Essay Sample on Growth of Microtransactions - A Response to the 21st Century Gaming Industry

Introduction

Initially, the gaming industry used a strategy whereby one had to pay for the entire game to access it. This strategy, however, led to the overproduction of the video games and changed preferences in the video market. The gaming industry had to adopt a new approach at the beginning of the 21st century to reduce the increased revenue loses and to maximize customer satisfaction (Lizardi, 2012). This issue, therefore, led to the introduction of the microtransaction approach that was to be used to increase video games revenue and sales. Microtransaction is a strategy in which the videogame owners perform the partial videogame content sale instead of selling the entire game to the user. The video game buyers tend to use microtransactions to unlock various features or enable the user to gain special characters, abilities, and contents.

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In most cases, the costs of the microtransaction tend to cost or range between $0.99 to &$ 99(Lizardi, 2012). There are usually for main types of microtransactions, which include; first, the in-game currency, this is a microtransaction in which, the video game uses a fake in-game currency that the players can redeem.

In most cases, the video game industry uses these currencies to hide the actual value that the user is supposed to pay. Secondly, random chance purchases, also referred to as the loot crates, are considered as microtransactions in which the player does not know precisely what is in the box, but he or she is tempted to open. Thirdly, thein-game items, these are the microtransactions that enable the purchasers to have an advantage in the game. For instance, the world of war crafts offers game purchases such as mounts and pets to encourage the player to continue playing. Fourth, expiration, this type of microtransaction is used to promote the game used to make purchases to continue using the video game. This paper intends to discuss the issue of microtransaction in the video game industry.

Literature Review of Micro Transactions in the Video Gaming Industry

The video game industry is considered to have flourished in the 1980s after the introduction or the influence of the tremendous innovations in the ICT sector (Wallace, 2014). The success of the initially developed video games led to the expansion, development, and growth of the video game industry until the twentieth century when the industry started to experience revenue challenges. These revenue challenges were brought about by the overproduction of the existing video games and the reduced number of videogame buyers. The industry had to adopt the microtransaction strategy to ensure the video games retained their market value. When using the microtransaction strategy, the video company usually offers a trial period of several weeks, during which the application is free. After that, the video game company begins to charge the game user. The main idea of this strategy is getting users accustomed to the application in a way that influences them to pay for the product. The reason is that it will help to control the situation. A study on the United States video games market concluded that the implementation of the microtransaction strategy had increased the revenue of the gaming companies. For instance, between the year 2010 to the year 2014, the microtransaction revenue in the American video gaming industry increased from approximately $98 million to $574 million(Golynchev, 2019). Another report indicated that video games using the microtransaction strategy recorded the highest revenue in the year 2015. Some of the games that earned the highest income in the year 2015 include, including the clash of clans and game of war (Tomic, 2017). Various scholars have indicated that the implementation and breakthrough of the microtransaction strategy were triggered by two main factors that include the utilization factors and the application domains. Some of the utilization factors that contributed to a faster micro-transaction breakthrough in the video games market include, first, increased production and use of mobile phones and other portable devices that usually depend on the mobile phone operating system. Previously before the introduction of mobile phones, most video games in the market were considered to be expensive since they were not easily accessible to the population. For instance, in the 1980s, computer games ranged from $30 to $60 per game(Ahmad et al., 2017). However, after the introduction of mobile phones, the games now range from purely free, freemium to premium games. Secondly, the more extensive commercial use or application of the internet has helped to enhance the publisher's and user's relations. The internet plays a crucial role in facilitating the sale and distributions of games directly to the end-user and also serves as a valid payment channel since most of the transactions are performed online. Thirdly the revenue instability for the video game publishers from the year 2003 onwards (Ball & Fordham, 2018). Consequently, the application domain facilitated the breakthrough of the microtransaction, mainly by giving room for additional features. The features can also be easily accessed through microtransactions. For instance, the application domain can hold the cosmetic features that can only be accessed through microtransactions.

