MICROTRANSACTIONS STRATEGIES IN

VIDEO GAMES AND THEIR EFFECT ON

TEENAGE PLAYERS

RESEARCH PAPER

submitted at the

IMC Fachhochschule Krems

(University of Applied Sciences)

Bachelor programme

Export-oriented Management

by

Matej TURANSKÝ

Specialisation: International Management and Business

Supervisor: Elena Porotnikova, M.A.

Submitted on: 26.05.2021
Declaration of honour

“I declare on my word of honour that I have written this paper on my own

and that I have not used any sources or resources other than stated and that
I have marked those passages and/or ideas that were either verbally or tex-
tually extracted from sources. This also applies to drawings, sketches,
graphic representations as well as to sources from the internet.

The paper has not been submitted in this or similar form for assessment at
any other domestic or foreign post-secondary educational institution and
has not been published elsewhere. The present paper complies with the ver-
sion submitted electronically.”

Date: 26.05.2021 Signature

Abstract

The purpose of this research paper is to compare and evaluate different ap -

proaches to monetization in video game industry and what effect does it have on
teenage player base. The concept of microtransactions in video games as we
know it was introduced to us over 15 years ago. Since than video game de-
velopers created many different and unique strategies with which they are trying to
create new streams of income from a single video game. Over the years there
were many new strategies that were successful. There are two main approaches
to monetization that are, in this study, represented by games World of Tanks and
Counter-Strike Global Offensive. This study compares and evaluates them in
many different aspects using both, primary and secondary data. Two surveys were
conducted to evaluate what effect those two monetization strategies have on play-
ers of those respective games and whether one strategy has advantage over the
other. The results showed that different monetization strategies affect teenage
players in many ways. Additionally, this study focused on which path should gam -
ing industry take in the future to achieve desired results. These findings were lim-
ited by multiple aspects such as lack of diversity of player base in terms of interest
in the game and the fact that Covid-19 pandemic might have adjusted the data as
many players might have changed their spending habbits.

Keywords: Microtransactions/ Video game industry/ World of Tanks/ Counter-

Strike Global Offensive/ Monetization strategies

I
Table of contents

Abstract......................................................................................................................I

Table of contents.......................................................................................................II

List of figures and tables..........................................................................................III

List of abbreviations.................................................................................................IV

1 Introduction.........................................................................................................1

1.1 Background information..............................................................................1

1.2 Problem description.....................................................................................2

1.3 Aims of the research...................................................................................3

1.4 Research design.........................................................................................4

2 The current situation in the gaming industry.......................................................5

2.1 Counter-Strike Global Offensive microtransactions description.................5

2.2 World of Tanks microtransactions description............................................5

2.3 Advantages and disadvantages of two microtransactions strategies.........6

3 Empirical findings and analysis...........................................................................7

3.1 Methodology................................................................................................7

3.2 Results of the analysis................................................................................7

4 Conclusion........................................................................................................11

4.1 Summary of the research aims and findings.............................................11

4.2 Study limitations and suggestions for further research.............................11

List of references.....................................................................................................13

ANNEX....................................................................................................................15

II
List of figures and tables

Figure 1: Reasons to buy loot boxes........................................................................8

Figure 2: Reasons to buy in-game items..................................................................9
Figure 3: First invsetment in the game...................................................................10

Table 1: Profitability indicators................................................................................10

III
List of abbreviations

CS:GO Counter-Strike Global Offensive

W.o.T World of Tanks

IV
 List of references

1 Introduction

1.1 Background information

As the online video game industry is changing and evolving is an increasing num -
ber of games that are applying the relatively new free-to-play models in which
games themselves are usually free, however, they have many microtransactions.
Microtransactions in the online game industry can be defined as a relatively small
financial transaction where players obtain some in-game content in exchange for
real-world money. Said in-game content purchased for real money is enhancing
the game experience and/ or giving advantages to its owner over other players.
“Functional items are those that provide a clear benefit in the game, such as buy-
ing a powerful weapon. Ornamental items are decorative items that have no clear
in-game benefit but allow a player to make a more unique character by for ex-
ample buying a pet in World of Warcraft. “ (Evers, Weeda, & Van de Ven, 2015, p.
21)

Many online games are played predominantly by the younger audience which can
purchase said content as much as any other player who reached legal age. There
are many different approaches to how companies incorporate microtransaction
into their online games ranging from focus exclusively on ornamental content
through items or abilities that are allowing players to progress faster in a game or
to have a competitive advantage over other players and many others. (Hamari,
2015, p. 299)

