We live in a bold, new era in game monetization. A full-production desktop game that is free-to-play makes on the order of $37.5 million every year. Games companies that see less than 5% of their users ever spend a cent make almost $1 Billion a year in revenue. Entirely new ways of selling games are being devised every day. How should a game developer pick a monetization method in these crazy times? To help us understand what really drives consumers to open up their wallets for their favorite games, I suggest we look back to one of the progenitors of micro-transactions, Magic: The Gathering(MTG from here on out).At first glance, it would seem to be easy to answer the question “What is the monetization method of MTG?”  ”Simple,” you might say, “They sell packs of cards,” which is true of course, but there is a lot of nuance rolled up in those packs of cards.

Our indie team, Kindling Games, is currently developing a game for Windows Phone 7. We’re in the final throes of getting this thing out the door and the other day we had this simple, well proven idea for generating a little more revenue and adding a different dimension to our game. For a small fee, you would be able to customize your rainbow duder (we need a better name) with a few skins and also be able to customize your levels. For example, you’d pick up a Zeus skin and a tiny Zeus sits on top of your rainbow cloud and extra lighting particle effects rain down terror on the townspeople. Essentially, the purchase would include a small bit of additional functionality along with the cosmetic change. We’re well beneath the maximum package size so we thought this would be a great way to add extra content and some extra fun! After having this idea, I had a flash of sudden realization that the Windows Phone 7 does not support micro-transactions. Arrrrrggggh!!!

Facebook has released the getBalance API call as an incentive to game developers who use Facebook Credits as their exclusive premium in-game currency. The call lets developers determine the Facebook Credits balance of any of their users. This allows them to identify high rollers with a large balance of Credits and dynamically price virtual goods to increase purchase probability or profit margin, improving monetization.