Microtransactions As A Business Model In The Video Game Industry

Bachelor Thesis from the year 2015 in the subject Business economics - Operations Research, grade: 70%, University of Portsmouth, course: Business Information Technology, language: English, abstract: Microtransactions are currently one of the most popular ways to monetize videogames, in particular free to play ones. The objective of this dissertation is to study the microtransactions business model and understand why it's so popular, how can it succeed and how does it fail. In order to better understand how the model works, the study focuses on four cases of companies that have published titles using this business model and how successful their games were, as well as implications in terms of company popularity, model popularity and what caused some of them to fail. Paired with these cases, two surveys were conducted to players of two popular video games that include microtransactions, Hearthstone and League of Legends, to better understand how much money players are spending in the games, how common it is to spend money in free video games and what kind of content they are interested in. Overall, the objective of the study was accomplished, with the results of the survey and case studies allowing a better comprehension of the player motivations when investing money in videogames and establishing a correlation between how long the players have been interested in the game and how much money they have spent.