Massively

One question that has showed up more than a few times at the recently concluded GDC08 is the viability of microtransactions in MMOs. What are microtransactions, anyway? For those not too familiar with the term, it refers to an interesting game revenue model whereby users pay for individual game components, whether it be items, unlocking new levels, access to dungeons, etc. When the question about microtransactions was brought up at the Future of MMOs panel, there were many strong reactions from the panelists. Most of them scoffed at the idea, Blizzard -- supposedly popular for creating some sort of fantasy MMO -- in fact, has already officially rejected the model. Cryptic Studios' Jack Emmert called microtransactions "the biggest bunch of nonsense," (some transcripts show that he had harsher words for it) and that they "make (him) want to die". Although I can't attribute this quote directly to anyone, microtransactions have been defined as "any transaction whose value is currently too small to be worth bothering with" -- pegged at somewhere below US $1. The only one at the panel who defended the revenue model was Nexon's Min Kim, notably the only Asian among the panelists. Why is this notable? Well, Blizzard's Rob Pardo defined it as an "East vs West question", which Emmert dismisses. But Pardo is actually on to something, and I'll try to explain why.

Free-to-play MMOs supported by microtransactions is the dominant revenue model in Asia. This isn't an accident of design. It's an evolution of revenue philosophy shaped by social and economic conditions. Let's put that in perspective. Most people in the world do not have computers let alone an Internet connection. This is why Internet Cafés are so prominent in Asia. In South Korea, these Internet Cafés, or PC baangs, are ubiquitous, with more than 20,000 serving up games and other Internet content all over the country. Although of course, South Korea is exceptional. 90% of the population is wired and PC baangs became popular because of LAN games. But elsewhere in Asia, Internet Cafés or LAN rooms are a popular, if not dominant, way to access LAN game and MMOs particularly China, Taiwan, and the Philippines.