The TREND towards MICROTRANSACTIONS

[etheris 0]

I believe Micro-transactions will be the future. If you look at companies like Google, Facebook, Twitter these are all internet giants propped up traditionally by online advertising. In particular, advertising still accounts for more than 95% of Google's total generated revenues. Much of the freemium content on the Internet (including blogs and forums such as this one) rely at least in part by ad sponsorship and advertisement generated revenues in partnership with Google AdSense. This paradigm is undergoing a fundmanetal shift to be replaced with the microtransaction business models of the future.I read an article a while back on how Google predicted the demise of the desktop as a popular platform within three years. It is obvious that the age of the desktop is over. We have moved on from laptops and notebooks to netbooks, tablets and smart phones. Eventually everything becomes a ubiquitous computational device and the only difference is form factor and presentation format. All our "stuff" will reside in the cloud, perfectly synced from device to device. Cloud based software as a service will dominant traditional client-server applications we will see the essential equivalent of dummy terminals (ie Google Chromebook, Kindle fire) become prevalent and gain mass adoption.There are only so many hours in a day. Time is one of the most precious commodities and it is truly a zero-sum game. There are opportunity costs to everything, you spend time doing one activity at the expense of something else. That is the nature of life. But the trend seems to indicate that the masses are spending more and more time on small form factor devices and less and less on traditional desktops or even laptops. If it is more convenient to check your mail on your phone, why would you bother to do so on the desktop computer? If you can do what you need to get done on the ipad, why would you need to do it on the laptop? As our lives get busier and more hectic and the world gets smaller and more interconnected, we need more casual, efficient and socially convenient ways of communication. This is the compelling reason behind the move towards mobile, smart phone, etc.So what does all of this have to do with the trend towards microtransactions? For the past decade or so, to a large extent advertising has subsidized the rise of the Internet and all the free content and open platforms and digital ecosystems that we have today. But all that is about to change. In the future, nothing will be "free", everything will be microtransactions.Google, Facebook, Twitter and other large internet and tech companies that owe its very existence to the lifeblood of online advertising surely already see the writing on the wall. You simply cannot have a generation of people switch from spending the majority of their online time on 19" inch desktop monitors to spending every waking moment on their beloved mobile 3" smartphone displays and still have any hope of generating the same scale, scope and volume of advertising revenues. True, smart phones and tablets/netbooks will never completely replace the desktop, but we as a collective society are spending less and less time on the desktop/laptop and more and more of our time and energy is being spent on much smaller form factor devices.This inevitably means the current ad sponsored paradigm of the Internet ecosystem will become extinct and die out, to be replaced by another means of existence. As smartphone become general purpose computational devices and its adoption and use becomes ubiquitous, it will replace traditional PC/desktop and become the primary platform for developers, for advertisers, and yes for the micro-transaction economy.This is why you see Google's battle with social networking site Facebook, also why Google is so invested in Android's rise, why Google is going into mobile, gaming, social, and why it ignited the browser and OS wars, first with its Chrome and then Chromium OS and Chromebook. Traditional online advertising paradigm as we knew it is dying. The future is in mobile, cloud, social... but instead of being subsidized primarily by advertising, they will instead be propped up by microtransactions.Due to the nature of the Internet and how easy it is for anyone to set up a website or a blog, we have seen an explosion of user generated content (not only blogs, forums and text but also video uploading like Youtube, Vimeo, etc) in a variety of mediums across a variety of platforms on the Internet. But there is an existential crisis in that advertisers always want to go where the numbers are. Traditionally in the past print media controlled the source. It was a strictly ONE to MANY relationship. There was ONE SOURCE, ie New York Times and a gazillion readers. Advertisers want to go where the eyeballs are and where there is heavy density in readership.With the decentralization of the Internet and the ability for anyone to start their own website and blog/forum... this quickly changed to a Many to Many relationship, diluting the monetization margin and devaluing information to the lowest common denominator. Content was not sold for what it was worth, but given away for what pitiful amount of adSense revenues that it could generate from pageviews. Simply stated: there were too much user generation content and too few eyeballs. The advertising pool was only so large and everyone was competing for the same piece of pie. This in turn has the inevitable effect of diluting profit margins of advertising models (tragedy of the commons) and as the monetization becomes too thinly spread out many of the ad sponsored business models either die out or survive by resorting to hybrid freemium models or by charging for content and utilizing microtransactions.This matter is farther made worse and compounded/confounded by the decline of desktop PC use in general and the rise of mobile devices. Suddenly the screen real-estate went from 19"inches or more to just under 4" inches. How could this advertising model of the Internet survive in the new era? It could not.In the future, content providers will generate revenue (through microtransactions) by the VALUE of the CONTENT that they provide, and not by the sheer number of impressions or clicks or pageviews and general readership and advertising popularity of their content. Conversely, we the consumer will no longer be able to "free ride" on the backs of the former advertising subsidized Internet ecosystem and will instead be compelled to PAY for what (information) we CONSUME. Nothing will be free anymore, the free lunch is over.This is also why Google is investing in Near field communication, micropayments and other similar concepts. Android was never about making advertising monies for Google, it was all about positioning Google to be the middleman's middleman... so that Google can be aligned with the new paradigm and position itself on the top of this new micro-transaction pyramid food chain. Instead of revenue sharing by taking a slice of the ads monies from adSense that ran alongside popular websites, in the future Google will take direct cuts, skimming percentages of the micro-transactions of countless sites, services, vendors, developers throughout its Android marketplace and Android based ecosystem.Basically, in a nutshell, the free ride is over. Expect to pay for everything in the form of micropayments and microtransactions. We also see this already happening with FLIGHT do we not? Just like the transition from Desktop to mobile was responsible for the demise of traditional free content on the Internet, the dumbing down of gaming in general has attributed to the 'walled garden' approach of gaming platforms, DLCs, in-game app stores, and micro-transaction models.Thus I predict there will never be a SDK for FLIGHT released by Microsoft. They obliterated that option the moment they decided to go this new business model approach of freemium/DLC. With Games for Windows Live and in-game app stores shoved down our throats and no option for a SDK, FLIGHT is as good as dead to our community. I hate to admit it, but there is a possible likelihood that it may actually be the reverse. It seems that the wall-garden has turned in on itself. FLIGHT is like "the thing" (the movie by same name) and wants to convert the simming community to arcade gaming. The simming community itself could be the victim of FLIGHT and this new age paradigm that we all find ourselves in. On the other hand, I don't think FLIGHT will succeed either. This microtransaction model will never work for FLIGHT because it can't capture and sustain the interest of the target audience long enough to sustain its own growth into perpetuity. Instead I project that FLIGHT will die by way of fading-irrelevance. MS played a big joke on all of us. We are really back to square one, when they first canned ACES in 2009. FSX was and still is the last simulator from MS. The future of flight simulation is not so bright. Ominous clouds are ahead. This is truly a sad era we have entered.

