Online Microtransaction Market - In-Depth Analysis by Size

Global Online Microtransaction Market Overview

Online Microtransaction Market Size Was Valued at USD 74.15 Billion in 2023, and is Projected to Reach USD 228.13 Billion by 2032, Growing at a CAGR of 13.3% From 2024-2032.

Fast technological progress and better connectivity have allowed the video game business to expand annually and achieve its current level of success. Video games are currently the most profitable industry in the entertainment sector due to their enormous rise in popularity throughout time. The bulk of free-to-play games including many freemium titles and games with a regular pricing structure include micropayments.

• Online microtransactions are defined as minor monetary transactions carried out on the internet, typically revolving around buying virtual items or services in online games, apps, or digital platforms. Said transactions usually consist of modest sums of money, allowing users to purchase virtual items, in-game currency, cosmetic upgrades, or other digital content. The growing frequency of in-app purchases within mobile applications.
• Online microtransaction market relies on virtual storefronts, payment gateways, and secure digital transaction methods. A virtual storefront is the primary platform where shoppers browse, select, and purchase digital products. Payment gateways ensure secure transfer of funds and maintain the integrity of online financial transactions. In addition, dependable digital payment systems, often integrated with popular payment methods, are crucial for providing a smooth and secure user experience.
• In-app purchases (IAP) enable users to purchase digital goods, content, or features within mobile apps or software, especially in free or freemium apps. The inclusion of in-app purchases is likely to boost online microtransactions by offering users an easy way to buy digital items and content, ultimately increasing revenue in the online microtransactions industry.

Market Dynamics And Key Factors For Online Microtransaction Market

Drivers:

Rise Of The Gaming Industry

The concept of online connectivity transformed the gaming industry. DLC (downloadable content) has proven to be effective in encouraging gamers to pay for things after the game has been released. DLC is a forerunner to what is now known as online microtransactions and is an aspect of gaming's secondary market. Online microtransactions have had the most significant impact on the video game industry, which is constantly changing. Game developers have figured out how to make the most of this new cash stream. Only 5 to 20% of game communities are thought to engage in online microtransactions, and the amounts they spend varies. However, the cash earned by free-to-play games is large, this is still a significant amount. These companies' executives want to monetize the non-participating player base in the online microtransaction community thus, driving further growth of the online microtransaction market over the projected timeframe.

Restraints:

Different Gaming Experiences For Players Not Partaking In Online Microtransaction

The microtransaction-based approach to generating money from video games is at the forefront of the gaming industry. This is where the trouble starts since most developers struggle to keep the balance in online Player versus Player games and end up creating pay-to-win games. Microtransactions are used in most games to provide a better experience and content, which provides an unfair experience for those who use the default game content. Despite having strong skills, this type of DLC (downloadable content) often outclasses players with default content thus, hampering the development of the online microtransaction market during the projected timeframe.

Opportunities:

With much of the world adopting social distancing for much of 2020 and into 2021, interest in the multibillion-dollar online gaming industry has continued to grow, with people who have never played before taking up the hobby. Players took use of their unprecedented free time to learn new skills and tactics that could one day be shown on television as part of an esports championship as popular as the Super Bowl or the World Cup final. As the number of people who play online games grows, so does the amount of money spent on in-app purchases. Users can spend real money for features or items while playing a mobile game using online microtransactions or in-app purchases. Players that spend money on in-app purchases get a premium gaming experience. At the same time, it is a very valuable and popular revenue source for game developers thus, creating a profitable opportunity for the market players.

Segmentation Analysis of Online Microtransaction Market

By Payment Model, prepay segment is anticipated to dominate the growth of the online microtransaction market. With the prepay model, a customer authorizes the game developer to charge their card for a certain amount, which is usually converted into a virtual currency. That currency can then be used to purchase game items. Prepay transactions avoid the undesired charges that may arise in the post-pay transaction method thus, strengthening the growth of the segment.

By Type, the in-game items segment is expected to lead the development of the online microtransaction market during the analysis period. One can buy in-game items and pay to unlock a variety of characters, each with their own set of skills and playstyle. The most popular in-game item skins. Skins merely alter a character's appearance but provide no additional functionality. Skins, on the other hand, give the character more personality, and given the psychological investment players have made in the game, it's almost as if they're buying clothes for themselves. Gun skins are also popular among users, and popular games such as PUBG and Fortnite offer several gun skins. The growing spending on in-game items is expected to increase over the analysis period.

