Transactions

Microtransactions

Microtransactions Jonathan Poland

Microtransactions is a large scale industry that is becoming a dominant business for certain types of companies. They are small financial transactions that are made within a digital environment, such as a video game or app. These transactions are typically for the purchase of virtual goods or services, and can range from a few cents to several dollars.

One of the challenges with microtransactions is that they require easy payment methods in order to be practical, as the process of making a full payment can interrupt gameplay. There have been numerous cases where players have claimed that their microtransaction purchases were accidental, due to the ease with which they can be made.

It is important to recognize that microtransactions involve real-world payments, even though they take place within a virtual environment. Games are often designed to create a compulsive desire for regular purchases of virtual goods, which can lead to a form of video game addiction that can have serious financial and social consequences, similar to gambling.

There are also ethical concerns surrounding the use of microtransactions in games that are clearly designed for children. In some cases, these transactions may be viewed as a sales pitch aimed directly at children, which raises concerns about the manipulation of young players.The following are illustrative examples.

Functions
Unlocking functions of an app.

Features
Features such as game levels and characters.

Content
Content such as stickers that can be sent to friends in a messaging app.

Powers
Powers and abilities in a game.

Gifts
Virtual gifts such as jewelry.

Tools
Tools, machines and vehicles such as a spacecraft that can be used in a virtual environment.

Fashion
Fashion and accessories that can be worn in a virtual environment.

Consumables
Things that can be used once such as a magic potion in a game. This is essentially the virtual equivalent of fast moving consumer goods.

Loot Box
A box filled with random items. In many cases, there is a chance to win a rare and valuable virtual good. As such, loot boxes may fall under gambling laws in some jurisdictions.

Gacha
A virtual vending machine that dispenses a random virtual good that may be rare or valuable.

Learn More
Brand Management Jonathan Poland

Brand Management

Brand management is the process of creating, developing, and managing a brand in order to build brand equity and drive…

What is a Self-Replicating Machine? Jonathan Poland

What is a Self-Replicating Machine?

Self-replicating machines are robots or nanobots that are capable of producing copies of themselves, using scavenged materials and energy to…

Subscription Model Jonathan Poland

Subscription Model

A subscription model is a pricing and revenue strategy in which customers pay a recurring fee for access to a…

Competition Jonathan Poland

Competition

Competition is a term that refers to the act of engaging in a contest with others in order to determine…

Integration Risk Jonathan Poland

Integration Risk

Integration risk is a type of risk that arises when two or more entities, such as businesses, systems, or processes,…

Community Problems Jonathan Poland

Community Problems

Community problems are local issues that can only be effectively addressed by involving the people who live in the affected…

Revenue Management Jonathan Poland

Revenue Management

Revenue management is the practice of using data analytics to optimize sales and maximize revenue for a business. This can…

Figure of Merit Jonathan Poland

Figure of Merit

A figure of merit (FOM) is a value used to evaluate the performance of a system or device. It is…

Management by Exception Jonathan Poland

Management by Exception

Management by exception is a management technique that involves automating standard processes and empowering teams to handle routine business conditions.…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Market Environment Jonathan Poland

Market Environment

The market environment refers to all of the factors that can impact a company’s strategy, decision making, and tactics. This…

Adoption Lifecycle Jonathan Poland

Adoption Lifecycle

The adoption lifecycle refers to the process by which customers adopt and become familiar with a new product or technology.…

Ease of Use Jonathan Poland

Ease of Use

Ease of use refers to the usability of a product, service, tool, process, or environment, and is an important factor…

Market Value Jonathan Poland

Market Value

The value of an asset or good in a competitive market, where buyers and sellers can freely participate, is known…

Negotiation Tactics Jonathan Poland

Negotiation Tactics

Negotiation tactics are strategies and techniques used in the process of negotiation to help achieve an individual or group’s objectives.…

Technology Factors Jonathan Poland

Technology Factors

Technology factors are any external changes related to technology that may affect an organization’s strategy. Identifying and analyzing technology factors…

Rule of Three Jonathan Poland

Rule of Three

The rule of three is an economic theory that posits that large, mature markets tend to be dominated by three…

Creative Ability Jonathan Poland

Creative Ability

Creative ability is the talent or aptitude for creating ideas or products that are original, valuable, and impactful. This can…

Customer Dissatisfaction Jonathan Poland

Customer Dissatisfaction

Customer dissatisfaction refers to a customer’s negative evaluation of a product or service. It can be measured by asking customers…