Counter-Strike Global Offensive is first-person shooter (FPS) game that was pub-
lished on August 21, 2012. (Valve, 2012). It has a large player base that is consist-
ently able to keep the popularity of this game among the highest ones on the mar -
ket. “World of Tanks is massively multiplayer online game featuring combat
vehicles from the mid-20th century” (Wargaming.net, 2009). This game is a relat-
ively old game; however, it has well-established player base that is staying loyal to
it. Both of those games are still able to be competitive in the modern gaming envir-

1
 List of references

onment. One of the reasons why being that free-to-play and players does not have
to invest their money to experience the game. The main income is generated by
microtransactions. Due to the system of microtransactions video games can gen-
erate revenue periodically as long as they are popular among players.

1.2 Problem description

Counter-Strike Global Offensive microtransaction system is built predominantly on

ornamental and cosmetic items that are not giving any competitive advantage
against other players. It only provides players with the ability to customize their
items. The community of this game can share and/or sell those items on the mar-
ketplace among each other. However, the only way how to obtain new items that
are added to games periodically can be exclusively through an in-game gambling
mechanism. “There is no doubt that the phenomenon of so-called “loot boxes” was
one of the dominant controversies discussed in the specialized gaming press in
2017.“ (Nielsen & Grabarczyk, 2018). It is considered by many people as an inap-
propriate element in the gaming industry, especially in CS:GO considering that
over 50 percent of players base are under 18 years of age which is considered the
minimum age for gambling in many countries.

World of Tanks on the other hand focuses on a more direct approach towards mi-
crotransactions. The only consistent way to obtain premium items for this game is
to buy it from the in-game premium shop for real money or in some cases alternat-
ively for premium currency “gold” that can be obtained for in-game tournaments
and/or by buying it for real money. This strategy is described by Alha, Koskinen,
Paavilainen, Hamari and Kinnunen (2014, p. 1) in their work. This game employs
many different strategies to motivate players to buy premium content. Those might
include an artificial feeling of scarcity that forces players to buy items fast because
they are time or amount limited, making progress towards some in-game goals too
difficult or time-consuming for the average player and by offering new items that
are giving players a substantial advantage over others. Those strategies might
have a negative effect on the younger audience since they might believe that they

2
 List of references

must buy new items because of fear of missing out and not being able to compete
with other players. (Evers, Weeda, & Van de Ven, 2015, p. 21)

1.3 Aims of the research

Free-to-play games are predominantly popular among teenagers since they do not
require initial investment. Since many teenagers do not have enough money to
spent on games that might not like, they are more likely to start with free-to-play
genre which is closely tied to microtransactions.

The aim of this research is to examine, compare and evaluate individual strategies
of incorporating microtransactions these two games employ and how does it affect
teenagers that play those games. The goal is to investigate how those entirely dif -
ferent approaches of monetization affect the younger player base. At this moment
it seems that both of those strategies are a viable way to reach sustainable rev-
enue in a longer period. Even though both strategies have some controversial as -
pects, they are still able to be competitive in the video gaming world and provide
entertainment for millions of teenagers that actively play those games.

After consideration of the facts mentioned above, these research questions were
developed to reach the objective of the research:

Do World of Tanks and Counter-Strike Global Offensive in-game monetization

strategies motivate teenage player base to spend their money for different reas-
ons?

 To find out whether different monetization strategies have different impact

on a teenage player.
 To identify whether teenage players are willing to spend more money on
items that will give them a competitive advantage over other users.

And if yes, which of those strategies is more effective in selling items to teenage
players?

 To determine which path should be taken by the gaming industry to sell di-
gital goods to teenage players.

3
 List of references

 To find out whether microtransactions that are connected to gambling ele-

ment in video games increases revenue from teenage player base.

1.4 Research design

The research questions required data collection and evaluation from both, primary
and secondary sources. Initially, quantitative, and qualitative data about products,
that both games offer in the form of microtransactions, were gathered from primary
and secondary sources; directly from the games themselves, websites that are fo-
cused on providing information about said subjects and/or from players that have
detailed knowledge about one of those games and how monetization affects
player bases. Because of the nature of information that were required, the quantit-
ative data about items were acquired mainly form the games themselves. After-
wards, qualitative date was gathered from experienced players that were able to
objectively evaluate selected items. Additionally, secondary data were acquired
form different websites predominantly about in-game promotion strategies and mi-
crotransaction system of games in general.

