A Beginner’s Guide To Microtransactions

V-Bucks, FIFA Points, Gems, skins, and Donuts. Confused and scared for your wallet? Don’t worry, you have come to the right place. This article defines what a microtransaction is, the most common types of microtransactions (based on the author’s personal experience), and a short overview of ways game design can be influenced by microtransactions.

Due to the ever-changing nature of video games, some of the information contained within this article may have changed since its publication.

What is a Microtransaction?

For the purpose of this article, a microtransaction is any paid for item within a game that is not a substantial expansion of the game (e.g., added story content) and is not included in the price paid up front (if any). Games that are free to play and contain microtransactions are often called ‘freemium’ titles due to their reputation for luring players in with no up-front cost and then trying to sell microtransactions. Do not be fooled by the prefix ‘micro’ in microtransactions; microtransactions can range from <£1/$1 to >£50/$50 (Figure 1 and 2) and the content they deliver is often open ended to allow for more purchases. It is no wonder, then, that EA reported 29% of their net revenue was generated by Ultimate Team modes in the 2021 fiscal year. Credit to Eurogamer for bringing this to the writer’s attention. FIFA Ultimate Team is an example of one of these Ultimate Team game modes. Players open ‘packs’ that contain a random assortment of players. These packs are obtained through the purchase of ‘FIFA Points’.

Understanding what microtransactions are and the ability to differentiate between types is crucial for being able to judiciously navigate the modern gaming landscape. This understanding will hopefully enable the reader to distinguish between games that encourage excess spending and those that provide a more balanced experience. Of course, microtransactions are there to be bought. However, certain game designs facilitate spending more than others.

This article aims to inform parents, people new to modern video games, and long-term players about the most common types of microtransactions encountered by the author (and what they are) and how psychology is used to inform game design and increase the chance of a player purchasing microtransactions.

Types of Microtransactions

Microtransactions in contemporary video games can (and do) take on many forms. Sometimes a game can be argued to be designed around microtransactions and others simply offer an engaging gameplay loop whilst selling cosmetic items. Anyone who has played a free to play game in recent years (especially on mobile devices) is likely to have encountered at least one type of the microtransactions listed below:

• Consumable: Any item that is used (or consumed) upon use and is not returned to the player.
• Loot box: A ‘box’ that contains a random assortment of items. The player does not know exactly which item they will receive. Items are often placed on a rarity scale with players having lower chances of receiving items of high rarity. Loot boxes take on many forms from eggs in Pokémon GO to card packets in FIFA.
• Cosmetics: Anything that changes the look of the player or in game items and does not affect gameplay.
• Physical goods: This may be controversial to some given their physical nature, but some physical goods are used to unlock in game items that would not be made available to players otherwise. Whole games have been based around this idea in the ‘toys to life’ genre (e.g. Lego Dimensions and Skylanders). Nintendo’s Amiibo are another example.
• In game currencies and time: It is easier to address these two types together as they are often inextricably linked. Timers are common in building games. For example, the Simpsons Tapped Out, a game about rebuilding Springfield, does not allow players to place buildings immediately. Instead, they are locked behind a real-world timer. The player has two choices: wait or use donuts (the game’s paid for currency) to skip the wait. This paid in game currency can be used to unlock other in game items, but the timers clearly encourage the purchase of this microtransaction. Timers can also take the form of limiting the amount users can play. This is often not a real time limit (such as being able to play for 30 minutes a day) but takes the form of a consumable that allows the player to complete certain activities. Angry Birds 2 is one example of a game that employs this system, granting players five hearts. If a player fails to clear a level, a heart is lost. Lose all five and the player is prevented from playing until they obtain more. Hearts refill at a rate of 1/30mins at the time of writing.

As the discerning reader will notice, the microtransactions outlined above are all open ended. New cosmetics can always be added, loot boxes encourage repeat spending, timers can be reset, and physical goods manufactured. These are all made possible by the ability to consistently deliver updates containing these items via the internet.

Microtransaction Driven Design

Torulf Jernström gave a very interesting presentation titled ‘Let’s go whaling’ in 2016 at Pocket Gamer Connects 2016. A ‘whale’ refers to a player who spends large amounts of money on microtransactions. The content of this presentation is very useful for understanding how microtransactions can influence the design of games. Torulf highlights how skill-based games are bad for monetisation and should be avoided. This is because players can simply become better at the game and avoid paying. He suggests progression systems based around grinding or paying are better as they are more likely to encourage in game purchasing. Loss aversion is another mechanism Torulf gives to drive purchases. Torulf uses the example of a level-based game that threatens to take away any items collected in a level if the player fails. The player can either choose to lose all that they have just collected or pay to continue. He also argues that both progress and consumables should be sold in games because players who cannot progress any longer can still be sold consumables. Finally, he discusses the importance of creating an in game social climate in which spending is socially acceptable to make players feel at ease when spending. Hopefully this brief summary of Torulf’s presentation has shown the reader that psychologically informed game design can be used to encourage players to purchase microtransactions. The reader is encouraged to watch Torulf’s full presentation on PocketGamerbiz’s YouTube channel as this paragraph was just a brief summary.

Some types of games lend themselves to monetisation more easily than others. The use of timers in games are easy to monetise. A good example of a game that uses time-based systems but does not monetise them is Animal Crossing: New Horizons. Animal Crossing prevents users from progressing using timers (although these are not shown to the player like they are in some games), giving players no way to skip them. The Simpsons Tapped Out also prevents players from progressing using timers. However, those playing The Simpsons Tapped Out can choose to skip the timer using a premium in game currency. This fundamentally changes the game. Some players will progress further than others in the game within the same time period as a result of spending. Systems like this can lead to something referred to as ‘pay to win’ games. Pay to win refers to games which facilitate the progression of those with deep pockets faster than those who spend little or nothing. This is unlike Animal Crossing in which all players are bound by the same time limits; a building takes a day to build for all players (unless the system clock is manipulated but that ability is available to all players.)

Another way games can be influenced by microtransactions is locking content behind physical objects. The type of content unlocked can vary and, depending on the game, can be argued to be DLC rather than microtransactions. However, Nintendo’s Amiibo are able to unlock in game content and do not unlock substantial story/gameplay content. For example, Nintendo have released an Amiibo that is compatible with the newly-released The Legend of Zelda: Skyward Sword HD. According to the product description on the My Nintendo Store, this Amiibo allows the player to create checkpoints whenever and wherever they are in the game. This feature is not available to player’s who do not own the Amiibo, creating a slightly different game experience. This fits the microtransaction definition given at the beginning of this article as no substantial story or gameplay content is unlocked via this Amiibo.

Conclusion

This article has tried to stay away from arguments for and against microtransactions. That was not its aim. Hopefully, the reader will have been informed about some of the different types of microtransactions that can be found in modern video games and how these can affect game design. A knowledge of these can be used to spot when games are designed to facilitate spending and how spending is being encouraged. Hopefully, this new understanding will help the reader to make informed decisions about purchasing microtransactions.