Premium currency and cash shop

Why is premium currency important in games

Premium currency is special currency bought with real money and used in video games for purchasing various things which are impossible to get by any other way. Premium currency is used in 90% of modern games which have any kind of multiplayer today. It is also main source of income for mobile games, Facebook games, and many other. The premium currency is so important today that 90% of the hacks and cheat tools are made for adding premium currency to game accounts. If you look at some of our most popular hacking tools like Clash of Clans hack tool, Throne Rush cheats or Castle Clash, you can see that all of them are centered on adding premium currency to the game. If we look at history of premium currency, we can see that it evolved from cash shop, which is also common thing in modern games, while 10 years ago it was expected to be found only in Korean MMORPGs. How things changed in only 10 years so that premium currency evolved from cash shop and become dominant payment method in today’s games?

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Why premium currency and cash shop together

Cash shop was introduced way back, more than 10 years ago. It was first introduced in MMORPGs which were free to play, as main source of income through micro transactions. Over the years it became obvious that this payment method is much better than subscription method. In this moment, there are less than 10 video games in massive multiplayer online genre with subscription payment method, while literally thousands of other games have free to play model with premium shop (or cash shop) and micro transactions. At the beginning the model introduced in the world of video games was free to plat model, with cash shop. Although this model was a huge success, it still had a problem. Not all players could or wanted to spend money on free to plat game, but they still wanted the access to premium items from cash shop. The solution was to allow trading of cash shop items between players, so that players could buy it with in-game money. This system proved to be even better. Over the years, third feature was introduced in this system, and it was called premium currency. From the beginning, all items in cash shop could be directly purchased with cash. But in older years all of these games were played in USA only, so the only currency used was US$. When the games started to become more popular in other countries, a problem appeared with using many different currencies for paying in cash shop. As a clever answer to that premium currency was introduced. Premium currency was some kind of intermediary currency. Every item in cash shop had its price in premium currency. The player only needed to buy the premium currency with his local money. The prices for items remained the same for all players, thanks to introducing the premium currency.

Free to play games and premium currency

Free to play games and cash shop

Cash shop is relatively new feature in video games. It existed before, but was not so efficient and often used as today. Today cash shop and premium currency connected with it, are inseparable parts of many video games, especially those with multiplayer content. For example, earlier games which introduced cash shop as their feature, usually offered some permanent boosts or upgrades for game as goods in cash shop. Remember some earlier MMORPGs which offered special mounts and costumes in cash shop? Even those MMOs with subscription payment model such as World of Warcraft, had such offers. These cash shop offers functioned well, but not well enough for them to become main source of income in games. The big breakthrough was made by Korean game developers, who introduced famous Korean MMORPGs. For those who are not familiar, most of Koreans MMOs have some common traits. They lack quests in higher levels, have very steep experience curve on higher levels, but they are also first completely free to play games which appeared on net. Free to play game (or in short FTP game) means that all game content is available to all players without any payment included. Of course, even free to play games must have some source of income or otherwise they would shut down pretty fast.

Their source of income was cash shop, although this model is called micro transactions model as opposed to subscription model of payment. Cash shop in these games was supplied with special items and features which had no direct impact on the game in theory, but in reality they made incredible difference between real free to plat gamers and those who were regular buyers and users of cash shop items.

Most common items in cash shop included experience boosts for faster leveling, attribute boosters, hit points and magic points boosters, special mounts which were faster and tougher than regular. With the use of these items, player was incredibly more powerful than other players who were limited to using only the free stuff coming from the game. So the principles of the game stayed, and in theory real free to plat players could succeed in everything without use of the cash shop items, but in reality it was impossible to do without heavy cash use. One more important attribute of the most, if not all items purchased in the cash shop, was that they were all temporary. So to keep their advantage, paying players needed to buy premium items non-stop. This micro transaction method proved to be so efficient that these free to play games in fact started to make more money than other video games with monthly subscription fee. Normal video games with monthly subscription needed at least 50.000 regular subscribers or more in order to maintain server and keep themselves alive and running. Free to play games were so efficient with their cash shop economy that they could survive with a base of only 5.000 active players. At the end turned out that average player in free to play game need to spend average of 30-50$ per month in order to be competitive, while other, pay to play games, had monthly subscription of only 10 to 15$. The only problem remained those players who really didn’t want to pay for playing the game. But soon, the solution was found for this problem too. It was allowed for cash shop items to be traded between players or put into auction. After that, players could buy them with in-game currency instead of using real money.

