Wednesday, February 25, 2009

Microtransactions Could Change Use of Internet

Microtransactions or micropayments are “means for transferring very small amounts of money, in situations where collecting such small amounts of money with the usual payment systems is impractical.” This system of collecting small payments has been a new source of revenue for companies who provide content over the Internet.

The South Koreans were the first to pioneer the concept of microtransactions as a viable business model for video games and mobile gaming. In the gaming world, revenue is created in small increments by getting players to purchase items or money in the game for an enhanced gaming experience. These small payments, over time, have added up to a considerable amount, and have proven to be quite successful for Korean gaming companies. On average, they have created 30-40% extra revenue and up to 300% in some cases. Certain ell-structured games have the potential to generate revenues in excess of the revenues made from actual downloads.

This is a thought-provoking concept that marketers could adapt to fit any company web site, blog, or widget. By creating an interactive site with fresh content that people want to see time and again, companies can leverage avatars or games with microtransaction add-ons as an additional revenue stream. While this would likely only be successful with major name brands with exciting content that drives customers to continually return to the site, it could also be used as a temporary tactic to increase brand awareness.

Later on, when wireless mobile carriers shift to “more innovative ways of generating data revenues from their more stable client bases…microtransactions are likely to team with an evolved form of digital advertising to help shape the evolution of this young industry.”

Source: http://emagazine.credit-suisse.com/app/article/index.cfm?fuseaction=OpenArticle&aoid=222634&coid=118&lang=EN

No comments: