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Microtransactions: The Sword that Wins the Console Wars

There already is evidence that my predictions regarding “microtransactions” in the Xbox gaming ecosystem are coming true. Microtransactions are a pain in the ass in many ways, but they are also a proven strategy to win profit.

I remember when I downloaded Candy Crush for the first time. I kept the game for about two weeks before deleting it from my phone. Many people can attest to almost always using their mobile devices during bathroom breaks (and it is in fact virtually impossible to not bring your phone when using the facilities). For those two weeks, I played Candy Crush whenever I had a few minutes – here and there – to spare. My leisurely reading came to an almost complete stop and I completely ignored my Chess With Friends games. And whether chess and Candy Crush are both addictive, in the former, you lose because it’s your fault, while in the latter, you lose because of luck. Dana Smith – in her article “This is what Candy Crush Saga does to your brain”gives a stark portrayal of this reality –

First off, it’s simple. The premise of Candy Crush is basic enough for a preschooler – just match three candies of the same color. Initially, the game allows us to win and pass levels with ease, giving a strong sense of satisfaction. These accomplishments are experienced as mini rewards in our brains, releasing the neurochemical dopamine and tapping into the same neuro-circuitry involved in addiction, reinforcing our actions. Despite its reputation as a pleasure chemical, dopamine also plays a crucial role in learning, cementing our behaviors and training us to continue performing them.

If the game remained this easy, however, we’d quickly tire of the jellybeans and gum drops, becoming bored after a couple of binge sessions. But Candy Crush keeps us coming back in several ways. As we play, the game gets harder, the wins (and those bursts of dopamine) becoming more intermittent.

 Also, despite what you may think – and what the developers of the game claim – Candy Crush is essentially a game of luck, your success dependent on the array of colors you have randomly been given rather than your swiping skills. This means that the reward schedule becomes unexpected: we lose more often than we win and we never know when the next triumph will come. Rather than discouraging us from playing, this actually makes the game even more enticing than if we won easily.

I also believe everyone should read this article by Ramin Shokrizade – who describes the methods used in microtransactions for games like Candy Crush. Here he gives a similar depiction of the game control that Smith does in her article:

A game of skill is one where your ability to make sound decisions primarily determines your success. A money game is one where your ability to spend money is the primary determinant of your success. Consumers far prefer skill games to money games, for obvious reasons. A key skill in deploying a coercive monetization model is to disguise your money game as a skill game.

King.com’s Candy Crush Saga is designed masterfully in this regard. Early game play maps can be completed by almost anyone without spending money, and they slowly increase in difficulty. This presents a challenge to the skills of the player, making them feel good when they advance due to their abilities. Once the consumer has been marked as a spender (more on this later) the game difficulty ramps up massively, shifting the game from a skill game to a money game as progression becomes more dependent on the use of premium boosts than on player skills.

Note that the difficulty ramps up automatically for all players in CCS when they pass the gates I discuss later in this paper, the game is not designed to dynamically adjust to payers.

If the shift from skill game to money game is done in a subtle enough manner, the brain of the consumer has a hard time realizing that the rules of the game have changed. If done artfully, the consumer will increasingly spend under the assumption that they are still playing a skill game and “just need a bit of help”. This ends up also being a form of discriminatory pricing as the costs just keep going up until the consumer realizes they are playing a money game.

None of this changes the reality that microtransactions are an excellent business model for profit growth.

And to keep that growth going, you have Toby Walsh – who I believe was probably hired by the developers at King to keep people believing that their intellect is associated to their winnings in Candy Crush. Rose Eveleth at Smithsonian, using research done by Toby Walsh, brings relief to those who may have thought their gaming addiction was anything other then – well, a gaming addiction:

Now you can play Candy Crush Saga without intellectual guilt: mathematicians say it’s actually pretty hard.

On a personal note, I feel as though my brain is working more diligently when I’m playing chess. Even if the entertainment factor was there for both games, it is the addiction factor – along with the chance that one day I might acquiesce to a microtransaction – wasn’t worth it for Candy Crush. As an aside, what I was proud of was figuring out how to refill my lives, but was highly incredulous as to whether I had figured this out myself.

I didn’t.

Whether this trick still works is unknown to me; but if you’re addicted to Candy Crush and you want free lives, Brandon Widder gives a great explanation with images.

In any case, I deleted the game after two weeks and didn’t look back. Too much time away from healthy reading. As a business, however, I was astounded and even impressed as to  how much money King (the developer of Candy Crush) made through microtransactions. Today I find that Windows 10 is using the same model of microtransactions to induce users to spend money on eliminating advertisements.  Victor Luckerson at Time explains more:

The newly released Windows 10 features the Solitaire Collection, which includes several variants of the classic card game. However, unlike the version of the game you played at your grandma’s house in the ‘90s, Windows 10 Solitaire comes packed with advertisements. To get rid of the ads and earn some in-game currency (yes, this centuries-old game is borrowing from Candy Crush), users can pay $1.49 per month or $9.99 per year.

On June 12, 2015, I made a post on my Facebook:

My Gaming Prediction: The console wars will be won by whichever system can obtain the most microtransactions. And you can take a wild guess as to which system is set up best for that.

Microsoft is going to obtain profit from creating a smart balance between microtransaction inducement and advertising revenue. Either way, Microsoft wins. Windows 10 gives Microsoft the exact platform to gain revenue in a world where the cloud allows a company to be more flexible. They’ll be able to update commercials or insert advertisements within video games without harming play. In fact, because of the cloud they’ll be able to change any bad marketing techniques that gamers don’t like. The cloud gives Microsoft the ability to quickly change tactics based upon user feedback.

One day, gamers in the Xbox Ecosystem could be watching commercials in between wait times during online multiplayer.

Be imaginative. There is more profit to be made here than you can imagine.

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