Video games used to be purchased as products. To play a video game, you needed to also purchase a console and the game would come in the form of a compact disk or a cartridge. When you bought a game, you purchased a final product. The game was finished and shipped. Expanding on story lines or in game features usually required purchasing an additional expansion pack or game sequel.
Faster internet speeds, streaming services, and the emergence of microtransactions have created a new revenue model around gaming where the game becomes a gateway to monetization, as opposed to the monetization method itself.
We don’t buy games anymore. In many cases, the games are given away for free. The games are the content that is used to leverage purchases.
In some cases, the game itself is also sold, but even in these cases, most of the money made is made through “microtransactions.”
A microtransaction is a small purchase that unlocks additional features in the game, such as…
- new weapons
- new outfits and skins
- new levels and features
Microtransactions have proven to be extremely effective in the gaming industry, because they allow for continuous storylines to emerge. We no longer need to wait for the next compact disk to be released. Now, one game can be constantly updated, improved upon, and evolved so that new products and new in game purchases can continuously be introduced.
Games are never really “finished.” Rather, developers and engineers continuously adapt and evolve games to fit trends, game styles, and culture. This allows for one game to effectively monetize over the course of years (or even decades) without ever needing to ramp up to a new launch.
It’s fascinating to think of all the ways that microtransactions will continue to influence our society.
For instance, how much longer will it be until the New York Times incorporates a way to pay for individual articles? I for one, would be much more inclined to quickly purchase access to a particular article than I would be to pay a monthly fee.
If there is a headline that I simply must read, I think I would be willing to pay 30 cents to access the content and keep access for 24 hours.
I think there is a huge opportunity for someone to create a content platform that allows for instant transacting. In the same way that Substack created a platform for monthly memberships, who will create a platform that includes a merchant where your payment information is stored so that in order to purchase access to an article, you can do so in one click without having to enter your payment information?
Will this be a content platform? Or will the innovation come from a top level merchant like Stripe or PayPal?
How can we do this safely? How can we do this without getting hacked?
Gaming is always on the front lines of innovation. If you want to see the future, pay attention to games. So far, we see microtransactions having huge success in gaming, so it’s likely that we will see it in other forms of online and offline content.