Tobold's Blog
Wednesday, March 18, 2009
The psychology of microtransactions

So I've been playing around with Bounty Bay Online for a while, on a so-called Free2Play server. As most of my MMORPGs up to now have been monthly fee based, it was interesting to explore the business model of microtransactions on these Free2Play games. So I decided how much money I would spend max, and bought 1,000 point for €30 in the Bounty Bay Online item shop. For the rest of the post I'll count costs in Euro cents, with one BBO point costing 3 cents.

In theory you can play BBO without paying anything at all. In practice the game company is doing their utmost to seduce you to spend points, and thus money, because they have to live of something. For example they are offering a very cheap starter kit for just 75 cents, which contains gear that improves your character and his ship, as well as a scroll which 5 times 1 hour doubles your skill point gain. As Bounty Bay Online is all about gaining skills, it is easy to get hooked on those scrolls. They cost 45 cents if you buy them outside the starter kit, so very quickly you end up paying 9 cents per hour if you constantly use them. Such "double points" scrolls are something I've seen in every microtransaction game I've come across.

Gaining skills is usually fast at low levels, and then gets slower and slower. Sooner or later there comes a point where you think your progress is too slow, and thus are tempted to spend money on faster skill gains. Besides the double skill scrolls there are potions with 100 charges for just 21 cents which refresh your energy, reducing the downtime between skill gains if you do something energy intensive like mining. Or for 60 cents you can buy a skill book with which you automatically gain skill for the next 6 hours without having to do anything. I haven't even tried out those yet, because to me that appears to pretty much kill the interest in the game. In a similar vein you can buy 10 million silver for 225 cents, which to me also appears to remove the interest of the trading part of the game. I thought the point was to do something like gathering or trading, and earning skill points and silver for that activity as a reward. Skipping the playing part and just buying the skill and the silver seems odd to me. But I guess there are enough people out there who want the reward without the activity leading to it.

The most expensive thing I bought, for 600 cents, is a basic bank functionality. Without paying anything you only get a local storage in your starting town. The bank you can buy for real money is accessible from every town. But even then you only get a relatively low number of slots and weight limit, both of which you can further upgrade in installments of 600 cents each, which quickly gets prohibitively expensive.

In Bounty Bay Online you can also buy repair kits for your ship for 45 cents, or first aid kits for you sailors for 45 cents, or first aid kits for yourself for 21 cents, each with 100 charges and useable instantly without restrictions. Which means that if you just spam them enough, it is really hard to get killed. Which is nice in PvE, but extremely unbalancing in PvP.

Apart from that there are gimmicks, like being able to ban another player from chat for 2 hours for 60 cents. Now that is an option I'd like to see in some other games. ;) There are also a lot of fluff items in the item store, like nice clothes without stats, or pets from rabbits to white tigers.

As Raph Koster explains, revenues from microtransaction games follow a power law. That is there is a large number of players paying nothing, and a small number of players paying a lot. If you don't set yourself limits, you could easily spend far more on a Free2Play game than on a game with monthly fee. But I do like the idea of having choices: I could play Bounty Bay Online on a monthly fee server, or I could play it for free, or I could spend as much as I want to advance faster and have ingame advantages.