That was the move of the real genius. Suddenly, all of the players had the possibility to access premium items from cash shop. Those who wanted to pay for them could use real money and save time, while those who didn’t want or didn’t have money to buy cash shop items, could farm the in-game currency and use it to buy premium items from aforementioned players. This system seemed to satisfy both groups of players. From this moment on, no one objected on use of cash shop and premium items in game. This system continued to be developed and from 2010, started to be implemented in most of the games for online multiplayer gaming.

Beginnings of Premium currency

If you ever played any multiplayer online game or Facebook game, or any game for mobile platforms, or in fact any of the 90% modern games, you probably know what is premium currency. Most of today’s games are using premium currency as their main source of income. Premium currency gained its popularity with the rise of internet and multiplayer games. In the era of single player games, there was no need for it. People would buy the game, play it for some time, and then leave it. Games were one-time earning opportunity. Over the years, games started to turn to multiplayer modes. For example, role playing games were one of the first to become massive multiplayer online role playing games, or MMORPGs. But even before them first person shooter games started to evolve to multiplayer editions, and totally multiplayer games, without any single player mode. Quake and Unreal tournament are nice examples. Let’s go back to MMORPGs. In the beginning, their payment model was typical subscription model, with monthly prices of 10 to 15$ in average. This was the first time that games were making profit for prolonged time, not just for the first time they were released. But very soon, in a matter of years, the market became overcrowded with MMORPGs of all types. There were classic fantasy, science fiction, even steam punk and many other themes in these games. The next big change was with the entering of so called “Korean” MMOs. Korean MMORPGs had mostly in common the fact that they were made in Korea. Of course, that wasn’t the only reason they were called like that. They were usually of lower quality than western made games. But Korean MMOs had one advantage over other games, and that was the fact they were free to play. Or so were they advertised all over the net. In reality, the revolutionary idea was that the game was really free to play as there was no paying for downloading it, and no monthly subscription. Instead, the sources of income in these days were micro transaction inside a game, for which player could pay if he wants. Micro transactions were about buying some in-game stuff, or activating some in-game features. The game was possible to play without these micro transactions and the goods obtained through them. Micro transactions were possible to access from so called “Cash shop” (most common name for this feature in all games). In theory it was possible to play all the game, and all of its content, without paying a dollar. But in the reality, micro transactions included some features and game stuff essential to easier playing, or more comfortable playing.

First promises of the game designers were in all cases that micro transactions will include only cosmetic changes in game, such as costumes for your character, or different looking mount etc. In reality, usually very soon after the start of the game, the cash shop would be filled with other, more important offers. If you read our review of the Korean MMORPGs, you should know what their trademark is (together with the OP looking costumes and awesome looking female characters). Korean MMORPGs, you know that the main way of leveling is griding experience by killing literally millions of mobs. They do not have good quest chains and the quest rewards are pretty thin on higher levels, covering roughly 10 to 20% if the experience needed for the whole level. The rest of experience is gathered through neverending grinding of mobs. If we go back to micro transactions introduced in Korean MMORPGS which are free t o play, we can already guess what the first items to be found in cash shop were. Of coruse, we are talking about experience boosters, usually in a form of one-time experience bonus or timed bonus which applied for and hour, a day, or a week. The bonus was usually anything between +50% and +100%.

How premium currency entered the game world

The other catch was that all these bonuses were temporary, they were either gone after use, or applied certain bonus which lasted for a few hours up to a week, depending on their price. So, in theory, they were not needed for the game to be played, and the game designers indeed kept their promise wheh they said that game was free to play. All the content was available for all of the players, but some of them had to work twice as hard to reach the higher levels, compared to those who used premium items, in this case, experience boosts. But that was not the only thing in the cash shop. Although the game designers were really persuasive in claims that cash shop items would not give unfair advantage to the players using them, in real life they were choke full of them. For example, most of the cash shop offers included hit point boosters (of course, temporary) or magic point boosters (again, temporary).

Another popular cash shop item was any special mount, with speed and endurance higher than normal mount found in game. Over the time, some other special items were introduced, like speciall skills for character or his mount, certain bonuses on abilities and skills. Of course, all of these items were temporary, and required continuous purchasing if you wanted to have them active all the time. This was the beginning of premium items shop, which later led to introduction of premium currency.