Those data were afterward processed to reflect what is the objective value of
items both games provide to players, what advantages players get from purchas-
ing them and by what means are said items promoted and sold to the player base.
The goal was to find out whether the price of the item represents how useful it is to
player or whether it is only aesthetical or combination of those two. It also reflected
what steps each game took to promote their items and what “experience” is con-
nected to it, for CS:GO it was gambling mechanism connected to it. This informa-
tion was essential to find out objective information and facts about both games that
were used to construct a survey for players of both games.

4
 List of references

2 The current situation in the gaming industry

2.1 Counter-Strike Global Offensive microtransactions descrip-

tion

CS:GO revenue model is built predominantly around selling loot boxes. This model
works in a way that new set off loot boxes is released to the players every couple
of months. Those boxes are given to players for free, player can earn them just for
playing. However, if a player wants to access the content of the box, he or she has
to purchase a key. Each key 2.25€ that are going directly to the company. The
items that are in the loot boxes are strictly cosmetical, meaning that players can be
competitive in CS:GO without spending any money. Although it might seem that
this model is not sustainable, because players would stop being interested in the
new ornamental items, the opposite is the truth. “$2.3bn worth of skins were
placed on the outcome of professional e-sport games in 2015 from over 3 million
unique users.” (Mattsson & Barkman, 2019) It was proven many times that this
CS:GO model is economically potent in a long run. It is plausible that players are
happy to invest in this game specifically because this model is not disadvantage-
ous to players that are not willing to invest more money. “If everything was achiev-
able through playing, the game was seen as fairer – which in turn could actually
make the player to eventually pay more gladly as well.“ (Alha, Koskinen,
Paavilainen, Hamari, & Kinnunen, 2014)

2.2 World of Tanks microtransactions description

World of Tanks has more sophisticated revenue model as it has many different in
game products that player can invest in. In general, it could be said that majority of
the products that are offered to the players are providing them with some sort of
advantage over other players. “One of the biggest criticisms was aimed at pay-to-
win, which means that the players with the most money to use get unfair advant-
age over players who do not use money. “ (Alha, Koskinen, Paavilainen, Hamari,

5
 List of references

& Kinnunen, 2014) There were many cases of new premium vehicles being added
that were significantly better than standard ones. Because of that it was nearly im -
possible for free-to-play player to compete with players that were willing to pay for
new content. Additionally, there are other products that are not focused on provid-
ing advantage over other players, on the other hand, they are designed to save
some time in a form of extra money or experience that player might need to unlock
new content.

2.3 Advantages and disadvantages of two microtransactions

strategies

There are many different advantages and disadvantages the two microtransaction
strategies have as they are fundamentally different from each other. The benefit
that CS:GO has over W.o.T is that it is fair; every player has equal opportunity to
be competitive, even without investing any additional money. “Only games where
the player can both purchase random rewards and sell them using ‘real world’ cur-
rencies can be considered gambling.“ (Nielsen & Grabarczyk, 2018) This essen-
tially describes how CS:GO monetization strategy works; this is the biggest disad-
vantage of this model as the majority of the players should not be allowed to
gamble as they are too young.

The advantage of the W.o.T model is that it is not tied to gambling at any level.
Even the occasional gambling elements are providing the same or even higher
value for money, in the most unfavourable outcome than buying the items that
were won directly. The problem with this model rises with the fact that it heavily fa-
vours the players that are willing to invest a lot of many regularly. “Furthermore,
Hypothesis 2 is confirmed as players respected those who buy in-game functional
advantages less than those who bought ornamental items.“ (Evers, Weeda, & Van
de Ven, 2015) Meaning that W.o.T model is potentially creating undesired gaming
experience for players that are willing to spend more money compare to CS:GO
model.

6
 List of references

3 Empirical findings and analysis

3.1 Methodology

This survey consisted of qualitative and quantitative types of questions that were
focused not only on multiple aspects of monetization and the product themselves
and the role they play in the game but also on how they feel about the monetiza-
tion strategy their game employ. Some questions were also be focused on finding
out what teenagers’ motives are to spend their money on specific virtual goods.
Results of the survey reflected what and why are teenage players willing to buy in
game – this information was essential in answering both research questions. The
survey was distributed to teenage players through game forums on the internet
and/or through other channels.

