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The Experiential Microtransaction
by Kevin Harwood on 06/12/14 02:24:00 am   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.


I’m going to guess that many might not see the significance of this article. Microtransactions are a hot topic in the realm of the hated corporate agenda of video games, but I don’t think it’s enough to just “hate” microtransactions or the companies pushing them, I think you should know what they’re trying to do. The nature of experiential microtransactions is simple  when compared to real world examples.

Experience as a Product

If you ever have gone to StarBucks you’ll understand what an “experiential” product is. The basic idea is that you’re not just buying a coffee, but buying an experience – the ethnic/exotic music being played, the decorations on the wall (usually dark and warm colors) or the rough wood grained table that feels different under your fingers compared to your regular IKEA table. I don’t want to get weighed down with this point, but Harvard Business Review has a great article expanding on it. Main stream marketing has clued into the fact that people are’t so interested in the utilitarian function of a product anymore – it’s about how the product is experienced that’s the focus of modern marketing.

When I chat about MTX design and examples with friends, I often hear examples pulled from WarCraft and GuildWars. It’s long been the classic standard where you exchange an in-game commodity for real world currency and the value is in how great the “product is”. When there is an agenda to increase sales volume, awesome equipment and items might be put on sale as an incentive for players to buy. Having worked with clients to balance their in game economies, I’ve seen first hand this isn’t a reliable or sustainable model to work with. You can flood the in game economy with epic items but this unbalances other systems and devalues other items, forcing you to find new items to put on sale. This conundrum sparked the desire to put the emphasis off the actual item subject to the microtransaction and more to the experience.


MTX HearthStone

Arena Prizes

In my series on HearthStone and its monetization strategy I mention how the principle MTX mechanic is purchasing packs of cards is built on the experience of opening the pack. There are flashy visual effects, sounds and even an interactive function to create a “moment” when you’re receiving your cards. I need to dispel the thought that this is just a “random” occurrence – video game design resources on IPs this large are calculated and have a purpose.

An even better example is the Arena mode of gameplay in HearthStone. You pay $2 to make a random deck of cards and see how well it performs. Once you have lost 3 matches you are given prizes in volume based on the number of wins during your Arena run. the picture to the right shows the screen you’re given with your prizes – the experience is so based around earning prizes, the prizes are “wrapped” so you can open them to fully experience the surprise along with flashy animation and sounds. The reason HearthStone marks a landmark in MTX design is the Arena was exclusively designed for users to pay money (or hard to earn game points) to experience. For players who get bored of the regular HearthStone gameplay and want a unique or more challenging game mode they have this experience always ready to purchase. I pretty much see this design as a carnival on a video game. You’re not paying for the crappy prize they give you, you’re paying for the experience of achieving. 

The Battlefield series has just implemented a similar system. From a consumer’s view it would seem straight forward to just be able to purchase the specific guns and equipment desired. The regular course of acquiring guns is a long drawn out process and many hardcore clan members would likely pay $2.50 for a given item, but instead players are only given the option of purchasing battlepacks which are filled with random pieces of equipment.

One final example is the new mystery skin gifting in League of Legends. The basic concept is that instead of buying a specific skin for your champion, you can buy a random skin for one of your owned champions. On top of the excitement of randomness in the skin you’ll receive, you might even a rare or legendary skin. You’re able to gift the skins to other players and it becomes a new skin buying experience less about the actual skin but more around the excitement or surprise.

The Historic Method

If you remember back to your first time playing Zelda: Ocarina of Time, your heart would race when you’d see a big chest in the middle of the dungeon. The chest opening animation and music was done in such a specific way – to build anticipation and further the excitement of the player in opening the reward for their progress. This new MTX strategy is putting a coin slot on the experience of achievement. Game design is fundamentally about having players achieve progress and we’reMicrotransactions experiencedevaluing the process by creating an MTX model around selling progress. Yes, this is nothing new to the arguments against “pay to play”, but what really discourages me here is not that the MTX element exists but that the game systems are adjusted to further incline players to the monetization strategy.

