Microtransactions and how Free-to-Play games have taken over the digital video game market

Principle: People generally respond to incentives in predictable ways.
Question: How do developers incentivize gamers to play their game while still making a profit.

Most games on the market today cost about $60 unless you buy an “advanced” edition that comes with bonus content. However, an increasingly popular trend for game publishers is the Free-to-Play (F2P) model. These games cost nothing to download and play but instead make profits either from subscriptions for premium services, or in-game purchases also known as microtransactions. This model has grown in size, popularity, and profitability so fast that one of today's most popular games, Fortnite, “made a billion dollars in less than its first year. $296 million of that came in April alone.”

Microtransactions were originally developed by mobile game developers, to get their players to buy in-game currency which could speed up their progression in the game. Most if not all of the most successful mobile games -Clash of Clans, Candy Crush, and Pokemon GO- have microtransactions. The success of these games proved the system’s profitability, and was easily transferred to PC and console. With microtransactions, gamers can spend money to buy things like cosmetic items, skins, weapons, XP boosts, DLC (downloadable content) and more. What further helps F2P games like Fortnite, are the cultures developed by the players, that base how “cool” you are based on what kind of cosmetic items you have. CS:GO even allows an open market where skins can be bought and sold -with a small tax to the developer Valve- and some of the rarest skins can be worth thousands of dollars. Over the last decade, microtransactions have become prevalent throughout console and PC games that already cost full price in series like FIFA, Madden, and Battlefield, but Free-to-Play games have used this system to best effect. F2P games have grown so rapidly and become so powerful that they now control 82% of the digital game market revenue. 


https://america.cgtn.com/2018/10/29/fortnite-fever-cashing-in-on-games-continuing-popularity https://www.wepc.com/news/video-game-statistics/#gaming-video-content-market