The data that were extracted from this survey were processed and separated into
two sets: one for each game. Those sets were afterward compared to each other
to find out what player bases think about individual aspects of their games. Based
on those findings it was possible to identify the advantages and disadvantages of
both strategies that those two games us.

3.2 Results of the analysis

To understand what impact these two monetization strategies, have on teenage

player base a survey was developed. Two questionnaires were developed, one for
each game, and distributed to both player groups, respectively. The sample was
taken from the whole teenage spectrum, meaning it includes new and experienced
players. The average respondent has 17 years, started playing their game in
2016-17 and has over 1000 hours played in one of the games.

Both monetization strategies are approach the player, potential customer, differ-
ently. This makes comparison between them complicated as both are constructed
to fit their respective games, meaning one of those strategies would not necessar-
ily be as successful when applicated to the other game. However, both strategies

7
 List of references

can sell their content to the player base as 89 per cent of CS:GO players and 97
per cent of W.o.T player purchased in-game item at some point of their gaming
carrier is said games.

The main difference of the strategies is that CS:GO, compared to W.o.T is built
around opening loot boxes as trading with items does not represent core of their
business model. However, as can be seen in figure 1, only 43 per cent of CS:GO
respondents did bought loot box at some point compared to 90 per cent of W.o.T
respondents. The reason why are W.o.T loot boxes more desirable is simply be-
cause they are providing greater value to player rather.

Figure 1: Reasons to buy loot boxes

100
80
60
40
20
% of respondents

W.o.T
CS:GO

Source: Author’s chart

While CS:GO monetization strategy is built around gambling elements in the form
of loot boxes, W.o.T has capitalized on simplifying the game for people who are
willing to pay for it. The game itself is optimized for this strategy by requiring ex -
tensive amounts of play time to reach its goals. Therefore, players naturally desire
to accelerate this process and as expected 100 per cent of W.o.T players prefer
items that give them some sort of advantage rather then items that would be only
cosmetical. CS:GO, while more competitive, has player base with more equally
distributed preferences of 54 per cent players preferring cosmetic items over items
with advantage. However, CS:GO preference ratio would have to be examined

8
 List of references

more closely since implementation of such elements would rewrite the game to its
roots.

There are extensive difference in approaches that both games have to convince
player to purchase something. W.o.T has the fundamental advantage over CS:GO
of offering items that are providing some tangible in-game benefits, mostly by sav-
ing time to reach the goal. This reflected in response where approximately 60 per
cent W.o.T respondents stated that their initial and current reason to buy in-game
items compare to 15 per cent CS:GO respondents as can be seen in figure 2.
While W.o.T is predominantly capitalizing on value for money and desirability from
new players to experienced players respectively, CS:GO is mainly focusing on
cosmetical items and player’s motivation to possess them as 54 per cent of
CS:GO respondents stated it as their both, initial and current, reason to invest
money in the game which is represented in figure 2.

Figure 2: Reasons to buy in-game items

60

40

20

0
% of respondents

fe
r ed m
e i t) ey s"
of oo
k
g a
ire
d on ite m
d l e s rm
ite m th d e fo t by
l im ite to
f s ue no
as id er l
w sa p ec l ay va d o
It as tp od "I
ow os
h in
g go
ed bl (m
li k am bl
e
e g ra
av try si
Ih to de
ed as
a nt w
w m
e Ite
h av
CS:GO
I (first time) W.o.T (first time) CS:GO (now) W.o.T (now)

Source: Author’s chart

It is difficult to define what determines the success of the strategy as both ap-
proaches have both, monetary and moral, advantages and disadvantages. 97 per
cent of W.o.T respondents invested money in the game at some point which is su-
perior to 89 per cent that CS:GO has; additionally, 83 per cent of W.o.T players

9
 List of references

are still actively investing money in the game compare to 53 per cent of CS:GO
players which makes W.o.T look as more sustainable model assuming that players
base stays active. As can be seen in table 1, W.o.T respondent on average inves-
ted 599€ compare to CS:GO’s 497.64€. W.o.T model beats CS:GO in amount
spent on loot boxes by player by more than double. However, it is essential to take
into account that average time spent in game in significantly higher for W.o.T re-
spondents which shifts the “€ per hour” in favour of CS:GO as it earns 0,47€ per
hour compare 0.42€ per hour.

