With the emergence of social networks and mobile gaming, video game editors found new ways to extend their reach to new consumers. Free games slowly started to appear before flooding the market. This new type of gaming was followed by a new economic model: the “free-to-play and pay-to-win” system, based on microtransactions.
(Picture: www.pexels.com, edited by Alexandre MOUREY)
The revolution of mobile and social gaming
Social networks and mobiles appeared roughly at the same time, in the middle of the 2000’s. Tablets followed less than a decade later. Studios quickly started to develop new games for those new supports. This new market has a big advantage as it reaches to a huge number of potential consumers – billions of them.
While games can be quite expensive on home and handheld consoles (from $40 to $70 depending on the system), they usually are free on mobile phones, tablets, social networks, and even personal computers (PC). Games such as Angry Birds (2009) or Candy Crush Saga (2011) should ring a bell to most people, even to those who do not possess a Facebook account or a mobile phone.
The emergence of micro-transactions
Free games came with a counterpart: microtransactions. As the name suggests, a microtransaction is a business model that allows users to purchase virtual goods with real money via micropayments. It serves as a source of revenue to the developers of the game as they release their product for free. Free games featuring such a system are often referred as “freemiums” (a portmanteau of “free” and “premium”). This system was inspired by other business models (getting a better or faster service for more money).
The pay-to-win part of this business model is more controversial. Indeed, many games use this system to their advantage but to the detriment of the players. For instance, games may not allow their users to play if they don’t have a certain in-game resource (energy in Candy Crush Saga or Farmville). In the case when the player doesn’t have enough of this resource , two options are offered: the player can wait for the resource to replenish or can spend real money to buy virtual goods that will fill the resource back. Most of the time, a long and/or difficult alternative is given to the user (waiting, training, asking friends or “farming” for a certain item, etc.)
The expansion to traditional games
If microtransactions first appeared on mobile and social video games, it is not the case anymore. More traditional gaming systems now welcome games featuring microtransactions. The most recent and impressive example is Konami’s AAA-game (high budget game), Metal Gear Solid V: The Phantom Pain (developed with a budget of $80M). The game being sold at around $60 (retail price), players were surprised by this decision. Once again, it is possible to get the in-game resource by login in the game daily, but the amount is ridiculously small compared to what users can buy.
It is possible to understand that independent studios may need another source of revenue, especially when they release their games for free, but it is harder to understand when it comes to massive studios. It is still unknown if AAA-game developers will keep microtransactions in their new products, but players already expressed discontent.
Alexandre MOUREY (@AlexandreMourey) is studying law and e-business in Strasbourg, France. Passionate about new technologies and video, he participates to several projects on the Internet, especially with his association FFL Production.