By Device, the smartphones segment is expected to have the highest share of the online microtransaction market. According to a Statista survey, 68.1 percent of respondents claimed they played games on their smartphones, making it the most popular gaming device on the globe. Mobile gaming gives players greater accessibility, gamers can play games anytime and anywhere. Moreover, mobile gaming has helped people living far apart to come together. Mobile gaming has become a trend to maintain family relations and this trend is expected to grow over the projected timeframe. Most individuals are getting exposed to games due to the growing smartphone penetration. Individuals playing the game on a smartphone are more liable to purchase in-game items and currencies thus, supporting the development of the segment. 

Regional Analysis of Online Microtransaction Market

The Asia-Pacific region is anticipated to lead the growth of the online microtransaction market over the forecast period. Gamers in South Asian countries are gaining access to an ever-changing ecosystem. Users in this region are maturing in their approach to numerous genres, casual, mid-core, and paid games, owing to the increasing smartphone and internet penetration and the world's lowest data tariff. According to a PwC report, the total revenue generated by the in-game microtransactions accounted for one-third of the total games and esports in Australia. Moreover, the growing popularity of PlayerUnknown's Battlegrounds (PUBG) Mobile, Among Us, and Pokémon GO is expected to propel the growth of the online microtransaction market over the forecasted timeframe.

The North American region is anticipated to have the second-highest share of the online microtransaction market during the projected timeframe. According to the latest Entertainment Software Association (ESA) report, the United States has a total of 226.6 million video game players of all ages, up nearly 6% from 214.4 million in 2020. The estimates vary depending on the source and demographics surveyed, but it is estimated that three out of every four Americans play video games on various consoles, with more than half of those playing on their mobile phones. As 4G speeds improve and core users migrate to 5G, more individuals are opting to play games on their smartphones, it is anticipated that mobile gaming will be an ongoing and major contributor to the development of the online microtransaction market projected timeframe.

The online microtransaction market in the European region is anticipated to develop at a significant growth rate attributed to the growing popularity of gaming consoles and PC gaming. Beyond the sale of game titles and gear, the rise of subscription gaming services and cloud gaming has opened up new revenue streams. Without the assistance of a game publishing company, independent game developers can create and launch their games. Gamers, on the other hand, can make money through tournaments and social media streams. The online microtransaction market in the European Union is powered by the vibrant gaming markets of Germany, the United Kingdom, France, Italy, and Spain. According to Statista, the UK, Germany, France, Italy, and Spain had 46.7, 39.1, 36.5, 30.6, and 24.6 million gamers in 2021. The study also stated that mobile phones were the most popular devices to game on among UK gaming audiences. The gaming population is expected to increase over the forecasted timeframe thus, boosting the growth of the online transaction market.

Players Covered in Online Microtransaction Market are

• Activision Blizzard Inc.
• Alipay
• Boku
• Entercash
• SecurionPay
• Worldpay
• Xsolla
• NCSoft
• Riot Games Inc.
• Nexon Co. Ltd.
• SmileGate (CrossFire)
• Wargaming.net
• NetEase Inc.
• Valve Corporation
• epay
• famehype and others.

Recent Industry Developments In Online Microtransaction Market

• In May 2024,The Worldpay^® PayFac™ suite of services to operate their payments services can now enable Tap to Pay on iPhone for their merchants. Two PayFac partners, Fullsteam and Autobooks, have launched the new service from Worldpay, which allows their merchants to use an iPhone to securely accept contactless payments including contactless credit and debit cards, Apple Pay and other digital wallets no additional hardware needed.
• In Oct. 2023, New sensation that’s been sweeping Azeroth, when Blizzard Entertainment’s mobile action strategy game Warcraft Rumble^™ launches worldwide on Android and iOS devices, live at BlizzCon! In taverns from Winter Spring to Booty Bay, Horde and Alliance alike are gathering around a marvelous new machine, which brings miniature versions of their famous heroes and villains to life to do battle in strategic, frantic skirmishes.