What is In-Game MTX (Microtransactions)?

In-game MTX (microtransactions) are payments made within a game or software application that give users access to various virtual goods or services in exchange for real money. 

In-game MTXs are a frequent practice in free-to-play games or subscription-based software, becoming a revenue source, important in maintaining the product.

In-game microtransactions can be of different types: 

• Consumables: Temporary items or boosts, like energy or power-ups.
• Non-consumables: Permanent items, often cosmetic or functional enhancements.
• Subscriptions: Access to premium product versions or recurring features.
• In-game currencies: Tokens used to purchase other items or content.
• Loot boxes: Various rewards; these are increasingly being replaced by battle passes with predictable progression.
• Direct purchases: Specific items bought outright with known value.

In-game MTX processing functions in the same way as all online payment processing. It requires integration with payment solutions, such as the merchant of record. 

Der Prozess umfasst folgende Schritte: 

1. The player makes a purchase. 
2. The system sends the transaction request to a payment gateway. 
3. The gateway passes your info to a Payment Processor, which sends the info to the player’s bank. 
4. Once the bank approves, the transaction is accepted, and the player receives the virtual item or service. 

In-game MTX have an increased frequency, which emphasizes the developer’s need to integrate with a payment solution that can deliver fast and secure payment, avoiding delays or false payment declines.

In-game MTX have both pros and cons when used in any monetization strategy. These include: 

In-game MTX strategies focus on player experience and profitability through: 

• Player-centric design: Consider keeping the gameplay uninterrupted or use a pay-to-play system.
• Datengestützte Erkenntnisse: Collect data to identify behavioral patterns and make changes to suit those preferences. 
• Ethical monetization: Focus on cosmetic items, convenience features, or optional content rather than essential progression.
• Flexible offerings: Combine various elements like subscriptions, cosmetic MTX, and DLC packs to sustain various preferences.

In-game MTX is a topic that needs to be considered from an ethical standpoint. And here is why: 

• Pay-to-win mechanics exclude players who are unable to spend over a specific amount. 
• Loot boxes and random systems can resemble gambling, and this can affect minor players. 
• The frequent nature of in-game MTX encourages compulsive spending.

In-game MTX is subject to different regulations, based on the regions. Developers need to account for different regulation types, like transparency or consumer protection.

One of the biggest operational hurdles a game or software developer can face when selling internationally is tax and compliance management. Industry regulations are many, and they are constantly evolving. Simply tracking the changes is time-consuming, not to mention applying the requirements.