You may or may not know the name “Nexon”, but you’ve most likely heard of their games. The Korean company has produced the industry-leading titles Maple Story and Kart Rider, to name but two. And although they may not have invented virtual item sales through microtransaction as they sometimes claim, my hat’s off to them for showing the world that you can make a tidy sum from them.

Nexon’s Min Kim was recently interviewed by Gamasutra about the company’s upcoming virtual world Block Party. During the interview, Kim rattled off a list of the eight types of items you can sell in an online game.

When it comes to items, they can serve eight purposes, says Kim: function, envy/prestige, recognition, collecting, rarity/scarcity, competition, friendship, peer pressure. These are the keywords, he said several times, that you should be thinking about when designing your items to sell.

With the likes of MochiMedia, GamerSafe and HeyZap offering Flash microtransactions, i thought it would be worthwhile to explore Kim’s list, and to provide examples to flesh out his examples. Some of these item classifications bleed into others. Most of them need to hook into some sort of multiplayer game, because they’re driven by social interactions. But there are ways to structure your game to leverage feelings of envy and aspiration that don’t require a live multiplayer server, which i’ll explain in this article.

1. Function

The first item type is one that affects gameplay, like the downloadable tracks in Rock Band 2. Other, more generic examples are things like guns that provide extra firepower, and winged mounts that let you fly clear across a virtual world. Often, these items have the most perceived value to a player because they actually do something. Occasionally, they’ll even give a player an advantage over other players during gameplay.

The danger is that by selling functional items, you risk alienating your player base, creating a class system of haves and have-nots. When poorly designed, functional items can actually exclude players from playing together; in the case of Rock Band, all four band members have own a downloadable track in order to play through that song together. It’s not long before a group of online strangers have to default to the songs that shipped with the disc, because none of them own identical set lists. Electronic Arts faced a lot of flack when players learned they would be charging extra money for in-game weapons in Battlefield: Bad Company that many people thought should have been included with the experience.

2. Envy/Prestige

Virtual clothing fits nicely into this category. In a multiplayer game, everyone wants to stand out. We can all recall the pain of spending half an hour tooling up a character for a virtual world, only to jump into that world to find that half the game’s population chose the same hat, boots and skin tone. Finding your twin online isn’t quite as annoying as wearing the same dress as another girl to prom, but it’s up there.

Some games are even designed so that all of the free players (or “hobos”, as i like to call them) look just similar enough as to annoy the player. A quick hit with the credit card is enough to straighten that out – one dollar buys you a new wardrobe item that no one else has. That is, until everyone else spends a dollar to have it, in which case you need to keep ponying up the real-world cash to stay ahead of the fashion curve.

The Xbox Live service recently added an Avatar Marketplace that consists solely of Envy/Prestige items.

3. Recognition

Recognition items that are based on player achievement, like trophies, banners and crests, are difficult to sell. These are most often freebies that a player unlocks by accomplishing something in the game. One way that i suppose you could monetize this type of item is to enable the player to pay to turn a free achievement into a concrete item.

Let’s say, for example, that they player can buy a statue of himself to put in the town square, but ONLY if he kisses seventeen muskrats. The player goes out and accomplishes this amazing feat, but has no real way to show it off – no one is going to go digging through the player’s mission log to uncover that particular accomplishment. So the player pays $23.95 real-world dollars to convert his achievement into the statue to brag about his prowess with muskrats.

Another option is to charge players to unlock badges, trophies and achievements that other players come by honestly. This kind of thing can go on in an after-market area – for example, while researching this article, i found a site that purports to sell you Pogo Club badges for $5 apiece.

Of course, players who spend a million hours mastering a game to unlock the Magic Whizzwang cry foul if you start selling Magic Whizzwangs to players with more dollars than time. There are a few strategies you can adopt here:

1. Do it anyway, and cry yourself to sleep on a bed of money.
2. Run the after-market site yourself, but don’t put any corporate branding on it, so that it looks like some shady fly-by-night site is selling badges, but you get all the profit
3. Don’t do it, and risk losing out on a potentially major source of revenue.

There’s not a lot of difference between selling achievements and selling powerful in-game weapons. In both cases, you’re monetizing “time-poor, money-rich” players over “time-rich, money-poor” (AKA hobo) players. The difference is purely psychological: we think of awards as something to be earned, not bought. Of course, graduate to the Real World and you’ll find that most things in this life are earned with money, awards included.

4. Collecting

This is one of my absolute favourite item types to design. When i was working on The Sitekick Proejct for Corus Entertainment, i designed a number of often complex item collections, where certain items had to be combined like Voltron to unlock other items. i didn’t quite reach that Mecca where i had kids combining their Voltron uber-items to unlock Super Mega Ultra items, but i can see that’s where my career would have gone if i had stayed. :)

Of course, the natural progression for The Sitekick Project or any game like it, with its big empty Pokemon-inspired list and it’s 1000 some-odd items is to charge players for items so that they can fill in gaps in their collections. While it’s a reasonably compelling prospect for an adult, you have to understand that maintaining complex collections is a psychological attribute of your people, and completing that sticker album or plastic pony set becomes absolutely crucial. It might be worth a few bucks to mom and dad to stop junior from having the DTs and just buy one or two missing items.

5. Rarity/Scarcity

The Sitekick Project also had its share of rare items, but of course it picked up its cues from other games – most notably CCGs, or Collectible Card Games. And CCGs owe it all to baseball cards.

The very best way to monetize rare items, incidentally, is to follow the baseball card model: items are sold in packs. Some items are rare. The player must continue to purchase packs filled with mostly mundane items and “doubles” in the hopes of stumbling upon a rare item. You can even produce rareities in tiers: you can go from “rare” at .01% probability to “legendary” at 0.001% probability. Rare items are usually shiny.

