Everyone is jumping on the microtransaction bandwagon, and why not? It’s proving to be quite successful for MMOs, social games, Facebook applications, and even mobile applications. For someone researching microtransactions, it is completely overwhelming to do research online. There is so much “do this, do that” but not enough education about what mistakes NOT to make.
Be Cautious Mixing Oil and Water:
For AAA MMO companies, it’s hard to jump feet first into the microtransactions pool. It’s scary to let go of the concept of a conventional subscription model, because it’s “tried and true”. The fact of the matter is – you’re not the only MMO on the block anymore. If you have your eyes on big numbers, you better remove every barrier to entry you can possibly find. Don’t try to do both subscriptions and micropayments. Why not?
- It overcomplicates things, for both you and the users. All of a sudden you have conversion to subscription and conversion to micropayments to worry about. You have two candies to dangle over the baby. Be confident that you can make a fun experience that will entice people to pay without the comfort of a monthly fee.
- Freemium games are about giving players alternate ways to give you assets. Either financial assets or time assets. If you’re gating content behind a subscription fee, that’s less game that people get to experience that will entice them to spend the oodles of money on small purchases that they want to spend.
- Microtransactions purchases are far easier to justify when the game isn’t already costing you money. I’m unlikely to spend more money in WoW on a sword of uberness because I already spend $14.99 a month. The market isn’t ready yet to move beyond the perception of greed. Charge them money without costing them. You figure that out.
- You should be trying to pull as much microtransactions money out of players as possible. Your goal should be to make more money in microtransactions than you do in subscription fees anyway. Why? Because subscriptions have a cap. If you have 1,000,000 users and 5% actually pay you a subscription fee (as is the standard) then you are hoping to suck money out of ALL OF THE OTHERS than you’re not monetizing with a sub fee.
- Waste of development efforts. If you have a subscription fee and you’re gating your free users from accessing content unless they pay it – you are wasting all of that development time and content maintenance for something 90%+ of your audience will NEVER SEE. Your time is far better spent on items and assets that benefit all players and encourage all players to pay you.
If you have to do this, just keep in mind how tiny your actual subscriber base will be and plan your mechanics and content around that. They can be the elite few, but don’t give them development time worthy of your userbase majority. You’re better off making a conventional subscription game with a demo with a lot of promo around it.
Don’t macro your microtransactions
Facebook gifts are successful because they are $1-2. I keep hearing about microtransaction purchases that cost $10, $15, even $20 in various games and that is more evidence that the AAA market isn’t fully understanding or embracing the concept. You want your players to buy a ton of cheap purchases and not even notice them add up. You want them to justify $1 here and $1 there. Take iPhone apps for example. People are gawking right now at $4.99 or $9.99 apps, though it’s hardly more than the $.99 or $1.99 apps. But once the number gets above a dollar or two you stop and think about making the purchase. Bad juju there. You can let the players give you money in larger quanities (the virtual “wallet” concept) as it reduces transactions fees on you every time a payment goes through
Quit blurring the lines between free and paid content
If you opt to go with two currencies, It needs to be obvious to the players what is purchasable with a paid currency vs. a free currency. Unique branding for each currency, maybe separate user interfaces, separate types of items. One thing you don’t want to confuse players on is giving you money. Make that clear as day.
Stop charging for base items.
Look at the market and do some research here folks. If you have addon services, provide the base for free. Give every player a free house but charge the heck out of them on furniture and accessories. Give everyone a free hat, but charge them for the uber pink one. Every player should have the item to be attached to and want to improve it to be like their friends or to watch their personal stats go up. Facebook applications are successful because of this. They entice you by giving to you, not gating you. This is why gifting is so huge – because you have a illusion of personal success when you achieve something for free and can add it to something you already own. You get attached to that concept of ownership (maybe it’s a farm, or an aquarium, or your mafia) and you want to spend money to better it. It’s screaming for your attention, it needs your TLC and gentle touch. And you’ll pay $1 several times over to give it to them.
What other failure points out there do others notice? Comment away.
Tami Baribeau is the Associate Producer for Metaplace, Inc, currently working on Island Life. She is also the Lead Editor of feminist gaming blog The Border House, and the National Facebook Games Examiner for Examiner.com. She can be reached on Twitter or by email.
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i sooooo cannot comment for real on this. you are a doll for not calling people out and pointing fingers while keeping the advice pretty general. i’m pretty sure i would rage a hole right through lots of folks’ sacred cows.
/sigh
m3mnoch.
I agree with a lot of what you said. However, I think you are taking micro too litterally. A $20 (or even $50) transaction is MICRO in comparison of the whole revenue stream for a single game. That is where the term originated (not because the transactions were ever small couple’o'buckers).
