiving a single payment upfront.

Of course, this isn’t the only model that businesses use to earn ongoing income from their games. Many of the earliest video games could only be played in arcades, requiring you to push coins in the slot if you wanted to keep playing for a few more minutes. Even though consoles and home computers are in almost every home now, these arcade machines are still popular among gamers.

Additionally, the casino industry operates on a similar business model with customers making a wager on each game they play. This has been the case throughout its history. In fact, little has changed in the way the centuries-old blackjack is played since it was first created sometime during the 18th century. While these card and table games have moved online with different variants available, they have retained the same business model as it works for both the casino operators and their customers.

While microtransactions aren’t the only way in which gaming companies can earn revenue from their content, this model is the one that is attracting much of the interest and criticism from gamers. Why is this?

Why Do Many Gamers Criticize Microtransactions?

The traditional model for video games that you could play on your PC or console was simple. The developer created a game, the publisher burned it onto discs, the retailer sold the discs, and you would hand over some cash in exchange for a copy.

Once you’d done that, you owned your copy of the game. All of it was available to you for as long as you kept it, though some content would likely have to be unlocked by completing earlier missions or tasks.

The free-to-play model, which is why microtransactions first appeared, moves away from this basic concept. You don’t own anything. Instead, the publisher can take the game away at any moment, preventing you from ever playing it again.

While this might be somewhat annoying, the biggest criticism is the inclusion of microtransactions in games that still require a large upfront payment. For example, after handing over as much as $90 for the Ultimate Edition of EA’s FIFA 2023, players will still have to pay extra to buy additional in-game content.

Why Do Publishers Include So Many Microtransactions?

Using the traditional method of monetization, publishers would receive a payment for each game they sold. To generate further revenue, they’d have to produce and sell a new one. They also lost out on revenue from gamers who bought games secondhand as the money they paid would go to the seller and not the publisher.

Additionally, the cost of developing video games has increased progressively over the years as inflation meant staff wages and other overheads have risen. The games themselves have grown bigger in size and complexity, requiring larger teams and more time to create. Even most modern indie titles are complex undertakings.

However, despite regular increases in price through the 1990s and 2000s, the RRP for most standard versions of AAA games hasn’t gone much higher than $60 for over a decade.

Microtransactions, therefore, are a great way to cover all these additional costs. Publishers have experimented with other solutions, but they were universally unpopular as opposed to the “mixed” sentiments that microtransactions have.

By using microtransactions, gaming companies can also extend the life of their releases by providing regular updates for players. This keeps titles fresh and exciting for much longer, helping to reduce the need for big project teams to work on entirely new games every couple of years.

Are Microtransactions Here to Stay?

Despite what the most vocal critics of microtransactions will have you believe, there are many people who actually like the additional features and content that microtransactions provide.

Additionally, the free-to-play model allows companies to provide their software to many more players than they otherwise would.

While they’re not to everyone’s liking, microtransactions are likely going to be here for some time.