Over the past decade, microtransactions have become one of gaming’s biggest talking points. And while we can largely thank them for helping to make lots of AAA games go free to play, they have resulted in a tonne of issues and pushback within the gaming community.
In this article, I’ll break down exactly what microtransactions are, why players hate them, why companies still use them and, ultimately, what the pros and cons are of this monetisation model.
What’s a Microtransaction?
When home consoles became popular throughout the 90s and 2000s, we all became used to a single-purchase model for gaming. In other words, we’d pay for the game and then we’d get the game to keep. But since then, things have changed.
Instead of requiring upfront purchases, many games—starting with MMOs and other Multiplayer titles—began to offer their games as free-to-play. Think Team Fortress, League of Legends and RuneScape. Speaking of which, if you still play RuneScape you can take a trip to Eldorado to get cheap OldSchool RuneScape Gold! Anyway, let’s get back to it.
As games became free-to-play, attracting larger player bases as a result, developers needed a way to fund development. Especially as these online games needed ongoing server management, patching and updates to keep players happy. Thus, developers came up with the microtransaction.
Microtransactions are transactions of small amounts of money—most often below $10, often below $5—where players can purchase in-game items, upgrades or unlocks with real world money.
The history of Microtransactions actually goes all the way back to the arcade, with 1990s infamous Double Dragon 3: The Rosetta Stone. This game offered up an in-game shop where players could buy in-game items for their current arcade run. But the contemporary microtransaction as we know it comes from games like Maple Story, Habbo Hotel, Second Life and even Elder Scrolls IV: Oblivion’s Horse Armor DLC.
But as we know them today, Microtransactions come in the form of lives (in games like candy crush), skins (Overwatch 2) and Loot Boxes. That’s right, while loot boxes are often considered their own thing, they are actually just a type of micro transaction. Oh, and that infamous “in-app purchases” warning that comes up on the App Store; that’s warning you that there are microtransactions within the free app!
So, Why Do Players Hate Them?
Players love free-to-play, there’s no question about it. It lets players try out lots of the most exciting multiplayer games without needing to pay up front. But this all changed when developers started bringing microtransactions to pay-to-play games—especially single-player ones!
Assassin’s Creed became infamous for this. In its reboot series from Origins to Valhalla Ubisoft decided to include microtransactions to purchase cosmetics, weapons and time-saving items. While these are not essential, it’s easy to understand why players get frustrated at this content being locked behind further paywalls—after all, they already paid $60 for the game!
Loot Boxes also became incredibly controversial for players. While some games (Overwatch) seemed to manage the randomisation odds of loot boxes well, others (Star Wars Battlefront 2) simply didn’t. In Battlefront 2 powerful heroes were locked behind loot boxes, and the drop rates of all the parts were incredibly low, thus it would take players dozens—if not hundreds—of hours of play time to unlock these core characters. What’s more, they offered loot boxes which you could purchase with a higher chance of unlocking said upgrades—yet these loot boxes simply cost more. In short, Battlefront locked powerful characters behind a paywall which players were not at all happy about.
Lawmakers also took aim at lootboxes, as they saw them as a form of gambling. And when young children are playing games like Battlefront or Overwatch, gambling with real money simply can’t be a mechanic. As a result, game developers were told to make the odds of loot boxes public with some nations banning them altogether.
Ultimately, throughout the 2010s players came to hate microtransactions because they (a) arbitrarily hid parts of games behind seeming paywalls (b) loot boxes promoted child gambling and (c) it simply seemed like developers were locking off content to make players pay more.
Then, Why Do Gaming Companies Use Microtransactions?
There are three simple reasons why gaming companies use microtransactions:
- Free-to-play games attract more players. Thus, developers need a way to secure income meaning microtransactions, subscriptions and other in-game payments are the only methods available for those within the free-to-play space.
- Microtransactions can sell more. In other words, if you sell upgrades, boosts, crafting items, cosmetics and more players who want these will buy them—and usually multiple of them. This means that microtransactions can quickly stack up to be more than the price of a standard game.
- Microtransactions make more money. The dark truth is, microtransactions are simply more profitable. Especially when games lock “lives”, limited-time cosmetics and essential crafting items behind the paywall, many players will simply fold and pay. It’s also worth mentioning that while not all players will pay (many will pay nothing at all), those who do will often spend a lot. These players who spend lots of money on microtransactions are often known as whales.
In sum, microtransactions have proven to be a better business model for games companies than traditional sales. And it’s important to remember, that lots of these funds are put back into the games themselves or the studios’ upcoming titles to make them bigger, better experiences.
Micro or Macro?
The discussion of microtransactions is a complex one. Their inclusion in games makes games more accessible for many people, more profitable for companies and, ultimately, allow large-scale online games to exist as they currently do. But they also can be used as an exploitative business practice which draws money from players’ wallets through shady system manipulation or marketing tactics.
Ultimately, they’re not going away any time soon. But as long as they continue to be regulated, they may return to being a force-for-good within the gaming industry.