Depending on your scruples as a designer, you can also charge your players a large fee to flat-out buy a rare item. Just make sure the price is high enough to deter most players, who will likely end up spending more than the cost of the buy-out price fishing for rare items. This is the crane game principle that leads you to spend $35 trying to snag a $2 stuffed animal out of the machine, when the same amount of money could have gone towards a perfectly nice Gund bear at the Hallmark store down the street.

Another way to sell scarcity is to release a series of items and to arbitrarily limit their quantities. Of course, since the items are digital, scarcity is entirely artificial. Imposing an item quantity on them or selling an item for a limited time only is a great way to see completist players snapping stuff up like it’s an End of the World Sale. And once a player buys a limited item and the sale expires, it becomes both a Rare and Prestige/Envy item in one fell swoop.

6. Competition

i had trouble interpreting this one, and discerning it from Prestige/Envy items. There are a few ways i can think of to charge for competition:

1. Sell tickets or entry fees to competetive events
2. Build in a competetive aspect and charge players for the item with which they compete (a friend of mine bought a lot of Xbox games so that he could get a higher GamerScore than me. The Achievements are free [with purchase of game]. The purchase of game isn’t.)
3. Sell the game itself and let players be competetive on their own. For example, you can see an air hockey table as a furniture item for a player to store in his room. The player can challenge friends to come to his house and beat him at air hockey. You can even build in a “home advantage” to an air hockey board that a player owns – perhaps the owner of the table always gets to go first?

7. Friendship

Korean game Cyworld popularized virtual gift-giving, and went so far as to make those virtual gifts expire, which blew my mind. This was years before North American designers were even thinking about virtual item sales, and the Koreans were already pioneering a virtual sofa that you could buy with real money and give to a friend that would vanish in a puff of smoke after two weeks. It boggles my mind.

8. Peer Pressure

Again, this is a subtle thing to distinguish from a Prestige/Envy item. i think the difference is that a Prestige/Envy item is something that one person has that you want. A Peer Pressure item is something that EVERYBODY has. You want it not because it’s a particularly attractive item, but because you don’t want to feel left out.

Here’s how i see this working: throw a toga party in your virtual world. Hype it HUGE. Have everyone mail away (in-game) for a toga, and cut off mail-in toga orders at a certain point. Then just grind away on the hype machine for a week, while the players can’t order a toga. On the day of the party, everyone who sent away for one receives a free toga via in-game mail. You can also find other ways to give away togas for free on the day. Make sure it’s well known that EVERYBODY must have a toga to properly party.

When over half of your players have a toga, and the other half do not, make togas available as an impulse item for x real-world dollars (or cents). Then, sit back and watch people snap up those togas.

This is a good way to avoid pissing off your players: you gave them every opportunity to get a toga for free. The players who have to buy togas have only themselves to blame.

Here are a few additional categories of virtual item types that i’d like to add to Min Kim’s list:

Sustainability Items

These are items or services that constantly suck players’ resources to keep them playing. Picture a car combat game where you have to keep buying gas. Tamagotchis were essentially giant drains – you had to keep feeding and playing with your virtual pet, or else it would die and you’d brick your device.

The Sims characters are on constant drains – their hunger, happiness, fun and social lives are constantly sapped as you play.

If you build out a lot of gameplay beyond keeping your virtual parasite happy and emotionally well-adjusted, completing mundane tasks like feeding and watering your online identity becomes a bore. So you can sell players items like auto-plant feeders, dog-walking services and extra gas tanks, instead of making players drill for their own crude.

Charity Items

i very much like the idea of virtual items that are tied to some sort of charitable cause. The red movement pulled this off with their Facebook gifts, and i can see it working elsewhere as well.

Insurance

You haven’t yet seen a virtual world where a tsunami hits your virtual house while you’re away and wipes out all your tchotchkes. That’s because i haven’t designed my own virtual world yet. But in my dystopian vision, you can buy fire, theft, flood and gigantic lizard insurance to protect your goodies from various Acts of Ryan.

Feature Locks

At the beginning of most virtual worlds, you design your avatar and choose a house. The designer can then lock these two features, and others like it, forevermore. Once you choose your look, that’s it. It’s done. Once you choose a neighbourhood to live in, you have to abide by that choice. Once you choose your character’s name, it’s locked in for all time.

This enables you to charge a lofty real-world price for a key game feature that you’ve already built. Charge the player a “plastic surgery” fee to go back into the character creator tool. Good fun.

Step Right Up

As you can see, you need to be a bit of a PT Barnum type in order sell virtual items online. We’re talking about selling something that has no inherent value, that costs you zero dollars to reproduce, and that lives or dies on the human psychological foibles you’re able to tap into. The morality of all this may be questionable, and i’ve heard some folks call virtual item sales downright evil, especially when it comes to selling virtual items to children. But i have another perspective:

1. Having been a child myself (and, in fact, remaining so to a large extent), i know first-hand the real joy that a virtual thing can bring. Some of the most amazing places i’ve been, some of the most interesting people i’ve met, and some of the funniest things i remember have all been from video games, while many of my real-life experiences have fallen far short of my virtual experiences.

   And when i laid that last sticker down in my Panini He-Man and the Masters of the Universe sticker album, i knew that the scads of allowance money i’d burned collecting those stickers had been worth it. In my own small child universe, i had accomplished something. i had followed through, and i had achieved.

   And today, employing much of the same determination, focus, and vision, i continue to achieve.

   

   Thanks to He-Man, i am also aggressively homosexual.

2. If rich people are so well-off that they have nothing better to do than to spend their money on non-existent items, more power to them. i willl gladly take their money and build out the charitable arm of my company, so that real people with real needs can eat real food.

This way to the great egress!

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