Yes, there needs to be enough $1-$2 purchases, but if that is ALL you ever stick with, you are losing out on a TON of people willing to spend more. Raph made this point not too long ago and I agree 100% with what he said then (I just can’t find the link).
My number one complaint with microtransaction games is that some are just god damn confusing. RoM, outside of a mount, was tiring to figure out and prevented me from ever spending money (I was always holding off thinking I would get X for free and pay for Z later). Also Free Realms didn’t get any money from me because I was lost between figuring out if I just needed to pay a sub or just float for free and pay for tit and tat here and there. DDO is OK, but still confusing, especially considering a lot of what can be bought can be gotten for free and it isn’t very clear.
Right now, I prefer Battlefield Heroes model, which is actually a dual currency system. Pay for the good stuff, like UNIQUE character custimizations and non-game-balance-affecting boosts. While they have an in game currency (VP) that is earned via playing and allows you to purchase the BASICS like weapons and healing widgets.
Heartless, do you have a source on the origination of the term micro as it pertains to this? I find it hard to believe that a payment larger than a subscription fee could ever have been considered a micropayment.
http://en.wikipedia.org/wiki/Microtransaction
That is where I pulled my understanding of the term from. For example, you buy a “bus card” for $20 and use it for 20 rides. Each transaction is a micro of the whole.
Extrapolated to a game, you pay $20 for X, but chances are you will use X everytime you log into the game. Or you pay $20 for 100 game points, which is a more common method, and then spend those 100 points on stuff in game. Yes, there are some bigger purchases out there, but I don’t believe they break the definition and I maintain they are vital for the models success.
I should add that I did do fairly well in my economics classes in college as well. Not to take anything away from Wikipedia
The first part is correct. The micro part isn’t the $20, it’s the $1 swipes for the boss.
I think you’re incorrect on your extrapolation to games, however. $20 for 100 points, yes. But it’s the spending 10 points here, 10 points there that make it a microtransaction. If it were $20 for 100 points but you only have the option to buy 100 point items, it wouldn’t be a micropayment anymore. It’s not a micropayment to sell adventure packs for $19.99 a piece. Those are add on services, but aren’t a microtransactions model.
This is how all the big microtransactions giants work. IMVU, Gaia, Habbo, Maple Story, Facebook apps, etc.
boss = bus. I’m dumb.
i think you guys are technically in agreement — just confusing the currency terminology.
when cuppy says “I keep hearing about microtransaction purchases that cost $10, $15, even $20 in various games” she means $20 worth of the virtual currency being spent on a single item at one time.
heartless hears “$20 worth of the currency being purchased at one time.”
totally different. the microtransaction part isn’t about loading your wallet with virtual currency. it’s the ability to OPTIONALLY spend a small amount of what’s in that wallet on a single item. the game, therefore, supports “microtransactions.”
just like each time you get on a bus, you’re spending a micro amount of your entire bus card.
initially loading the bus card was NOT a microtransaction. it’s a currency exchange. loading your virtual wallet is NOT a microtransaction. it’s a currency exchange.
and if you blow all the cash your wallet at once on a bunch of crap? well… the game still supports microtransactions, you just don’t.
m3mnoch.
Thanks m3mnoch, that’s what I was trying to say.
Agreed
Nexon breaks a lot of the rules in this post though, and it’s one of the most profitable F2P companies out there.
-it charges $10-15 US for a lot of things, and people buy them, because even at a higher price they make the purchase great value.
-they don’t offer free basic content. You want a pet, you need to buy it. This forces people to choose to take the hit performance-wise or drop $10. Free pets or basic things allow players to not spend money, because a lot of f2p players will settle with basic functionality. If we are talking about cash shop purchases, the key ones, like mounts especially won’t see basic models in a lot of games.
-they “mix” subs and microtransactions. Technically its not the case, but what they do is create basic support services that rotate monthly and expire while providing a lot of useful content. The only difference is you can not pay for the support services and still enjoy the game, but they mimic the sub model, even to the point of giving a free “month” of support content to newbies.
Other games do similar I think, because of timed content. If you have a pet that experires in seven days, it’s like a sub. If you buy it and don’t play the full seven days, you get shafted as much if you pay for a sub and don’t play. Even more I think, because games like to put nasty little penalties like locking the inventory that you pay for if you let it expire.
I think yoru advice is good for more of the optional enhancement stuff they stock item shops with, but I’m betting F2P games make their money more on the big purchases than nickel and dime ones. A lot of people will buy a pet for $10, not as many will buy combat potions or temp items for a $1-3.