According to research, the microtransaction execution is mainly integrated into online services, whereby it is distributed to the customer (Tomic, 2017). When using mobile games, microtransactions are done through various applications such as the app store and Google play. While when it comes to the computer games people, use the digital distribution platforms to conduct the microtransactions. Various scholars have also indicated that the implementation of the microtransaction strategy has had significant effects on the video game industry. Some of these effects include the economic impacts that occur as a result of the video game players taking a long time before they decide the specific game to buy. Ethical problems are mainly determined by the degree, manner of moral payment, the availability of purchases, and the social effects. These are the effects that the microtransactions usually have on the subculture of the video game players.

The Social Technical Perspectives That is Dominant in the Chosen Frame

The social, technical perspective that is dominant in the frame is the microtransaction to improve the game industry, and the gamers experience through introducing new experiences in the video games, for instance, introducing rewards that the player must claim through making special payments. The aim of this improvement is to ensure that the technology meets the needs of the user and to increase the revenue that had initially been overwhelmed by the overproduction of the video games(Tomic, 2017). This shows that both technology and human being are not separable. The technology has to suit the needs of a wide range of consumers or users to attain the needed revenue, while human beings have to choose the technology that suits their needs effectively in order to get the satisfaction that will motivate them to make the microtransactions. The assumption that has been made in this public disclosure that resulted to the finding on social, technical perspective include; first, to increase the revenues obtained from the video games, the video game industry had to implement the microtransaction strategy when selling the video games to the customers. This strategy first allows the customer to start using the game application to determine whether it suits their needs. This also tends to be a way of motivating the customer to start paying for the game in the form of getting rewards and upgrading to new levels. Secondly, the game users have to depend on or use available media technology so that they can access the games that feed them; for instance, most people who have access to the video games are using mobile devices that enable them to download or access the games easily. These two findings show that human and technology in the game industry is inseparable.

The Future of Micro Transactions in the Video Game Industry

Since microtransactions have become quite impactful within the field of videogames, the existence of traditional progression systems that pave the way to unlock the items based on game challenges other achievements have decreased significantly. However, there lies a dire need for the companies offering the videogame micro-transactions system services to embrace standard progression systems. Such systems are deeply rooted in a wide range of benefits that the community at large would find it beneficial to abide by it (Davidovici-Nora, 2014). One of the advantages is the improved gameplay. Secondly, there ought to be more incentives which act as a motivating factor towards the gameplay. On the third account is the embracement of a stronger tool that enhances healthy community building. Finally, it is the portrayal of a better and positive public image regarding the gameplay.

At the point when micro-transactions are executed in interactivity, two significant issues happen. One is a compensation to-win condition. Players who empty full measures of cash into obtaining plunder boxes will have a substantial bit of leeway over players who decide to play through the game typically. One of the most exceedingly awful instances of this correct currently is Halo 5's Warzone mode, where players can purchase REQ packs and open all the significant level things a lot quicker than ordinary players (Svelch, 2017). The regularly proposed answer for this is to change the intermediary, so players are just coordinated with players with a comparable stock level. In any case, this is the place the subsequent issue lies. Matchmaking frameworks, as of now, need to guarantee that players are set with the individuals who are exceptional expertise levels. By including another channel for thing movement, it turns out to be almost outlandish for the framework to decently coordinate players. This is the reason in games this way that an individual would regularly be coordinated against a wide assortment of players rather than ones at a similar level as you.

By making opens attached to arriving at an achievement or finishing an assignment, be that as it may, neither of these issues exists. Since there's no real way to swindle the approach to better items by sustaining the game micro-transactions, the movement framework is exclusively affected by a player's expertise and level (Osathanunkul, 2015). For instance, Battlefield 1's opens are earned distinctly through execution in-game. In this sort of framework, it is difficult to pay to win (Tomic, 2017). This likewise makes matchmaking frameworks significantly more proficient. Since players have all the more dominant things by being profoundly talented or encountered, all the relational arranger needs to do is bunch players of comparable aptitude levels against one another, and they'll all have comparative arms stockpiles.

In the case whereby a videogame ends up creating an environment in which one endeavor to earn points and items, there is an increased incentive to continue playing up the game. Moreover, when the unlocks get based on the measures of system challenges, milestones, and achievements amongst other forms of motivation, players would thus express good feelings by having overcome the underlying obstacles that keep obstruct them from attaining the specific targets and goals (Flick, 2014). In this case, the rewards would not be given based on being lucky, but on the reactive response to the player's achievements.