What are Microtransactions in Video Games?

With the recent controversy surrounding Diablo Immortal and their unethical monetization tactics, I thought this might be a good time to talk about Microtransactions: the great, the good, the bad, and the ugly.

What are Microtransactions?

Microtransactions in video games allow players to purchase in-game items for real-world money. Why would a player pay real dollars for something virtual? These items could be something that makes the game easier, enhances the player's appearance, or gives the player a unique ability.

What was the first game with Microtransactions?

The first notable game with microtransactions was when Elder Scrolls IV: Oblivion sold horse armor in 2006. While it did not go over well at the time ($2.50 for horse armor was deemed too much, and I actually agree), it set the pace for future microtransactions.

Fast forward a few years, and we have GTA5, one of the most successful microtransaction models of all time.

How much money has gta5 made from microtransactions?

In 2020, GTA5 recorded revenue of 2.5 million dollars per day, averaging out to $1,733 a minute.

The Great: Rocket League

Rocket League has a great monetization strategy since launching to free-to-play with their new "Season Pass" model. Players have standard rewards they receive on the free model, but also have extra goodies for those who have bought the Season Pass.

Why is this a good model? Firstly, players still have to earn their rewards, paid or unpaid. Secondly, the stakes are clear. Earn a disclosed amount of XP, and receive a certain item. All players know which items are paid and unpaid, and it is attainable to reach those goals. Players don't need to invest 10,000 hours into a game to receive a certain item. Sure, it will take work, but there is no insane amount of grinding. Players also still feel the satisfaction of working towards a reward, but there is a clear delineation between the two. On top of that, the season pass is not determined by any time restraint. Buy the season pass, and you have access to all of the assets that you've already earned.

The Good: Fallout 76

While Fallout 76 has had its own controversy, one thing they get right is the Atomic Shop. Once again, paid items and in-game items are separated, setting clear boundaries for players. While Fallout 76 also has its season "S.C.O.R.E" board, these items are separated from the paid shop and do not intertwine. Why is this important? Grinding for an in-game item that is not a paid asset means the expectations are clear and within reason. Using psychology to give players the illusion that they can obtain an item just through play when in reality it is paid is player manipulation and usually just ends up making players feel defeated and angry.

The Bad: Candy Crush

Candy Crush is notorious for its dark patterns and use of psychology to make players spend money on its boosters and in-game currency. Candy Crush uses dark patterns to make its game highly-addictive, and as a result, highly profitable.

While Candy Crush is a mobile game and not something many pc and console gamers play often, the patterns are important to recognize for the future of gaming and monetization. Since the model has been so successful, it's only a matter of time before these principles begin to start rearing their ugly heads in other mainstream games. Unless of course, players decide not to support and play these types of games.  

So, how do they do it? While Candy Crush has over 500 documented dark patterns, here are the notable:

• Timed rewards, ex: Play in this race and receive these benefits, but only in the next 20 minutes!
• Making levels intentionally very challenging so that you have to use boosters to complete the level or risk spend an inordinate amount of time.
• Showing limited deals to players who have just reached an in-game milestone. Ex: You completed 5 super hard levels, now we're going to offer you a limited time discount of 50% off our in-game currency!

The Ugly: Diablo Immortal

Just when we thought it couldn't get worse, Diablo Immortal releases as a free-to-play game, and people aren't happy. Diablo Immortal breaks all kinds of rules in terms of ethical monetization and dark patterns. Everything that Rocket League and Fallout do right, Diablo Immortal spins on its head. Firstly, Diablo blurs the line between paid and unpaid. All items can be attained through play, but are nearly impossible to attain without real-world money. Sure, you can play 10,000 hours to receive an item. Or, you can spend real-world money. That would be one thing, but here's where they really use dark psychology to take advantage of players: You don't know what you're paying for. Every time you purchase an item in Diablo Immortal, you're taking a gamble on what item you're actually receiving.

In fact, the Streamer Quin69 spent $10,000 on Diablo and didn't get even 1 legendary item.

A quote from War Games applies here: the only way to win is not to play.

Microtransactions and Player Experience

Microtransactions are a classic lesson in User Experience. Games are made to make players feel good. Games are made by gaming companies, which have an inherit moral obligation to not hack player psychology into spending their hard-earned money. If we don't have standards in place, what's the difference between gaming and gambling?

I think it's the intent here that matters. Adding microtransactions with no clear objectives on how to purchase is what puts players in a state of disarray. No longer is it, spend x and get x, it's "well, show us what you're willing to spend and we'll show you what we're willing to give." This is not e-commerce anymore. It's a freaking gumball machine, and most of the prizes are shitty.

Closing Thoughts

Gaming companies and players have a choice to make. Having been in corporate design and engineering for over 5 years at this point, I can tell you that tangible, trackable data will always take precedent over non-tangible metrics. The top non-tangible metric that's still highly important, however, is company reputation. Since these are businesses, profitability will always be at the top of that list, but players need to know this in order to make smart buying decisions.

I'm all for gaming companies thriving and being wildly successful, but there are ethical ways to thrive and make money without using dark psychology. With that, I hope this article helped you understand more about microtransactions and the user experience behind them. Let's make some ethical choices, woohoo!