Usually, you make a progression system oriented around having a player feel they’ve earned their reward when they’ve spent sufficient time commensurate with that reward. If the rewards are too low for the time or effort invested, a player will naturally feel unsatisfied. Experiential MTX design relies on this dissatisfaction to push players to spending

What’s always fascinated me about MTX theory is that it has generally mimicked the Western consumer economic theories. If you’re familiar with the idea that the very first goods sold in the historic economies were products which then led to the service based economy you’ll understand how we’re experiencing this exact same thing here.

The Ultimate Dangers of This

These should be super obvious;

1. The excitement in videogames becomes a virtual good bought and sold. I personally wouldn’t be interested in a game where the design is meant for me to be under-satisfied or underwhelmed by the content unless I was willing to pay more than the price to acquire the game. It’s a bait and switch tactic that I find repugnant.

2. Content becomes optimized from a financial perspective creating redundancy. Once the magic formula of what sells the best is found, every developer will just copy it. We’re seeing it happen right now with the major titles all springing to implement random MTX purchases.

3. Game content becomes about the experience of progress rather than the acquisition of achievement. This might sound unimportant, but it means that games will be made in such a way to encourage players to achieve ambigious goals rather than the traditional PvE, PvP or social goals.

Maybe I’m looking at this really subjectively. Do you like the way this works? Do you think this has a positive impact on game development?

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Peter Eisenmann
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For some time now, I have been fantasizing about a strategy game where you buy packs of units, tear open the pack (especially realistic if played on a touch-screen) and the (toy-sized) units fall out, with correct physics of course :9

Michael Joseph
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"Main stream marketing has clued into the fact that people are’t so interested in the utilitarian function of a product anymore – it’s about how the product is experienced that’s the focus of modern marketing."

We used to call this "polish" and it's helped some companies establish powerful brands. I think we can look back at the types of highly polished games Lucas Arts and Blizzard were cranking out in the 90s as examples of this. Fancy splash screen animations and ironically the ability to skip the splash screen contributed immediately to the sense of a game being well polished.

We've also seen it before at retail in the form of elaborate game packages, collector's editions, carefully designed manuals, and other boxed extras.

So games have been demonstrating to players that they have been consciously thinking about the end-2-end player experience for some time.

From the HBR article: "To realize the full benefit of staging experiences, however, businesses must deliberately design engaging experiences that command a fee."

lol. I see. We used to call this the "nickle & dime" experience. But they've dressed it up with a lot of fancy talk. Next supermarkets will charge you to enter reserved checkout lanes that are adequately staffed, your bank will charge you to talk to a human being, and your hotel will charge you for changing your linens and cleaning your bathroom while you're away.

All one really succeeds in doing when they take up these practices is to advertise to customers that the product they've purchased is CHEAP.

p.s. Is MTX the new classy / less vulgar sounding way to refer to "microtransactions?"

Kevin Harwood
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Awesome points Michael. I'm pretty frustrated with the scene right now - every professional project I work on is deploying this strategy. The short sighted revenue potential seems to outweigh the consequences. I already see the "upselling" in most triple A titles and I fear it will trickle down to independent studios.

Funny you mention it. I've recently met with a few teams who don't like the terms "monetization" or "microtransactions". They instead say "retention consideration" or "MTX" and it's rubbed off on me I suppose.

Eric Finlay
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If I'm understanding you properly, games are basically being turned into vehicles for slot machines?

Kevin Harwood
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That's what I see in the major titles, yes. From a sellers point, they've recognized that players don't want to buy "one of everything" available. They have specific buying intent patterns. In order to increase the ARPU of an user they try to make it so you can't buy what you're after directly. To camouflage this fact they turn the process of earning new items an experience and put less focus on the actual items themselves (or else you'd realize you're not getting what you want).

