A Little Here, A Little There…

// Posted by on 03/03/2013 (11:12 PM)

My first thought when I saw that our weekly topic was “consumerism” was the impact that micro-transactions have had on our culture. Simply put, micro-transactions (or micro-payments)¬†are transactions of small sums of money, usually less than $12. They are widely used on digital platforms for applications as well as purchases of credits (like on XBOX Live).

The transfer of small sums of money has always existed; however, the transfer of money for intangible, digital goods is a relatively new phenomenon. Have you ever gotten an app from the Apple App Store that has costed around $0.99? That’s a micro-transaction. What about buying 800 Microsoft points on XBOX Live for $9.99 in order to buy a game? That’s another example.

The use of micro-transactions exploded mainly because of the music industry. In the past, people had to physically walk into stores to buy one CD filled with songs. With the advent of digital music downloads, though, those very same people now had the ability to buy individual songs through micro-transactions. They were saving money, because they were only spending money on the tracks they wanted to hear.

There is a problem, though. The occasional $0.99 purchase is not bad, but the accumulation of many $0.99 chunks of money equates to surprisingly large amounts of money being spent on things that are not tangible. At the end of the day, all of that money equals bits and pieces of data behind a screen. Plus, most apps that are both popular and free on Apple’s App Store usually require a small fee to get rid of ads, get more features, etc. This changes the way that consumers interact with their purchases; for just a little more money, they can get just a little bit more out of their products. This can result in developers only releasing partially-completed or restricted apps, knowing that people will be willing to pay even more to get the complete product.

There are a ton of examples of micro-transactions in today’s news. Here is one that pertains to a very popular survival-horror videogame, Dead Space 3. Electronic Arts, or EA, implemented a micro-transaction system to the game that lets gamers buy new weapons, armor, etc. Despite EA’s optimism that the implementation of micro-transactions is going to be a good thing, public response has been almost completely negative. Here are just a few comments from this thread:

“Parents who have no idea what their kids are doing with their credit cards are enjoying and embracing that way of the business.”

“Honestly, I wouldn’t mind micro-transactions so much if it meant the actual game was cheaper or free. But that’s not going to happen, is it?”

“I remember when unlocking items/characters/levels was due toplaying, not paying.”

“We will vote with our wallets.”

This is just one example. My question to you is: is this a bad thing? 20 years ago, would you have been willing to buy a book at a bookstore and then pay a little bit more to “unlock” the conclusion? How far are we willing to let micro-transactions take over the way digital commerce is run?

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Celia said...

I actually think about this all the time…How a dollar isn’t really a big deal for a song or an app. The debate is endless in my head and almost always, I end up paying. When I was abroad in Australia, I couldn’t figure out how to watch TV shows without buying them on iTunes because Hulu, Netflix, etc. did not stream video on the Aussie net. I ended up spending a ton of money on iTunes shows because in the moment, $1.29 for an episode was so satisfying. Needless to say, I kicked that habit. The point being, I think markets have successfully targeted us and our willingness to pay for these little things. When you talk about a few dollars, it doesn’t freak you out, but looking at an iTunes bill over a month can be chilling.

// 03/04/2013 at 11:06 pm