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 Introduced to the mobile games market in 2006, microtransactions are the new trend in Korea that are predicted to become more popular as the business model has proven to be successful, generating increased revenue for game after game. Roughly one third of games launched by SK Telecom in 2007 have included microtransactions, and the number of games with the microtransaction feature is expected to grow in the near future. Currently, Gamevil, Nexon Mobile, and Com2us are leading the market trend with games that feature microtransactions. Out of these publishers, Gamevil has the highest percentage of games with microtransactions.
Before they became popular in the mobile gaming market in Korea, microtransactions were successful in other areas. The PC gaming industry is an example of this. In the U.S., most consumers are willing to buy PC games at retail. But in Asian countries like Korea, most consumers have chosen to download copies of PC games online, given the high-speed broadband networks. This posed a problem, especially when people could easily download pirate copies. Because of this, PC games did not sell well at retail in Korea and companies were not able to make as much money off of this. One of the solutions to this problem was creating online PC games that have a Client-Server Model, which would verify if the user was a subscriber. This became popular for hardcore gamers but didn't effectively target the casual gamers due to the high subscription fee that the people had to pay every month. Free online games became extremely popular too, but how do gaming companies make money then? This is where microtransactions come into play. Around the same time, companies like Neowiz had introduced microtransactions through selling clothes and accessories for the avatars used in PC chatting. This model was extremely successful and online game companies started giving out the games for free. As these free games became popular in Korea, microtransactions of special items and additional features in games became popular. The users were playing for free, but were also paying consumers.
Kartrider, one of the most played online games in Korea, is a great example of how microtransactions were used. In this multiplayer PC racing game, users can download the subscription free game and enjoy the basic features of Kartrider. However, users who want customizations and upgrades pay a small price. The free aspect of the game initially hooks the user into first downloading the game, and then the game play naturally induces the player to purchase additional inexpensive features. But it's not just microtransactions that make this game special. Kartrider took advantage of the high-speed broadband as well as the casual and community aspect of gaming. Players can race with or against other players online, and one doesn't have to be a hardcore gamer to enjoy this game. Technology combined with a casual gaming community served as the basis for the Kartrider microtransactions model and helped make the game successful. The fact that Kartrider has not only been successful in Korea, but also quite popular in and brought to other countries like the U.S., shows that this type of free, casual, microtransaction featured game will become even more prevalent in the U.S.
In fact, subscription free services like Facebook and MySpace are already common in the U.S as broadband connections improved and people began living online. On Facebook, users can enjoy the basics of the site for free and have the option to send gifts to friends for $1 each, an example of how microtransactions benefited a subscription free service with a casual community.
In terms of online games, however, the U.S. mainly uses the World of Warcraft model, where players purchase the game at a fixed price and pay on a subscription basis to play online. World of Warcraft is not a casual game, and not all players (like young kids) can or are willing to pay $15/month. Payment issues such as not having access to a credit card pose a problem. In fact, some casual gamers in general wouldn't even pay that much per month if they were only going to play a couple times. So what do young kids and casual gamers play nowadays? This group plays free casual games and only makes purchases for around a dollar each when they want additional items. The microtransaction feature generates revenues for these games. Users also have alternative ways of purchasing and paying for items. For the game Maple Story, another successful subscription free online game, prepaid cards were available for purchase at Target stores, and ended up being the second most sold content card next to iTunes. This makes sense, considering that a good majority of players were young and did not have access to credit cards. Other subscription free games operating on microtransactions, such as RuneScape with its over 10 million accounts, have also proven to be popular. The same example can be seen in Europe with Habbo Hotel. These trends show how free online casual gaming is clearly on the rise.
Next: How does this apply to mobile games?
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