Online games and in-game purchases

We recently talked in class about in-app purchases for free to play games and how they have been a big part of the game industry since they end up making the developer more money then some paid games. And there is a game I have been playing since a couple years and some of you probably are familiar with it, Texas Hold’em Poker by Zynga. Zynga has been in online gaming industry on social networks mainly since a long time and has been one of the very large players making a ton of money by making free-to-play games. They earn revenue from in-game purchases like in-game cash and coins.

The in-game purchases start from a minimum of like $5 all the way up to $100. And a lot of people actually buy them. This is mainly driven from friends playing together and having to compete. I have previously in the past purchases poker chips once so I can enter a large table with a higher minimum buy in. After a long time when I accessed the game again to have a go at it I found out that people are still playing the game as much as they used to play game before. And not only are some people spending money buying chips from Zynga but some are actually also making money by stocking up on chips in winnings and then selling them illegally to other users for a competitive price compared to buying it officially.

Clearly this is one of MANY examples of people making money off online games by selling in-game things. And I think this is a very interesting idea and I wonder how much the companies hate this idea of people making money selling things without them being a part of it.

This entry was posted in Uncategorized. Bookmark the permalink.

10 Responses to Online games and in-game purchases

  1. Terry Lee Miles says:

    I think the point here is people will buy things in games regardless of how much it is or what it is. People play these games all the time and get addicted to them kind of like real life poker however with the only return in this game being virtual currency the red in the bank will always be red. These players will find a way to turn that red into black and they useally turn to money trading sights and communicate on third party devices in order to secretly carry out their transactions. The thing is if game company’s found a way to manage this cash flow they could really profit on the person to person trade. Say a user sells his in game currency for real life money outside of the game, the company gets nothing. if the company managed this transaction they could take a percentage of the real world currency say as a management fee and profit off of these outside transactions.

  2. Don Bosco Hoang says:

    It’s interesting how people can sell in-game currency for real world currency. I suppose I’m not surprised that this happens in your online poker game because I’ve encountered countless games where people sell in-game currency for real world money (Path of Exile and Diablo 3) or people sell their entire accounts for money (League of Legends). The discussion of illegally selling in-game valuables is very different. The only thing wrong with the situation is that the game developers frown upon it and in many games, it’s outlawed in the terms of agreements for online play. If you think about it though, there’s nothing really wrong to this ethically. It’s demonstrated today in the world. And it’s actually required for an economy to be functional. The idea of someone offering a good or service for something at an arguably cheaper or different but enticing means of branding and selling. That’s competition for you.

  3. mdr5325 says:

    Reading this post reminded me of companies that sell in game gold in World of Warcraft. Personally, back in my prime, I did indulge in buying gold a few times. To amass the amount of gold that you would need sometimes would take more time than I really wanted to put into it, and the amount of money I would have to drop seemed reasonable for the hours that would be required.

    Needless to say, Blizzard does not condone this whatsoever (http://us.battle.net/wow/en/shop/anti-gold/). It spawned somewhat of an underground community that would try and steal gold from other players to make a few bucks. It became a full time job on Blizzards part to try and combat these people and deal with all of the angry players who had been hacked. A quick aside, I was once pleasantly surprised by being hacked. My password had been changed, and by the time I was able to get back on after contacting blizzard, all of my gear had been sold. I was pretty panicked until I realized that the hacker was in the process of moving materials through my character when he was kicked off. After having my gear restored by blizzard, I was left with an ungodly amount of likely stolen rare materials. In the end though, I think this kind of underground activity is a net bad on the whole community.

  4. Andrew Ryan Knittle says:

    My brother sold his high-level Star Wars: TOR account for over $300 some time last year on a 3rd party website that deals in these types of transactions. At first I was suprised – I definately would never spend that much money on something in a game that I could earn myself. But it turns out that there’s actually a huge market for this type of thing across all MMOs and it’s sort of weird that BioWare doesn’t take advantage of it.

  5. Sean Lane says:

    I think that everyone should keep in mind that Blizzard tried this with their Diablo 3 real money auction house. It was perilously easy to spend a lot of money on items (where Blizzard would take their cut,) as well as it was easy to place things up for sale. And yet, this system was still left behind for some who still opted for the unsanctioned trading methods.

