TMCnet Feature
September 20, 2018

How to Successfully Apply Microtransactions to Your Business

Microtransactions help the game and mobile apps developers make massive profits. Over the recent years, this business model has become one of the most prominent trends in the mobile app market. Game publishers admitted high revenues and efficiency of free-to-play projects with embedded microtransactions in comparison with other products. Besides, gaming and mobile app industries are not the only fields where microtransactions can be applied.

How do microtransactions work?

The phenomenon of high return on investment and fast payback of such projects results from human psychology. Gamers spend enormous amounts of money to customize a character or shorten the game duration to win as quickly as possible. The temptation to accelerate game progress or gain an advantage over rivals in cooperative gameplay is pushing users to make purchases via microtransactions. The voluntary nature of the last ones, excitement from playing, competitive spirit, and illusively small sums of money spent helps “pump” more out of gamers. The fact that the total sum of microtransactions several times exceeds the cost of purchasing the application stays unnoticed by players. Users are unconscious of how much they really spend and make more and more purchases just like gamblers in casinos. Besides, the ability to use an application or play a game for free attracts a vast audience, in spite of possible microtransactions.

One may say that making money on microtransactions is unfair. But in reality all the payments are voluntary, and users are free to buy anything they want. Nobody makes them spend money. Apart from that, the monetization system in game projects is becoming even more transparent allowing to avoid accidental purchases.

Monetization and microtransactions

These are two sides of the same coin. One may say microtransactions are the evolution of game projects monetization methods. Successful cases are not far to seek. For example, Activision Blizzard made $4 billion on microtransaction in 2017. Microtransactions became a sort of savior for publishers and developers who suffered heavy losses from pirate content distribution. Free-to-play games are the most profitable ones these days becoming less attractive for computer pirates.

Gaming and mobile apps development companies are not the only winners in this game. Businesses specializing in e-commerce web apps and services can also successfully adopt microtransactions. The voluntary aspect of payments and other advantages of this business method can be widely used in web stores. Making monetization a priority in your custom software application development strategy is a recipe for creating a genuinely profitable solution.

Microtransactions embedding models

  • Virtual currency integration and free points

One of the simplest models to embed microtransactions is integrating virtual currency into an application and offering free points. ?ertain number of the last ones is available for any person who launches your app. Users can pay with these points for the unlocking of some of the app's features. Allow your customers to get more points and spend them on more features. But this time it will be not exactly for free.

Your clients can earn the points for:

·         Writing a bug-report

·         Posting a review about some of your products

·         Posting on social networks

·         Recommending the application to a friend

There are also different purchases scenarios that software development companies can offer to their apps’ users:

·         Get a fully functional solution but pay with virtual currency for the time you spend using the app

·         Unlock the required functions and features with the earned virtual points, otherwise, use the incomplete version of the application;

·         Pay for disabling advertising

  • Sale of virtual products

The most vivid example of such microtransactions model is the sale of unique emoticons and stickers in various messengers. Some social networks also add diversity to their messengers via buying, selling and exchanging some virtual elements. As a rule of thumb, it works perfectly for software solutions focused on social interaction. The nature of virtual products requires their continuous update which suits for online communication really good and stimulates new sales. On the other hand, it does not work well for commercial applications with the business logic that isn't often updated. Users’ desire to customize the interface of an application and stand out among the other users is a great incentive for buying virtual goods. The sales statistics for various plugins, app skins and layouts proves that.

  • Subscription Extension

The widely used model of subscription for services can be extended soundly via microtransactions integration. The greater part of subscription-based services offers a set of several price plans. Users can only increase the level of their subscription to gain access to more features or services. Microtransactions allow a user to activate the desired features under the current subscription. Users will enjoy this if a one-time payment costs less than another subscription.

  • New features crowdfunding

Imagine that your application helps in raising funds for further development. You can allow financing the development of new features and capabilities by implementing the microtransactions mechanism. Let users add items to your ToDo list, vote for the development of new features or products, and donate to your company’s fund. Unlike traditional crowdfunding campaigns, you can show inactive menu items or prototypes of the future interfaces right in the application, offering users to finance the development of those. Obviously, you will have to fulfill all the accompanying obligations and provide you donators with the reports on funds expenditures.

  • Pay as much as you like

A brilliant example of such model is a sales campaign of Radiohead’s music album “In Rainbows” that took place in 2008. Album buyers were offered to pay any price they considered appropriate. This approach is not widespread in the software industry. The monetization model with mandatory microtransactions but no fixed price is really promising and fair. Developers will be able to get a large number of users involved. Even those who decide to make the smallest payment are important. On the other hand, the PR effect caused by such a pricing model will contribute to your company's image.

Are there any technical restrictions for microtransactions?

First of all, you should check if your business is e-commerce ready to be able to use at least some monetization methods and integrated microtransactions. The next word belongs to software developers who can create applications for any platforms with the technical feasibility to monetize various solutions in many different ways. There are no restrictions on microtransactions usage in any types of applications (mobile, desktop, web apps or web services). Still, IT specialists should follow proven practices for application development to avoid possible difficulties that can arise in the process of building an app.

Nearly all the major system platforms already have the pre-integrated tools necessary for in-app purchases, trial modes enabling/disabling, and so on. But you should take into account that not only technical capabilities but also a combination of business functionality, effective demand, and the most appropriate price strategy ensures successful implementation of microtransactions. That is why the final word rests with business analysts who will study your case and come up with a commercially successful solution.

The bottom line

There are various models of microtransactions embedding that can be applied not only in the gaming and mobile apps field but also in e-commerce web apps and services. As there are no restrictions on its usage, this business method can be easily applied almost in any case. Besides, It's better not to undervalue the importance of turning to business analysts who will help successfully incorporate microtransactions into your business strategy.

Author bio

Helena Bogdanova is a Tech Journalist with OCSICO, a software development company headquartered in San Jose, California. Helena writes about IT technologies, mobile applications, e-commerce, video games and more. You can contact Helena via

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