The Death of the Single Transaction (and the Birth of the Gaming Addiction)

With such headlines popping up as "Teenager kills girl to feed video game habit" and "Teen Beats Mom to Death Over Playstation," many perplexed individuals are increasingly concerned about the highly addictive nature of the modern video game. Others wonder why they keep returning to the lousy Farmville game to check on their virtual livestock. The answer lies in the fundamental change in the video game marketers' business model: the shift from single transactions to multiple micro-transactions. 

In the humble origins of the home console, the consumer would physically drive to the nearest store and buy a video game for between 20$ to 50$.  That single purchase used to be all the revenue that the game developer could make from that consumer for that particular video game.  Moreover, the revenue generated would be the same if the person played the game for 30 minutes or played it for 200 hours.  The marketers' and developers' only task was to get the game off the shelf and nothing more.

The advent of the internet and the facilitation of micro-transactions has ultimately changed that business model.  The developer can now sell more to the consumer while the consumer is playing the game, resulting in many opportunities for micro-transactions.  In Farmville, the player can buy extra coins in the video game for real-life money.  In World of Warcraft, the player has to pay a monthly subscription fee to continue playing the game.  Even free-to-play video games gain more revenue through advertisements!

This new change in the video game business model has provided game developers with every financial incentive to make their game more addicting to the consumer.  The more a consumer plays a game, the more likely he/she will make an in-app purchase or view more advertisements.  As responsible consumers of digital entertainment, we need to be aware of the motivation behind the addictive properties of video games so we can more easily avoid crippling video game addictions.  At the very least, we can have a great excuse handy as to why we didn't accept our Facebook friends' Farmville invitations.