Having played Magic the Gathering, I'm well aware of the traps involved in that, you ending up spending far more money than you wanted to. But then I have to wonder why most of us would consider it insane to spend $100 per month on a game, but find it totally normal if we spend 100 hours per month in a game, chasing after basically the same rewards. I certainly wouldn't be willing to skip the whole game and go directly to the maximum reward for some fee. But paying *some* money to advance faster is something I can live with, because I look at it as balancing the game between those who have a lot of time on their hand, and those who have less time but more money. Sad as it is, but most MMORPGs have progress based nearly completely on time spent in game, with very little contribution of skill, and somebody with a regular job and family simply can't compete against somebody who for some reason is able to play all day. Microtransaction games allow me trade money for time, but of course that only makes sense if the time I save is time that I wouldn't have enjoyed much playing anyway. So microtransaction games are frequently full of deliberate grind, to make skipping the grind more attractive. In the end I'd rather have a game which is fun all the time, so there would be no interest in skipping parts of it for money. I wonder if the only business model that allows that is monthly fees. Or will we see "9 cents per hour" business models in the future in the US and Europe, not just in Asia?
What exactly is the quality of the gameplay when you don't pay anything? And how does this change when you pay a typical amount, say spending 10 euro per month? Is it necessary to have "double skills" to advance in the game or can you get by without them easily? How much would having typical WoW parameters (such as level-up speed, regeneration speed, bank and carrying capacity, AH, guilds) cost?

It would be interesting to see what the revenues of micro-transaction games would be. My hypothesis is that profit'd be higher since every customer can buy exactly the game he/she wants. However, that only works if every customer knows which game he/she wants, and also does not take into account any social dynamics. What are your thoughts/experiences on this?
Peronally, I skip game where spending real money will give a benefit to players who pay. Faster levelling? More gold? No thanks, you can't keep up without paying gold that way.

Things that I consider to be ok to spend money on are the "fluff" items. A rabbit pet, being able to have a special haircut, dieing your clothes, a fancy mount,... Stuff that won't give you a benefit compared to someone who does pay. Else it's not about who has the most skill, it's about who spends most which is something I really dislike. If my character in WoW is a great super toon then it's because I'm skilled and put a lot of time in it, not because I just bought her whole gear set for $$$.
Except the guy over at the Greedy Goblin just proved you can pay a guild to give you epics, you pay them in wow gold, wow gold can be purchased for real money via RMTers. Hence you can convert Real $ into Gear. And that's to say nothing for just buying someone's account. And Honestly, and I know some people feel differently about this, but I'd much rather be giving my money to a company that produces a good game then to a bunch of guys who pay some other guys nearly nothing to essentially "Print Money" for them.

Lets take another example. I have currently in WoW an 80,75,74,71,70,66 and many other characters below level 60. When my friend and I recently decided to roll new characters I decided to pay for a new account so we could use the refer a friend xp bonus. We leveled 2 characters from 1 to 60 in around 20hours played. Basically I payed blizzard like $50 to level characters at 3x normal speed. And I'm ok with that. Time is money, and I could either spend an extra 48 hours playing content I've already done many times and have little interest in, or I could spend about 3 worth of work pay and save myself 48 hours, thereby getting to the content I care about.
@Xash: The only reason guilds are selling top-end raiding spots today is because all of the content is on farm status. No one was selling Nax 40 spots. T1 gear or Ony spots could be bought, because by that time most raiding guilds had both on farm. Gevlon would be running around in blues or starter epics in 2006, regardless of how often he used an auction house mod.

The problem is not "unfair competition."
This isn't a race and if a married person with a job and kids and responsibilities wants to compete with Ensidia (or whatever they are called) makes as much sense as that same man competing in the Olympics. That is, is doable but not by everyone.
Take any kind of hobby, from gardening to painting or collecting coins: the more time you invest the bigger the reward.
Even when mentioning skill, what is skill without practice?

People should get over themselves, I think. I could understand a P4C (pay for content) game. After all, if I don't have time to raid, for example, why should I pay for maintaining raid zones. I find this P4C idea silly for a number of reasons, but ok. It makes some sense.

When peeps start speaking about "unfair advantage" from those who have "too much" time I just laugh. First because it's laughable that people always try to buy their way into things which is sad. And sadder still is the fact that an adult married, with kids a career and not as much free time to spare, still wants to compete with the kid or unemployed person. Compete for what???
A quick note to the "9 cents per hour model".
9ct * 5h per day * 30 days per month = 1350ct, which is give or take the monthly fee.
I really, really have no clue about the "majority" of players, but when I look around in my guild and people on my friendslist, with raiding and stuff I'd say you get 4-5h per day you are online. If you play more on the weekend, it just about evens out to that.

