How payments infiltrated online gaming

How payments infiltrated online gaming
Written by Alexis


Image by Mohamed Hassan from Pixabay

Gaming used to be so easy; you paid upfront for a game, and it came on a disk. You loaded that onto your computer or games console and started playing. The cost was all upfront, and you knew what you were getting. The introduction of cloud-based gaming, online payments, and app gaming meant people were offered free to play games. However, as the old saying goes, ‘there is no such thing as a free lunch’, and you could say ‘there is no such thing as a free game’. With a market worth over US$26.14bn, someone is paying for something.


After all, developers need to be paid for their time, as do the designers and creatives behind the games. Many games entice you to play for free, but you have to watch minutes of adverts each time you return to the site or as you complete a stage. The game makes money by earning revenue from the advertisers who bank on the fact that you will eventually break and click through on one of the links. 


The alternative you face is to sign up for a subscription to the games or suite of games. A great example of this is The New York Times Wordle game. The proposition hardly sounds very hard or even very appealing. Once a day, you have six guesses to work out today’s five-letter word. However, a whole online community has built up around the game, and people share their triumphs and failures across social media platforms. Play is free. However, the game does not last very long and leaves players wanting more. The platform allows you to try out some of its other games, like Spelling Bee but does not give the gamer full access. To play all the games, you need a monthly subscription.


Having played one game and knowing how good it is, the temptation to pit your wits against another is enormous. To make signing up seemingly irresistible, the subscription is offered at a low cost for an initial trial period. The platform hopes that by the time you reach the end of the trial period, you will be enjoying yourself so much you will carry on at the higher price. That five-letter word you started with does not seem quite so innocent now, does it? 


Other games are monetized in different ways. Probably the most upfront of these are online casino games. The operators in this sector make no bones about the fact that you need to pay real money to play for real money. While social casinos do exist for people who just want to play for fun, even those are monetized with ads or micro-payments for extras and upgrades.


Online casino platforms offer players the chance to play casino-style games in return for payment. While a huge selection of classic casino games is available, the pokies are by far the most popular. A canny online gambler might find a good selection of bonuses and free spins. In addition, plenty of online casinos have demo mode games so players can familiarise themselves with the game. However, to continue playing and cash in any winnings, you must set up a casino account and deposit in your casino account.


If you were playing in a brick-and-mortar casino or at an arcade, you would need to trade in your cash for casino chips. The experience online is pretty much the same, but you must deposit in a digital account. Many payment options are available, including debit and credit cards, PayPal and direct bank transfers. There are also some new fintech kids on the block shaking up the payment sector. Look out for Skrill online casinos offering instant money transfers and low transaction fees.


Away from online casinos, many mobile games include what are known as micro-transactions. Rather than paying upfront for a game, developers encourage players to make small but frequent transactions. The first ever micro-transaction sold by a major publisher took place in 2006. Bethesda offered horse armour for $2.50 in its The Elder Scrolls IV: Oblivion game. The initial response was negative, with players saying $2.50 for something purely cosmetic was too expensive. However, it created a trend that is now normalised. 

While some players will pay a premium for something aesthetic, small in-game transactions have proved to be much more popular if they help a player advance in a game. For example, a player can be incentivized to buy items that give them an advantage over other players. The special powers they have obtained through the purchase are not available in the standard run of play and cannot simply be earned. 


Other games allow payments that let the player to fast-forward through the game. They buy access to advanced levels, for example, or let them skip tasks that could take hours to complete. Some top-grossing games are now funded through microtransactions, including PUGB Mobile, Honor of Kings, Genshin Impact and Roblox.


Other developers have monetized games by encouraging players to obtain and maintain a streak. The player is rewarded each day they visit the game and complete the set tasks. An app like Duo Lingo rewards players who complete a fixed number of tasks, but it could be a variety of incentives that make the game ‘sticky’ for the target market. The longer the streak, the greater the motivation not to lose it. However, streaks are not only maintained through playing – many developers allow players to pay for streak freezes or even to restore a lost streak.


In-game payments might have been disregarded when first introduced, but now they are standard gaming currency, however they are presented.


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