Why is it that even/especially on mobile, micro-transactions are as expensive as they are? That is, at least the ones I’ve seen I have to think whether the value is even there. I would have thought that “giving away” obviously great value would get more people to bite. Are big spenders worth that much more than getting more small spenders? Is there some floor where even the cheapest good deal won’t entice a new spender?

You might be surprised at how much others are actually willing to pay for things they like. Big spenders do a lot of the heavy lifting, and most choose to spend because they get sufficient positive value (for them) out of the game overall. My cousin’s FIFA league is an example of that - all participants are highly-paid professionals who really like soccer, so they all engage without a spending limit because it’s fun for them.

Jonathan Pine, of ALT

For pricing determination, it’s something of an optimization issue - we don’t want to charge more than most spending players are willing to pay or the value proposition isn’t there and they won’t buy at all, but we also don’t want to charge too much less than most spending players are willing to pay or we’re leaving money on the table that the players would be willing to give us. Many sufficiently-large mobile games will feel this out via A/B testing, where they distribute two slightly different versions of the same game and microtransaction offerings to their players and track spending behaviors to see which set of prices do better overall. They will also do this A/B testing to try other potential changes as well - game flow, visual design, level design, etc.

Zoe Walker says ALT

You are quite correct, however - the “regular” microtransaction offerings usually aren’t for the budget-minded or newer spenders. Most developers create different microtransaction products aimed at different types of players. Converting non-paying players to small spenders is extremely important to any microtransaction business model. Getting someone to spend the first time is a lot more difficult than getting them to spend the second, fifth, or fiftieth time (especially in a free-to-play environment). For new players, devs usually offer a variety of one-time introductory packages that are more budget-friendly and help with early- and mid- game content more than elder game content. These introductory products ease the transition from non-spending player into spending player.

Dr. Strange says ALT

For regular spending players that are more budget-minded, devs typically offer a different set of options - often more limited quantity time-based “deals”. These often aren’t the latest and greatest things released, but can provide more value to the player for the price - instead of offering the newest coolest costumes to come out, this month’s deal offers a bundle of several older costumes together at a reduced price. The fact that they are better value (if not the latest and greatest) and time-sensitive tends to make the buyers feel better about their limited purchases - they’re getting a better deal that isn’t always available.

Dave Skylark walks forward with hand outstretched for a handshake. Caption: Do we have a deal?ALT

Obviously, those who spend the most will get the most offerings. Not only are they the ones who support the game most financially, they are also the ones who consume the most paid content and demand more. Those who spend less are still valuable, which is why we will still offer them things, but they spend less so they also consume less. New players get special treatment, because new players can bounce off of a game easily and we want to keep as many new players around for as long as we can.

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