Edited January 16, 2012 by etheris

[Tierborn 188]

Micro-transactions are the present ... its already alive and well. PC games, Android, Iphones and social networking apps, .. alive and well.

Edited January 16, 2012 by Tierborn

[simmerhead 885]

As the saying goes: You pay nothing, you get nothing.

[garsands 0]

Out of the top 10 PC games of 2011 voted by players.7 have payable download content soon be 8 as one of the games only came out 2 months ago.there's nothing new about having to pay for DLC with PC games be it extra levels, maps, skins, weapons.And sims here are a fewRailworksHas DLC 91iRacingHas DLC 64Farming sim 2011Has DLC 3& for all you hardcore players out there we haveThe simsHas DLC 9And some 2010 & older games we haveCivillzation 5DLC 11BorderlandsDLC4Fallout 3DLC 6

Thus I predict there will never be a SDK for FLIGHT released by Microsoft

I thought that's what everyone has been saying for the last 2 weeks & longer on this forum including youbut then yesterday you said.

If FLIGHT flops and fails to capture the target audiences' five minute attention span and doesn't produce the DLC sales and revenue volume the VPs have projected then MS will have no choice but to give out a free SDK in hopes that the 3PD might be interested in reviving it. And we will be standing there ready to take back a cheating lover (FLIGHT 2012) for sloppy seconds.

[Attila 2]

It's funny that you should mention Civ 5. It is another game that drastically changed direction and alienated its core supporters in the process. It went the Steam and DLC route. I wish the core game would have been free, I could have saved that money too.

[simmerhead 885]

Yep. Myself a Civ'er since 1991, and now, no more...