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[As game developers grapple with making microtransactions more appealing to Western gamers, Daniel Kromand talks to core gamers to gauge the effectiveness -- and ineffectiveness -- of current microtransaction practices.]
This spring, I interviewed a group of gamers in free-to-play online games on the topic of microtransactions. The interviews were meant to identify how the gamers determined the value of microtransacted goods, what item designs they approved, and generally how they perceived microtransactions in their respective game. The ultimate goal of the interviews was to understand how to maximize the appeal of microtransactions and in turn hopefully finding the recipe for making a lot of money.
But first, a brief overview of microtransactions: The PC gaming market is often depicted as either entirely dead, or at least in a dire crisis. A major cause for this crisis is of course not that the PC is finished as a gaming platform, but rather that a high level of piracy is undermining the traditional retail model.
Microtransactions can help to revert this trend and revitalize this market segment, but its implementation is still relatively new -- at least in Western game development. While microtransactions have been tried in single-player games (Oblivion's horse-barding maybe being the most famous), they are most widely used in online, multiplayer games, and for sake of simplicity I will only look at the latter.
The business model is often to give the game itself away for free -- in order to render piracy superfluous -- and then sell these small upgrades at low prices. Each consumer might not spend the full amount of a traditional retailed game, but the total sum of revenue gained can surpass that of a traditional game, which encounters piracy.
The microtransaction itself is more transparent than when purchasing a regular game through retail: In a microtransaction the player can pick and choose between the different features, and the properties of each good can be compared to price, while a retail bought game comes completely packaged. Willingness to pay describes how much a given consumer is willing to pay for each separate feature, but of course the actual number varies according to personal preferences.
The people chosen for the interviews were all experienced gamers and ranged from early twenties to mid-thirties. They were all male too, which in no way was a predetermined discrimination on my part, but rather the result of being unable to recruit any women for the interviews.
The following analysis has a natural caveat of only applying to hardcore, male gamers, since they were the only ones who were being heard. This doesn't mean that the conclusions can't be used with other demographics, but please don't sue me if things go awry.
The interviews revealed some of the influences that affect the consumer willingness to buy in both positive and negative directions. By examining each influence it is possible to offer suggestions on how to exploit the effects better and create more engaging microtransactions. The recommendations are fitted into two categories for key points that relate to the assets themselves and to general game design that facilitates microtransactions.
In a trade situation consumers look at the value proposition and compare expenses to gained utility. The utility of virtual assets is, however, usually confined to a single game, since it cannot be transferred from one game to another.
Most virtual assets in current games are actually rented, rather than bought, and this means that the consumer has to compare the expected gained utility within the time frame of the purchase. Because the future use within a set time limit is uncertain, this can cause some annoyance, as seen for example seen in this quote:
"I find it kind of annoying that when you rent items it is in real time, not in-game. So if you rent an item for a week and then only play twice a week then you only have the item for four or eight hours." (Peter)
Games encounter this very product-specific problem. Consumers obtain goods that have a physical presence in the game world, a sword for example, but also realize that the virtual reproduction of the item is costless: there is in fact no logical reason as to why the developer needs the sword back. The clash can easily produce annoyance if the players believe that they have to agree to unfavorable conditions that only serve to maximize the developer's revenue.