Microtransaction

A microtransaction is a small, in-app or in-game purchase of digital goods or services offered within a software application. Microtransactions are common in free-to-play games and mobile apps, where the base product is provided at little or no upfront cost and revenue is generated through optional purchases.

Typical items include cosmetic skins, character outfits, weapon skins, emotes, virtual currency, boosts, extra lives, or access to additional content. Other forms include loot boxes or randomized rewards, sometimes called gacha, where the payout is not known until purchase. Purchases are usually made through storefronts integrated into the app or game.

Economic model: Microtransactions allow developers to monetize a broad user base while keeping the base product accessible. Revenue often depends on a minority of highly spending players, or whales. They can extend a product's lifecycle by funding ongoing updates, events, or seasonal content.

Criticism: The model has raised concerns about player manipulation, gambling-like mechanics, and escalation of spending. Critics argue that loot boxes and other mechanics can encourage compulsive behavior, particularly in younger players. Regulators in several jurisdictions have examined or regulated loot boxes and other microtransactions, focusing on disclosure, age checks, and consumer protections.

Examples: The practice is widespread across console, PC, and mobile games, with prominent examples including free-to-play titles that monetize through cosmetic items or loot boxes. While some goods are purely cosmetic, others can affect gameplay balance, leading to ongoing debates about fairness and accessibility.

As digital platforms evolve, microtransactions continue to influence design choices and monetization strategies across software ecosystems.