For those unaware, microtransactions are simply defined as a small transaction made online. One industry that utilizes this practice most notably is the gaming industry. Microtransactions in the gaming industry began as a much less prominent concept, that seems to have changed recently. Microtransactions in gaming originated when online games featured the ability to buy skins to change the appearance of characters. These were featured in well-known competitive titles that already had a price of $60 on release, and microtransactions only made up a small portion of profits. However, things began to really accelerate when mobile games gave their take on microtransactions. When it comes to apps and games, most are free or only cost a few dollars. Therefore, the microtransactions are virtually the entire source of income for these companies. These payments in apps directly affect gameplay via powerups for purchase, many of which essentially translate to an automatic win for a level. Gaming is already an expensive hobby, most games costing $60 in addition to controllers, consoles, and TVs. In the short run, most games would be cheap for a consumer, but any game that someone plays over a long period of time is meant to be more expensive in the long run. Many one-time use powerups cost up to 5-10 dollars alone, and are meant to be bought on a regular basis. This is problematic in competitive games, as there’s a need to pay up in order to keep up with the rest of the playerbase. Some games even feature these huge advantages along with the $60 title. For more information, read the full article below:
https://hivelife.com/microtransactions-in-games/
Everyday economics from the University of Puget Sound