It’s time you understood microtransactions… your kids already do

Microtransactions aren’t widely understood, yet they’re a key revenue raiser for developers and web content publishers alike

Monday, 12 June, 2023

It’s often claimed that the best things in life are free, but this optimistic outlook on life rather ignores the costs involved in producing and distributing new products or services.

Free postage from online retailers is factored into the selling price. Free news is strewn with clickbait and native advertising. Free social media platforms voraciously harvest your data.

As for those supposedly free titles in smartphone app stores, they carry a cost as well.

They have to, considering the substantial sums required to build, test, launch, market and support new software across incompatible mobile device and home computer operating systems.

What you might not realise is how heavily indebted games developers in particular are to the concept of freemium software.

Free to those who can afford it, very expensive to those who can’t

Freemium models work by allowing people to install software without cost, accessing a basic version of the full platform.

Certain features and functionalities are only unlocked if you pay – advanced editing tools on a photography app, for instance.

In terms of gaming, the freemium model typically throttles gameplay unless you pay small fees to expedite progress.

A fee might unlock additional turns, weapon/vehicle/character upgrades, extra in-game functionality or visual accoutrements like custom outfits.

Each of these microtransactions is a purchase costing anywhere from pennies to a few pounds, funded using a bank card or account already linked to that game’s user profile.

Unfortunately, many people lack the financial self-awareness to keep track of how many microtransactions they’re conducting each month, let alone their cumulative cost.

This is particularly true of children, as with the recent story of a ten-year-old who spent £2,500 of her mother’s money on Roblox after changing saved account passwords.

Although that was an extreme example, many people spend not-insignificant sums each month on in-game purchases.

It’s estimated that the global microtransactions market will be worth $76 billion this year, as companies increasingly deploy behavioural psychology to maximise purchases.

This leads into another worrisome aspect of microtransactions – the insidious influence of gambling.

Please don’t gamble irresponsibly

Back in 2020, we described loot boxes as one of the biggest drawbacks of online gaming.

Sadly, nothing has changed since then.

Loot boxes represent a form of gambling, where consumers pay a sum of money for a mystery prize relating to a specific gaming app.

While occasionally significant prizes may be won, most loot boxes are empty or populated with digital junk.

However, for people immersed in a particular game, it can be seductively easy to keep rolling the dice and hoping the next loot box provides either a rare item or a beneficial upgrade.

Loot boxes tie into the wider ethos of keeping people hooked on a particular game for as long as possible.

More gameplay means more exposure to in-game advertising, more likelihood of microtransactions, better usage figures for shareholders – and less time spent on competitor sites.

Expedited progress (or upgrades your fellow players don’t have) increase your sense of authority, likelihood of success and desire to reach the next stage/level/chapter of a game.

As such, loot boxes and other paid purchases like extra life tokens are cynical ploys to extend consumer engagement, earning the developers money outside conventional title purchase costs.

What can I do about this?

Firstly, be scrupulous about the permissions granted to specific apps. Why is a puzzle game requesting access to your bank details?

If children are using a device, choose a password they can’t reset. Impose parental controls to ensure purchases can only be made using an adult’s face ID or fingerprint.

Always be wary of ‘free’ games advertised in app stores – there’s no such thing. Software companies don’t develop new titles for charitable or philanthropic reasons.

Specifically, look for games which explicitly state they don’t involve in-app purchases.

If you really want to play a game which includes microtransactions, set up email alerts for each purchase to underscore how often money is being spent – and how much.

Finally, remember that in-game purchases are rarely compulsory. You can always say no, even if it delays progress or diminishes your enjoyment levels.

Neil Cumins author picture


Neil is our resident tech expert. He's written guides on loads of broadband head-scratchers and is determined to solve all your technology problems!