Nowadays, it’s hard to imagine a world with in-game upgrades and microtransactions. With so many world-beating titles readily available to download for free, in-game purchases have become a fact of life.
However, even developers putting out titles at the full RRP are getting in on video game monetization. By the end of 2023, the microtransaction market is expected to be worth more than $76 billion. While some would argue that microtransactions and the buoyant skins market provide players a way to personalize their in-game experience, many more would counter that it’s ruining the industry, especially where first-person shooters are concerned.
When Did Microtransactions Become a Thing?
While the freemium model is perfectly acceptable today, this hasn’t always been the case. At the turn of the century, the concept of spending additional money on a game you’d already paid for or downloaded was an alien concept. The first steps towards microtransactions came with the advent of DLCs, with players forced to pay extra to unlock new levels and access exclusive content.
It wouldn’t be until the release of 2006’s The Elder Scrolls IV: Oblivion that modern-day microtransactions became a thing. Many players scoffed at the idea of paying a couple of dollars for little more than an aesthetic upgrade. Nonetheless, the item in question, a piece of armor, became incredibly sought-after, with many fans continuing to pay for and download it several years after its release. Once app-ready smartphones became more commonplace, the microtransaction model truly came into its own.
How Much Money Are Gamers Spending?
Despite being a lucrative revenue stream for game developers, relatively few players are actually shelling out for microtransactions. Conservative estimates suggest that as little as 5% of gamers are regularly spending money on microtransactions. It tends to be MMO players that spend the most, with a typical player spending around $230 during their lifetime. However, the most enthusiastic MMO gamers out there can spend upwards of $1,000 on them.
The Companies Making a Killing from Microtransactions
In the world of apps and grassroots game developers, microtransactions are considered par for the course. However, even major game developers are raking in dizzying profits from the microtransaction market. Activision Blizzard, the company behind franchise like Call of Duty and Diablo, brings an estimated $5.8 billion annually from DLC upgrades, player subscriptions, and microtransactions. Riot Games is another gaming heavyweight that benefits tremendously from microtransactions. Here, things work a little differently, with players forced to
exchange real-world currency for Riot Points. These can then be used to purchase exclusive characters or stock up on sought-after skins.
While all of this seems like a shameless cash grab from greedy developers, you have to remember that many of these games are available to download and play for free. In other words, developers need to make a profit from somewhere. However, the monetization of these titles isn’t simply about lining the pockets of Epic Games, Riot, and Blizzard. In fact, microtransactions are helping keep the growing esports sector afloat. Both Riot and Epic have channeled significant microtransaction revenues into prize pools in recent years.
Do Microtransactions Give Wealthy Players an Edge?
When it comes to first-person shooters like Counter-Strike: Global Offensive, many players worry that not being able to purchase the latest skins case is going to put them at a disadvantage. However, this simply isn’t the case. You only need to follow the pros in action at ANCHOR to see that premium skins and weapon upgrades won’t make you a better player. Exclusive skins might help you stand out on the battlefield, but there’s zero tactical benefit to them. However, limited edition skins and fan-created designs have created a whole other industry. Today, third-party skin marketplaces offer players the chance to part with sought-after skins for significant sums.