The video game industry is reported to be worth around $344 billion worldwide based on revenue made from gaming companies such as Sony, Nintendo and Microsoft. A decent portion of this revenue is made from microtransactions and other in-game purchases.
This could be downloadable content (DLC) such as additional story features, character skins to change in-game appearance, or purely an exchange of real money for in-game currency.
Microtransactions
Microtransactions started with exchanging real money for in-game currency, as previously referenced. The first noted game to use this system was Double Dragon 3: The Rosetta Stone, an arcade game where players would purchase upgrades for their characters, such as health and special moves.
Games like Second Life, a free to play online game where players create avatars, talk to other players and take part in activities, utilised the microtransaction model to boost revenue for the gaming company, Linden Lab. It also enhanced players’ experience as they were given the option of additional content to buy.
Launched in 2003, by 2005 Second Life had processed $3,596,674 worth of transactions.
Arguably the most well known piece of additional content came from Bethesda’s The Elder Scrolls IV: Oblivion. Bethesda released bundles of DLC onto the Xbox Live Marketplace, the first being a set of horse armour for around $2.50.
The DLC sold poorly, and players complained at the price of the armour. However this became an influential piece of business within the gaming sphere, and shaped how gaming companies released additional content.
Microtransactions have been a staple feature in big studio games ever since and a permanent part of free to play games found on the Android and iOS markets. A study conducted in 2013 estimated that 92% of revenue from these markets came from free-to-play games such as Candy Crush.
This could be partly due to advertisements in the game, but the main bulk of that figure will be microtransactions.
Some studios still operate free to play games with no microtransactions.
Other aspects of gaming that involve paying to play is the online casino sector, such as platforms like PokerStars Casino. However, unlike video games that contain microtransactions, online casinos are regulated by the Gaming Authorities which ensure and encourage playing within established limits.
You also have to be over the age of 18, which helps to safeguard players and maintain the integrity of legitimate platforms.
Some online casinos offer demonstration modes, which let players try out different games using free credits that are allocated by the site to the player. This lets players, new and existing, try out new games before playing for real money. Slots are the most common game to offer demonstration accounts.
Criticisms
Gamers became increasingly vocal about their opinions on microtransactions as they became more prevalent within gaming.
One of the most common negatives was that games that use the “loot box” system, such as FIFA with Ultimate Team packs and Counter-Strike with cases, became increasingly more like “pay to win” games.
A loot box is an item you can buy for real money or in-game money that contains items like players, skins or weaponry in games such as FIFA and Counter Strike.
This goes hand in hand with pay to win, as this implies that after a certain point it is virtually required to pay real money in order to progress or succeed at the game.
In this instance, despite most microtransactions being optional, players felt they had to pay more to fully realise the content of the games they were playing.
Another common criticism is that players who had already paid for a full game were now paying more on top of the initial fee. This is a key difference between FIFA and Counter-Strike.
Counter Strike is a free to play game which only requires a PC or laptop and a Steam account. With FIFA, players buy the game outright then can buy packs on Ultimate Team.
Belgium and The Netherlands outlawed games containing microtransactions in 2018.
For gamers worldwide, however, microtransactions are here to stay. Governments in the USA and the UK have made attempts to regulate and control games that feature microtransactions. The USA has already tried to pass four bills in an attempt to regulate microtransactions. All four were rejected.