So I'd say we're already higher than the average on play time and I still think most of us would come off cheaper with that model, even if it's only 1 EUR/month off - so I don't think it would be feasible for Blizzard to do that compared to the monthly fee.
Games based on micro transactions are a money sink and, I believe, intentionally designed to frustrate the player towards paying for "advantages". They are full of mindless grinding mechanics, no real path towards progression short of buying it, and offer metric tons of "cosmetic" things to spend money on that really don't affect the game at all.

Where this approach would shine is invigorating games like World of Warcraft by allowing players to get to the new, exciting content without slogging through mounds of old content the company never intends to improve. The refer-a-friend program is the start of something to address this, but is needlessly complicated and often requires someone to purchase another account and spend more money.

Likewise for the ability to insta-roll a level 55 toon, thereby skipping much of the old world content that offers nothing to existing players. Doing so requires that a player have a character of sufficient level already which somewhat deters brand new players from just skipping to the end. It's not without it's flaws since people can use someone else's account to insta-roll a DK and play that (it's obvious who they are).

So, I think that Blizzard could make even more money and build more interest in the game by offering players the ability to bypass much of the old game and it's endless grinds and repetitive content through micro transactions. It must be done with care and balanced so it's not abused.
Runes of Magic has announced that it is going to introduce an official exchange where players can exchange in game currency for item shop currency (diamonds). I see this as an interesting development that will hopefully allow some of the more hard core players (those that normally pay a lot) to share offload the cost of paying for the game onto a wider audience. Hard core players will probably be rich in game currency due to their high play time and can use this to buy diamonds. Frogster still gets cash for every diamond bought whether it is used to swap for gold or not. The main losers are gold farmers.
And sub games are filled with mind-numbing grinds to keep people subscribed. No designer who resorts to grind to retain customers, under either business model, is doing good work for the gamers. (Though they are making the company money.) Both types of business models can abuse customers. What should really be argued against is the senseless grind.

The blind exchange for dual currency that Puzzle Pirates uses is a great system that combats a lot of these sorts of problems, but the core game design is different. In a DIKU game (where grind is a major component of game design), whether you spend money or time is irrelevant, especially to the company's bottom line. Players getting up in arms about each other is silly. There will always be those with more time and those with more money. Letting the player base exchange between the two is smart customer service, even if it's built on grindy design.
My company is a firm believer in the microtransaction, free to play, play for perks, or whatever you want to call it model.

We design with the idea that an active player will spend on average $10 a month on extras. They can spend more, they can spend less, or they can spend nothing. But when we design various perks, $10 a month average is the assumption we work with. By doing this, we are able to create things that people want, but are not so insanely awesome they would feel crippled without them.

We also try to focus the paid items/features on things that are more about customization, time saving, or efficiency. So those who pay nothing or very little are not weaker or inferior. They just lack some options, and they just have to spend more time to achieve goals.

We've been doing this for 13 years and it works well. It seems to be both financially viable and does not seem to make the people who pay little/nothing feel like second class citizens. I think this is important because PLAYERS ARE CONTENT as well. MMO devs need to remember that. Having interesting, quality players around is valuable to your game even if they are not paying anything.

Muckbeast - Game Design and Online Worlds
"And sub games are filled with mind-numbing grinds to keep people subscribed. "

And F2P games are filled with mind-numbing grinds to force people into paying for XP booster packs to make these grinds bearable. And F2P games give players tiny banks and bag space to force people into paying for a reasonnably sized bank.

Editors of F2P games have an incentive to behave in a disingenuous way stating that their game is free to play but making everything they can to trick people into paying. It isn't the case of every F2P games, I like the Doubloon system of Puzzle Pirates where you pay to access content (being an officer, running a shop, etc.).
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