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The Microtransaction Miracle

Everyone has at least one. A favorite. A nostalgic journey through yesteryear. Maybe even the best of all time. Every single gamer has one video game they wish they could play again like it was brand new. But everyone knows that video games don’t change over time. You play a game until you tire of it, and that’s that.

Or is it?

When avid gamer Anthony Minchella gets tired playing his favorite champions in League of Legends, an incredibly popular internet game, he just visits the in-client storefront. He browses the merchandise for a bit, looking at new champions and costumes. A few quick clicks and a credit card number later, and he now owns a cool new costume for one of his champions to keep his gaming more lively.

For just a few dollars, the League of Legends store can sell you a new experience within the game.

For just a few dollars, the League of Legends store can sell you a new experience within the game.

In the gaming industry, this purchase is known as a microtransaction, and the practice is practically pervasive among game developers seeking additional revenue between major releases. For some games, including the free to play League of Legends, microtransactions are the primary source of revenue for the entire company. Almost every major title over the past year, from Diablo 3 to The Elder Scrolls: Skyrim to FarCry 3, all use some form of microtransactions, whether it be downloadable content (DLC), or a real money auction house that takes a percentage of every auction sold.

Most players don’t seem to mind these financial nibbles at their pocketbook. Minchella, who has spent over $300 at the League of Legends store, says the system they use is fantastic because all the items available in the store that actually affect game play can be earned over time using no money at all. He also believes that the developers need to get paid somehow for their efforts, and that microtransactions are a great way to do so.

Many gamers echo Minchella’s thoughts on the subject, including long-time gamer Stephen Rayman, who admitted he would like DLCs to be free, but “game development is a business and they have to make money.” Rayman frequently buys Microsoft Points, a type of digital currency used to purchase everything from movies to DLCs to whole games on the XBox Live Marketplace. According to Rayman, they are useful for everything from extending the life of a game he already owns to “gifting gaming without the need to hand someone cash.”

There is a darker side to this story though. Gamers are feeling the pinch of a slow economy just as much as game developers, and are sometimes unhappy at the prospects of having to buy additional content, particularly when they feel it should have been part of the game in the first place.

Revenue has fallen each year since 2009.

Revenue has fallen each year since 2008.

Minchella, who like everyone only has so much money in his budget for gaming, bought Marvel vs. Capcom 3 this year, only to have to spend an additional $30 to unlock two characters that were already in the game when he purchased it.

Other gamers, such as Richard Rank, often wonder why DLCs are announced during the development of the actual game. “If (that) is the case, then why not include it as part of the game, or allow people who have purchased the game already to download it for free?” he states, adding that just a few extra purchases can add up to the cost of an entire game.

Microtransactions, for all the praise and criticism, are here to stay. Almost every blockbuster game has them, and even free to play games like Farmville are filled with them.

It's free to play, but FarmVille offers currency purchases openly.

It’s free to play, but FarmVille’s revenue in 2011 was over $1.1 billion.

Despite some occasionally poor experiences with them, gamers typically find microtransactions to be excellent, either to spice up a game they love but have played endlessly, or to customize a given game’s experience.

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