Table 1: Profitability indicators

CS:GO W.o.T
average invested (€) 497.64 599
average invested in loot boxes (€) 63.39 145.66
average hours played 1059.57 1424.67
€ per hour 0.47 0.42
Source: Author’s chart

Players are also more inclined to invest faster to CS:GO compare to W.o.T. Major-
ity (53 per cent) of W.o.T respondents purchased their first item after the first year
of playing the game, while CS:GO respondent’s first investment in game is more
equally distributed along the whole spectrum which is shown in figure 3.

10
 List of references

Figure 3: First invsetment in the game

80

70

60
% of respondents

50

40 W.o.T
30 CS:GO

20

10

0
Never After the first In the first In the first 6 In the first In the first
year year months month week

Source: Author’s chart

11
 List of references

4 Conclusion

4.1 Summary of the research aims and findings

This study has explained how various forms of microtransactions in online video
games motivates teenage player base to spend their money for different reason
and whether they affect teenage player base in different way. Further, it identified
that microtransactions strategies and the way the game is built has, to some ex-
tent, impact on whether players are willing to spent additional money to gain com -
petitive advantage over other players.

Additionally, this study compared two successful monetization strategies and eval-
uated how successful they are in their own respective way. It was found that
strategy that is based on selling items that provide some tangible value to the
player and provide in-game advantage over others takes longer to take effect as
player must be invested in the game enough to be willing to pay for some form of
advantage. However, is more sustainable compared to the strategy that is focused
on selling ornamental items, which takes effect faster as player are acting on their
desire compared to their focus on improving their gaming experience, as its effect
fades over time.

4.2 Study limitations and suggestions for further research

One of the main limitations of this study is that the primary data were collected
from players that are invested in the game enough to be willing and able to evalu-
ate how they feel about monetization strategies of their respective game. This
means that missing sample of players, the ones that are playing the game to
lesser extent or are not invested in it as much, could adjust the data.

Additionally, to compare both strategies completely and fairly, it was necessary to

present players with the idea of new items that would adjust gameplay and give
them advantage in the case of CS:GO. This is a limitation as it difficult for players

12
 List of references

to evaluate how they would feel/ be willing to accept this change as it is dramatic-
ally changing foundations the game is built up on.

A further research could focus on larger sample of players and compare how said
strategies affect player in the different stages in their respective game, based on
how many hours player spent playing already and compare which strategy is more
effective in what stage. Secondly, further research could compare how did pan-
demic affect players decision to invest money to their respective game and which
strategy is more optimized for it.

13
 List of references

List of references

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Play Games: Professionals’ Perspectives. Tampere. Retrieved December
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dicdigra2014_submission_8.pdf

Evers, E. R., Weeda, D., & Van de Ven, N. (2015, October 1). The Hidden Cost of
Microtransactions: Buying In-Game Advantages in Online Games De-
creases a Player’s Status. International Journal of Internet Science, pp. 20-
36. Retrieved December 7, 2020, from https://pure.uvt.nl/ws/portalfiles/
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Hamari, J. (2015). Why do people buy virtual goods? Attitude toward virtual good.
International Journal of Information Management, pp. 299-308. Retrieved
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+world+of+tanks&ots=6sjXqrXh7r&sig=_tNnFnAQ8nuj2xbxuVb3jOH5psM&
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King, D. L., Delfabbro, S. M., Dreier, M., Greer, N., & Billieux, J. (2019, Decem-
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Li, W., Mills, D., & Nower, L. (2019, October). The relationship of loot box pur -
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encedirect.com/science/article/abs/pii/S0306460319301091

Martinelli, D. (2017, October 1). SKIN GAMBLING: HAVE WE FOUND THE MIL-
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Mattsson, M., & Barkman, S. (2019). Microtransactions and lotteries in video-

games. University of Borås. Borås: University of Borås. Retrieved 5 14,
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Nielsen, R. K., & Grabarczyk, P. (2018). Are Loot Boxes Gambling? Random. IT
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game_economy/

15
 Annex

ANNEX

16
 Annex

Table of annexes

Annex 1 [CS:GO questionnaire]..............................................................................17

Annex 2 [W.o.T questionnaire]................................................................................22

Annex 3 [Anlaysis of the data from the questionnaires].........................................27

17
 Annex

Annex 1 [CS:GO questionnaire]

18
Annex

19
Annex

20
Annex

21
Annex

22
 Annex

Annex 2 [W.o.T questionnaire]

23
Annex

24
Annex

25
Annex

26
Annex

27
 Annex

Annex 3 [Anlaysis of the data from the questionnaires]

28