Redefining MMOs: The massive money of microtransactions

Let's face it - microtransactions are big business. Nexon has posted a 35% increase in revenue this last July. Large companies like SOE and Cryptic Studios have added cash shops to their games. It appears that the world has a growing appetite for little bites of gaming content goodness. The market now is turning those bits and bytes into the MMO equivalent of the candy bar - with profits that are starting to climb towards the candy heights as well.

The honest truth is that we've been shifting more and more towards the idea of microtransactions as a culture, not just as a genre. Sure, we've always been about getting more bang for our buck - who isn't! But the fact is that there were no structures to distribute entertainment as effortlessly and cheaply as we can get it now even just a few decades ago. The proliferation of personal computers, the Internet, and other advances in technology have turned us into a society that loves to consume only what it wants, when it wants, from almost wherever we want it. Considering the overall societal shifts, it only makes sense that our favorite type of games are now going where the money is.

What are they all about?
Ultimately, there are two primary types of MMO microtransactions. There are the ones that are fluffy, extraneous, unnecessary items. These are the vanity costumes, pets, armor dyes, and things like that. Nothing in your game is really affected by these items, save perhaps for your personal visual gratification and an ever-expanding bag. Alternately, we have the stuff transactions, which are items that actually affect your game. These are mounts to get to and from, experience potions to help you level faster, on down the road to armor, weapons and more. In some games you have no option but to buy these items if you want to progress whereas in others, you are able to grind and achieve items similar to the ones you see in the cash shops

The idea is, in these types of games, to get you to part with your dollar in the name of making your experience faster, easier and more fun. Whether or not this is acceptable to you is entirely based on just where you come from, and just how used to microtransactions you've become.

Microtransactions everywhere!
If you look around, you'll realize that the concept of microtransactions is actually nothing new at all - it's just new to our games. Truthfully, we see microtransactions in our daily lives, and we never stop to think about them. Want to use an ATM that isn't run by your bank? You'll spend a buck or two to save yourself a trip. Standing in line at a store and want something sweet? You're not going to buy a whole bag to satisfy a small craving. Instead, you'll drop a buck and get one candy bar. Don't agree? Let's look at some online options to illustrate the shift.

You're surfing around the Internet and someone plays a particularly catchy song. It gets wedged in your head. After spending a few days of just hitting repeat on the YouTube video with that song in it, you finally break down and decide you have to have it. So what do you do? Load up iTunes or the equivalent and buy that one song. Gone are the days when people went to the music store and bought a whole CD which was 95% crap and 5% music they actually cared about. Now we purchase content we want, or we skip it.

The same goes for Xbox, PS3, and Wii. Want a new map to play in multiplayer? Looking for a new game? Need some new tracks for Rock Band? How about a Big Daddy doll for your NXE avatar? Drop some money and you can have it right now. For a few bucks more a month, many local cable companies will let you get a DVR as opposed to just a cable box. Bang - TV on demand for just a small fee. Have an iPhone? Grab an app to help you figure out anything from dinner reservations to the detailed fonts on magazines - some free, some not.

Microtransaction vs Macrotransaction
We hear a lot about microtransactions in the market, (and a nearly equal amount of nerdrage about them) but there's also a gateway drug at work here - the macrotransaction. This is the way microtransactions are slowly becoming more palatable to the traditionalists who absolutely cannot stand the idea of RMT. (Primarily your Western markets.) Macrotransactions are the costume pack at $10, the $25 server transfers, the $30 faction changes. We drop as much on some of these transactions as we would to purchase a brand new copy of the game and simply (using World of Warcraft as the example) drag-level a new opposite faction character to level 60 by using refer-a-friend triple experience, while scoring a free month of game time for the primary account.

Of course, as it is faster to just pay the $30 and switch over, many will opt for it without batting an eyelash. Even working at a minimum wage job, $30 is what - shy of 4 hours of work? You could even argue that leveling to 60 could take longer and be infinitely less fun, depending on your point of view. That said, we'd bet that if you were to break down a $10 costume pack into .99 increments and offer it piece-by-piece, many MMO forums would light up like wildfire with outrage at the idea of microtransactions coming into their games - especially anyone who had already purchased the full pack at $10.

Generationally speaking
So really, what does it come down to? How do these ideals divide? This is still a new spin on our beloved industry, but I've got an idea based on talking to people coupled with my own nerd-on for cultural anthropology:

  • Boomers & Beyond - Many are elder geeks who have played on networks where you paid for your online gaming by the hour, so a subscription is a pretty solid deal. They're not sold on microtransactions, preferring the flat-fee. None of them are really interested in rushing back into expensive bills for paying by the hour access, so they eye microtransactions warily.
  • Gen-X - Gen-X was raised on Cable TV and cartoons based on merchandise. Sure, you could get free network content, but let's be honest - the subscription stuff on cable was cooler. Gen-X grew up with rental storage, rental furniture, and rental movie stores. Subscriptions are in this generation's blood, so it's not a surprise that many of this generation feel that subs are the best way to go.
  • Gen-Y - There was life before the Internets?! This generation has grown up with more and more information becoming available daily - and in bite-sized easy chunks. With that said, just about everything they know has been touched by advertising. Split between worlds, they accept that free content can range from "meh" to top-notch but know they'll generally have to watch commercials to get the good stuff. That's OK with them - the commercials have always been there anyway. When they get tired of it, they just buy a subscription to something and enjoy the ad-free silence.
  • Millennials - Still young, the Millennials are getting more and more top-notch content for free. How this will change the genre remains to be seen, but with games like Free Realms and services like Hulu in their entertainment space, and being raised on iTunes and Nexon Cash cards at 7-11, I've got a sneaking suspicion this next generation will expect more for less - and get it.
These days, the above lines are blurring more and more. By way of example, I'll point to myself. Five years ago, if you had talked to me about buying some type of in-game currency or item, I'd likely have snarked your face off. I've since purchased a horse in Runes of Magic for $15, and have even traded one PLEX for ISK in EVE Online to pad my learning curve while I blew ships up right and left. Another example I can think of is Tipa of West Karana, who is quite possibly one of the most switched-on ladies I know in terms of the MMO genre. Tipa is a devoted and open fan of Wizard 101, which is a freemium pay-as-you-go model. Bite-sized content, as you want it.

In the end, it all comes down to what makes that game fun for the end user. As more and more companies figure this out, more and more companies will segue into models that offer more bang for less buck. From fluff to stuff, sooner or later, every MMO you know and love will have some form of extra value-added service. Whether it remains something larger (and perhaps thereby more acceptable to you) like a server transfer, or something smaller and easier to pick up without buyer's remorse like a potion or armor dye, these transactions - both micro and macro - are here to stay.
This article was originally published on Massively.