Game Microtransactions 101: Free to Play
What Do Gamers Spend on?
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Game monetization has evolved from selling physical copies of games to the “free-to-play” model. Instead of paying upfront, these games make money through “microtransactions”, which are small purchases you can make within the game. This model has become incredibly popular, and many successful games, even the ones that are not free, today use it.
Microtransactions are purchases that players optionally make within a video game, using real money. These purchases can range from various items, battle passes, and loot boxes but can be divided into two broad categories:
- Pay-to-Progress/Win
- Cosmetics
Pay-to-Progress/Win
Pay-to-Progress/Win microtransactions are a type of in-game purchase where players can pay real money to speed up their progress through the game. Essentially, these microtransactions allow players to skip over parts of the game that they may find too difficult or time-consuming. Players can obtain better gear or upgrades for their character via these purchases.
Anything that can be purchased with these microtransactions can also be obtained by putting in the necessary time and skill in the game. Thus, players that make these purchases exchange time for real money.
Developers may intentionally design games to incentivize players to spend money. This can take a number of different forms, such as creating levels that are particularly difficult or time-consuming to complete without purchasing upgrades or boosts once the player is hooked to the game.
Some microtransactions might be considered more as pay-to-win than pay-to-progress as they might give players a significant advantage over other players; can include things like powerful weapons, extra lives, or experience boosts.
However, in a multiplayer PVP game, these microtransactions can create a sense of imbalance and unfairness in the game. Players who are unwilling or unable to spend money may feel left behind or frustrated by the experience.
Brawl Stars
In the game Brawl Stars, there are no pay-to-win microtransactions. However, there are pay-to-progress options that allow players to unlock new heroes faster than by playing the game without spending money. All heroes have an equal overall power, but they may have different styles, providing players with a range of options. Players can either spend hours grinding to unlock new heroes or pay to unlock them immediately.
Clash of Clans
Pay-to-win microtransactions enable players to accelerate hero/soldier training, construction time, defense period and more. A player can skip waiting/grinding time by purchasing microtransactions to accelerate the process. Purchasing microtransactions provides a very clear advantage over other players.
Rise of Kingdom
Diablo Immortal
Slotomania
Gardenscapes
Hay Day
Angry Birds 2
Cosmetics
Cosmetics microtransactions are a type of in-game purchase that allow players to customize the appearance of their characters or other in-game assets. These microtransactions offer no inherent gameplay advantage, but they do provide players with the ability to personalize their gaming experience.
Cosmetics microtransactions can take many different forms, such as:
- Skins or Costumes: Skins or costumes are cosmetic changes to a character’s appearance. These can range from simple color swaps to more elaborate designs that completely change the character’s appearance.
- Emotes: Emotes are animated actions that a player’s character can perform, such as dancing or waving.
- Weapon or Vehicle Skins: In some games, players can purchase cosmetic changes to their weapons or vehicles. These can include things like new paint jobs, decals, or other customization options.
Cosmetic microtransactions can sometimes be used as a way for players to show off their status or achievements within a game, and engage in social signaling. By purchasing rare or exclusive cosmetic items, players can signal their wealth or success to others, particularly in multiplayer games.
DOTA
Stumble Guys
Fortnite
Counter Strike Global Offensive (CS GO)
Final Words
Pay-to-progress/win and cosmetics are the 2 main microtransaction categories that players spend money on. The majority of games monetize through pay-to-progress/win whereas only a handful of very successful multiplayer games are able to monetize solely via cosmetics.
Web3 and open economies enable web3 game developers to add various utilities to these microtransactions. We will be discussing these in the next piece.
None of this is financial or legal advice. If you want Vader Research to consult with your team on web3 game economy design, reach out to Vader Research
