MMORPG Microtransactions: Real Money for Virtual Items

A growing trend in MMORPG's (Massively Multiplayer Online Role-playing Game) are microtransactions where gamers use real money to pay for in-game gear like clothes, armor, weapons, pets, mounts, or other items. Gamers are increasingly paying for these items in addition to their regular game fees. Many online gaming sites are offering exclusive content through microtransactions. I have been playing video games for 20 years and have always looked forward to the technological advances. These online role-playing games are great for someone who once liked Dungeons and Dragons or Magic: The Gathering, but this new idea of paying real money for virtual items is tough to accept.

World of Warcraft
Most MMORPG's require a player to purchase a retail copy of the software and then pay a monthly or yearly subscription fee to play the game online. Many games offer periodic expansion packs with new content that players have to buy to continue to advance in the game. When Blizzard Entertainment released the wildly popular World of Warcraft (WOW) MMORPG in 2004, it changed gaming forever. WOW now has more than 5 million active subscriptions. Even with that huge revenue source, in November 2009, Blizzard Entertainment introduced the first microtransactions to WOW by offering two virtual pets for $10 each.

Lord of the Rings Online
Many MMORPG's are adopting this hybrid revenue model where they collect subscription fees and also offer increasing amounts of game content for real money. Lord of the Rings Online (LOTRO) by Turbine. Inc. is based on the trilogy of books written by J.R.R. Tolkein. The second expansion pack, The Siege of Mirkwood, released in December 2009 included a relatively small new game area bundled with a free mount and 2 extra character slots. Although this is the second expansion pack, the game has not even covered the material in the first book yet. To continue to buy the expansion packs and pay for a monthly subscription makes each gamer that signs up a significant revenue source for the company.

Wizard101
Even a game such as Wizard101 by KingIsle Entertainment, which is marketed as a kid-friendly MMORPG, is expanding their level of microtransactions. Wizard101 offers a decent sized trial area that players can access for free, but further content must be bought either through a monthly subscription or by individual game areas. Wizard101's expansion in October 2009 contained several upgrades like mounts, henchman, customizable clothing, and elixirs that were offered as microtransaction content.

Although companies like Turbine and KingIsle would argue that the extra content is not necessary to play the game, many players feel cheated at the idea of paying a monthly subscription fee and then being asked to pay more money for in game items. A much-anticipated event in Wizard101's October 2009 expansion was the addition of mounts. The company published early teaser photos of dragons, cats, horses, and brooms and suggested they would be available to all characters for in-game gold. Yet when the content was added many players could only afford a mount by paying real money. Although the mounts can be purchased for a very large amount of in game gold by the highest level characters, the majority of players who want a mount would have to pay between $10 and $30.

As more and more games move to this type of revenue model, gamers are going to be forced to decide whether they want to pay more money for virtual items. Some gamers balk at the idea of paying real money for what is essentially pixels on a screen, while others argue that it is not much different than paying to see a movie. Some gamers feel there are other forms of entertainment like concerts or amusement parks where you receive nothing tangible from your entertainment experience.

When I first encountered the idea of microtransactions on the Neopets.com website, I was sure I would never pay for a virtual item with real money. I could not understand why anyone would unless they had a lot of disposable income. I could not imagine paying real money for things like virtual clothes or furniture. When I started playing Wizard101 several months ago as a free trial, I still could not imagine paying real money for virtual items. Yet after I purchased a few areas of the game, I wanted to keep playing. I introduced a niece to the game and she loves it. When the mounts came out in October she desperately wanted a broom. I could not see paying $12 for a virtual broom, but we were not even close to having enough in-game gold.

Although, I still have not bought her a broom, I can't help thinking as the Holidays approach that it might be an appropriate gift. If she gets $12 worth of enjoyment out of having her character ride around on a broom for a year or so, is that really much different that buying a doll or game that will only hold her interest for the same amount of time? This is a question I have asked myself frequently. I have not been able to bring myself to pay for that broom, but the number of characters in the game that are riding mounts and acquiring other microtransactions items makes it obvious that many gamers have no problem with the concept.

Unfortunately for gamers, who are reluctant to use real money for virtual items, it seems there are enough people who fully accept the practice to make it lucrative for the companies. Recent rumors about some of the largest MMORPG's going free-to-play and relying completely on microtransactions for revenue make it obvious that it is a viable and profitable revenue model for gaming companies. As long as companies are careful not to price themselves out of popularity with increasingly higher prices, it would seem that the practice of microtransactions will grow more popular and gamers will have to learn to embrace the practice if they want to play the top games.

Sources:

http://en.wikipedia.org/wiki/World_of_Warcraft

http://en.wikipedia.org/wiki/The_Lord_of_the_Rings_Online:_Shadows_of_Angmar

http://en.wikipedia.org/wiki/Wizard101