    As noted above, this kind of thing still happens for several games on Steam, WoW, and other MMO’s. My personal theory is that this is an application of a simple fact of life: people just need to get a deal, and refuse to take an offer if they think a better deal could be had. If you buy from an auction service or marketplace at the current market price, it is unknown as to whether or not you could have received it cheaper. By trading outside the system, you get the sought after “alternate offer” and can finally compare. I imagine it to be like buying a used car. You surely have an official used car dealership nearby, but why use that when you can search for independent sellers and maybe get a better deal? It is the exact same mindset at work.

    Video game developers also probably shy away from legitimizing marketplaces for another reason: legality. One thing that Steam is notably missing from their market is that you can’t withdraw your money. This is on purpose, as previous attempts from Blizzard (with the aforementioned real money auction house) resulted in real life money laundering: http://www.cnet.com/au/news/my-paypal-was-hacked-to-buy-dodgy-diablo-iii-gold/

    This also shoves home the point that people want to be able to “withdraw” their money from these services, and in the realistic future will not be able to do so. This pushes them to third-party markets where that feature may actually exist.

  6. Jeffrey Lau says:

    Yeah I agree with Dylan, this pisses off MMOs a lot more than other developers in my opinion. Most games where this is even plausible have very good mangement systems in place for it, like the aforementioned Dota2 and steam marketplace. Why sell a Dota2 item elsewhere when it’s so easy to do on the steam marketplace? MMOs are a bit more tricky, but the same thing can be done. I still dont understand why Blizzard hasn’t implemented a account trader system like EVE Online has: . People here buy and sell characters with in-game currency (ISK). Keep in mind that the ISK can be bought with real money as well. If Blizzard allowed this, I think not only would it attract people to the game, but they could even pull off making money from it. It happens anyway, why not make it “sanctioned”?

  7. Bradley Keith Ragazinsky says:

    I don’t think most companies care about people making money off in game items. I know valve has made partnerships with some companies that sell their in-game counter-strike and dota items for money. Valve personally makes 8% commission each time someone makes a sale on their steam community market.

    Other games, such as League of Legends, don’t even allow you to manipulate your items after purchase. I personally think these companies are losing out on money because some skin codes can go for upwards of 400 dollars. If Riot allowed for trade of items, they could easily pull in tons of money.

  8. Xianling Zhang says:

    Talking about buying game items offline, I have purchased a champion with 10 dollars, because it will be very time-consuming to keep playing to reach a certain level, I just choose the short-cut to skip all the practice I shall spare in the game, and get a champion at level30 directly. Originally, I tried to level up the champion by myself, but I found that the beginning levels from 1 to 5 are fine to handle. However, I would at least spend a whole day to obtain the points for next level. Under this situation, playing the game became very boring and mechanical, which I could not stand with. This is the first and only experience I spend extra money to buy stuff offline. I mean, if the game is interesting enough and the storyline is attractive enough, then things like I have mentioned will not take place.

    Another topic about in app store purchase, I do buy a lot games in play store and app store, because comparatively, the game with certain price can be of high quality, otherwise nobody will spare even a penny. When the price is about 5 dollars, I will just go through the comments below. When the price of the game is go beyond 5 dollars, I will do more research on the game. If necessary, I will watch some review videos online.

  9. erb5257 says:

    I don’t think in-app purchases are Zynga’s online form of monetization. Scramble with friends is an app that they charge 1.99 for and there are also IAPs in that game too. I think Zynga’s diversity of monetization techniques has led to them being very successfull in the mobile game industry,

  10. Dylan Richard Bricker says:

    This sort of thing is handled differently and viewed in a different light depending on the company. I know that a lot of MMO creator’s frown upon this kind when it comes to people buying in-game currency. Quite a few of them have even begun ‘officially’ selling it through their own channels and banning or infracting accounts that don’t follow this method. On the other hand, Valve doesn’t really seem to mind when they potentially miss out on hundreds or even thousands of dollars from CSGO trading or TF2 hats. Interestingly, this is a pretty universally disliked system, yet people still do it. Makes you think.

Leave a Reply