Battlefield is my favorite example. When I talked to a EA product manager I directly asked him "why aren't you allowing users to MTX specific guns and equipment? People clearly want to acquire specific things for their character." I was given a loquacious answer and steered away from this question.

Tuomas Pirinen
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In the physical world collectible card games the randomness and rarity of the cards found in booster packs has been part of the experience for decades. In those games the excitement of opening the booster pack has always been part of the allure, and the chatter on which rare cards did you acquired and comparing decks has driven the community chatter for untold years. So when you buy a booster pack you are buying an experience as well as the cards themselves.

But your point 2 discusses the heart of the matter: will this be the most successful model? At the end of the day the gamers will vote with their wallets and time, and the (mainstream) industry will provide the experience the gamers choose. This is what happened with the 60$ price point for boxed games. Price points were experimented with until the optimal one was found.

However, even if the randomized reward model becomes dominant, there will always be plenty of developers offering the pay once model games. The industry is easily large enough for that.

Will be interesting to see which way the gamers go. Though as your examples point out, Hearthstone and LoL certainly have reached the masses with a combination of low barrier to entry (traditionally the high initial price point drove away a lot of the players) and then providing these premium experiences as the way to generate money for their free games.

Brian Tsukerman
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Last point seems to cut off suddenly.

Otherwise, I agree with the concern of releases being underwhelming in order to sell you excitement through microtransactions. It's the same bait-and-switch feeling I got when certain games released DLC's very soon after their initial release.

I can't blame the developers or publishers for wanting to capitalize on the games they make, so the redundancy is no surprise. The repeated implementation should end up thoroughly testing the idea with the players until the ones that use it best become popularized.

Much like with DLC before it, I now use microtransactions as a gauge of how the company relates to it's customers.

Andreas Ahlborn
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Flashy presentation won`t change the fact that for any RNG related rewards/purchase-mechanics people who are interested in a game in the long run and considering to spent will/should make informed decisions on value of game items only if there`s an interesting meta-game to it, apart from the obvious "complete your collection" hook.

Basically it`s the question if any super-rare items are useful for actual gameplay or if at least the meta-game is flexible enough that an expensive item could become useful once the nerf/buff-hammer hits.

Once the habitat of a game settles and balances out it`s very tempting for developers to only introduce "cosmetic" items, since -especially in a pvp driven game- slightest changes can absolutely wreck havoc on your community. Introducing "useless" super-rare items hinders new player to get the "useful" items in an RNG based game.

(This would be an addendum to your point 2: game content gets artificially bloated, such diminishing the ROI for newer Players)

This is the clear disadvantage when you combine RNG and competition and developers should treat RNG in PVP games as the devil incarnated.

Hearthstone is a good example how the developer struggles for his game to be taken serious as an esports, because most decks that are competitive on a tournament level should easily cost 500-1000$ to craft, thanks to RNG.

LoL/Dota have clearly taken the better approach here.

Kevin Harwood
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"(This would be an addendum to your point 2: game content gets artificially bloated, such diminishing the ROI for newer Players)"

I love this point! In studying Arena Net's GuildWars 1 strategy, they seemed to discover it was better to cultivate their existing community and further monetize them rather than brave the CPA costs of finding new users. It ended up being the perfect move because it allowed their player LTV to soar and lead to the creation of a new game.

Great point also about RNG being the devil. I personally don't understand why anyone would competitively play a game where RNG is present in the competitive space. Drawing cards randomly seems bad enough, but HearthStone even has cards that do one of three possible outcomes. It just fosters less emphasis on skill.

Scott Lavigne
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Regarding the third point: This is how several popular series already are (particularly MMOs, which is essentially an entire genre dedicated to this one end), and yet we still manage despite it. Modern CoD games are a great example of walking the line between these two poles in that players are simultaneously rewarded for both and also regularly experience "achievement acquisition" regularly (kills/kill streaks/winning a match). Games like DotA (whose gameplay is entirely "achievement acquisition", although cosmetics reward time invested) are still insanely popular, though, so I'm not really concerned yet.