What is a micro-transaction based payment system?

The micro-transaction based payment system is a business model for some games that allows players to play for free or low cost but limits progression further into the full game.  Players are given the opportunity to purchase items like upgrades, potions, weapons, armor, even the ability to visit new areas for a "small" price.

This model has been a very popular payment system in the Korean and Russian markets for some time now. In other markets, such as European and North American, the micro-transaction system has been overshadowed by monthly subscription fees.

Today, micro-transactions are beginning to gain some momentum, although the arguments for and against this controversial system are still ongoing.

Proponents say that the micro-transaction model allows companies to put out a product, which may otherwise be overly expensive or overly inflated with unwanted items, at a lower cost.  These people argue that the micro-transaction model is about giving options and those who do not want the extra items are not forced to purchase them.

Opponents say micro-transactions are an excuse for companies to put out a product at a price, which should be for the complete version, without key components.  The company then uses the micro-transaction model to force users to buy "additional features" for a relatively "small" cost.

The impact on disabled gamers fixed incomes

Those games that use micro-transactions may sound like a good idea, but in reality, they have the potential to reach deep into your wallet.  The system nickel and dimes' the player, which could ultimately have a profound effect on the overall gaming experience. The question becomes: can you truly afford to fall in love with a game?

For disabled gamers on a fixed income that purchase the game and do not realize that there will be additional costs to acquire the complete game, the costs can become difficult to manage.

To some, it can become a shady business model. Some say companies that implement or plan to implement this system into their games are just being greedy and that alone should anger many gamers.

The problem with the micro-transaction payment system is that there is not enough rational evidence that supports the system being a better solution than paying a monthly subscription fee.

Some of the games cost $50 to $60 for the base program alone then suggest the user pat for extra items or features, some of which dramatically improves the performance of the application or experience in the game.  The cost of the item or feature often varies but the more impressive or more useful the addition is the more money it will cost.

What you end up with is a situation where gamers initially can play free but eventually  they rationalize the additional cost because the upgrade is significant enough that without it, you feel cheated versus those who have the upgrade.

The monthly subscription fee is more appealing because it opens up every feature of a game to the player and it is easier to keep track of payments instead are a set amount each month. Both of these systems are designed to get as much money out of your pocket as possible, but micro-transactions can become much more costly because in some instances the amount of items that can be purchased are endless.

For those that are on a fixed income, particularly disabled gamers, micro-transactions are and will always be a very bad idea. These players usually squeeze online entertainment like World of Warcraft (WOW) into their monthly budget.

Imagine if WOW switched to this type of payment system, which according to some sources is a future possibility for the online juggernaut. Would it be fair to reward those that have the ability to pay more than others do?  Everyone should be on the same playing field, not just gamers with disabilities but all gamers should be able to enjoy a video game fully, without paying additional money.

So far, WOW only offers micro-transactions for things like cosmetic upgrades or buddy systems.  Imagine if gold selling suddenly became acceptable because it was the game company itself selling the currency.

Are micro-transactions the future?

All indications affirm the viability of micro-transactions; however, some experts say that it could be another five to ten years away. My hunch tells me that it is coming sooner than you think it is. Case in point, EA is already using micro-transactions in The Sims 3. I believe this is going to kill this game eventually, despite the high amount of units they are selling at this time.

You only need to look at places like Amazon, where you can already see that the ratings for this game are falling from its original five stars down to three stars.  The main reason most detractors list?

Micro-transactions.

We do not need micro-transactions nor do we want them. If game developers want to pull a profit, I have a simple solution, design better and more innovative games. They do not need to make a WoW killer but something that it is competitive.

Let us know what you think of the micro-transactions in the comments below.

Comments (2)

Tyler Smith

July 17, 2009

Votes: +1

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Microtransactions are not necessarily the end all, be all of the future of gaming. There is a way to handle DLC properly, where they can extend the life of a game quite significantly.

Take Fallout 3 and Grand Theft Auto 4, for example.

Fallout 3 in itself was a fully playable game at launch, with no microtransaction necessary to get a full $60 value out of it with its huge amount of gameplay. For me, I put in 70 hours before finishing off the main quest. Since the game has been released, however, there have been numerous additions to the game released for between ten and twenty dollars. Call them episodes, if you will. And they have been simply fantastic. Instead of beating the game once or twice, this DLC content has actually made me come back to the title several months after the fact to play through the new various content. New content like this keeps the game active in the market and keeps people's attention.

I do disagree with the pricing of said content however, since they are a bit more expensive than need be.

Grand Theft Auto 4 has also done something similar in its releases of additional gameplay episodes since launch. Although not quite as numerous as Fallout 3, the developers are still creating different experiences that have not taken away from the core gameplay at launch.

This, to me, is the proper way of handling DLC.

The incorrect way is EA's management of The Sims 3, where indeed gamers must pony up extra money simply to get the full value of the game at launch. However, EA has been notorious for this in other games in order to combat piracy they claim.

Matthew Leach

July 17, 2009

Votes: +1

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There's nothing worse than downloading something that is advertised as 'Free to Play', only to find that you are limited in what you can do and are at a disadvantage versus other players until you whip out a credit card to get anywhere...

Oh wait, there is. Its paying full price for a game only to find that you are limited in what you can do and are at a disadvantage versus other players until you whip out a credit card to get anywhere...

Micro-transactions leave a bad taste in my mouth. Episodic content is a better way to go, IMO.

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