When and how did microtransactions actually come up in games?

Microtransactions have become firmly entrenched in the gaming field. Especially in online games. But how did the purchases of in-game items actually come about?

Video games in particular are often full of microtransactions. Because, of course, the development and operation of MMORPGs, for example, cost a lot of money. Therefore, it is not possible to offer these games completely free of charge. In order to reach as many potential customers as possible, entry is free of charge. Typically, players can even experience all the content without having to pay a penny.

However, the developers then make it palatable for gamers to buy in-game items such as costumes, weapons or furniture for houses, as well as EXP boost potions and other items that simply looked cooler than what you find in the game or that offer some relief or time savings.

Even buy games like FIFA 21 or subscription titles like World of Warcraft now offer in-game shops with additional optional items – including special mounts or characters for the game. The acquisition of such things has simply become established.

But how did these microtransactions come about in the first place?

Did it all start with a horse? Horse armor from The Elder Scrolls 4: Oblivion is generally considered to be the start of microtransactions. At the 2006 release, Bethesda offered special armor for the horse in the game. It cost 2.50 dollars. After all, they had bought the role-playing game at full price and should then pay extra for the armor of a horse? 2.50 dollars was definitely too high a price for such an item for some.

Here’s how it started: In 1990, the arcade game Double Dragon 3: The Rosetta Stone was released in amusement arcades. In the slot game, there were shops where players could buy upgrades, lives, weapons, new characters, more special moves, and more by putting extra money into the slot machines. At the time, however, the players were not particularly enthusiastic about this.

In 2003, the MMO Second Life started with a virtual economy through which players themselves can still buy and sell items today. These include, for example, clothes to distinguish themselves from the other people in the MMO and to show what you could afford cool.

What about Mobile Games?

In 2008, Apple’s App Store launched and offered mobile games. These relied directly on microtransactions as the main source of income. It quickly became apparent that Buy2Play titles were not well received, especially when their price was in the double digits.

However, free to play mobile games with optional microtransactions were accepted. In the first three years after the launch of the store, Apple generated sales of more than 3.6 billion dollars. 80% of this came from Mobile Games.

The success that companies like Apple have had in selling in-game items has encouraged more and more developers and publishers to devise similar methods of monetizing their games. Sales of skins, loot boxes and the freemium model, where the games are basically free, but additional content costs money.

So microtransactions have been around for a long time, it only took a long time before players really became aware of it. They are now an integral part of the gaming industry and will probably remain so.