It isn’t just In-APP

Microtransactions are commonly mentioned in or referenced in mobile computing.  For this blog I am saying that this is the transaction model for more than just mobile devices; this is now our way of life.   We need to collectively stop this from being the business model of our future.

Definition:

A “Microtransaction” is

Microtransaction (also referred to as in-app billing or in-app purchasing) is a business model where users can purchase virtual goods via micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers, although they can also occur in non-game software. While microtransactions are a staple of the mobile app market, they are also available on traditional computer platforms such as Valve Corporation‘s Steam platform.

Free-to-play games that include a microtransaction model are sometimes referred to as “freemium“,^[1] although applications offering microtransactions should not be confused with free applications that offer additional features via subscription services. “Pay-to-win” is sometimes used as a derogatory term to refer to games where paying for in-game items can give the player an advantage over other players, particularly if the items cannot be obtained by free means. The objective with a free-to-play microtransaction model is to get more players into the game and provide desirable items or features that players can purchase if they are interested in them – it is hoped that in the long-term the profits from a microtransaction system will outweigh the profits from a one-time-purchase game. –Source Wikipedia

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Microtransactions — In-Everything

• Our payroll taxes went up 2%-That isn’t bad, right?
• Cable goes up by 6% http://www.omaha.com/article/20120414/MONEY/705139987
• Power company (here in Virginia) “the typical residential customer’s bill will increase by $1.85 per month”–Power Company.  Some articles show increases of 18 spread over the course of a few years.
• Water
• Sewage
• Food
• Bank fees
• Phone fees.. phone taxes

The cost of everything is going up just a little.   Our taxes are going up and our salaries are staying the same or actually going down because of health care going up and other factors.

We all know about http://en.wikipedia.org/wiki/Middle-class_squeeze but this is beyond that.  This is about everyone.

You start adding up all of the services that you have that only cost $7.00 here or $5.00 there.

We are getting taken to the cleaners.

Cloud Computing  

From a business perspective, we are facing the same issues but the business media would have you believe that cloud computing, web services and other fee based services will save your organization money.

I say.. do the math.. we are getting lifted.   If you take the time to perform total cost of ownership and return on investment analysis that accounts for microtransactions, you may find that doing in the business in the cloud can cost you more.  This is especially true if you factor in a risk assessment.

Sure AM pointing out the obvious

At home, my wife and I look at all of our expenses on a regular basis.  It is almost a full-time job to account for all of the microtransactions.   If you don’t do it, you will simply wonder where all your money is going.

“How could we have spent so much money this month, we didn’t do anything different?”

This is different from budgeting for your monthly expenses because you now have to account for your son or daughter buying $1.99 worth of coins on Temple run.  The amount of money that is outgoing from small almost unnoticed transactions is insane.

Summary of considerations

• Check your bills every month.
• Look at the history of what you spent every month.
• Call your service companies every few months and ask them about decreasing the service fees or current specials.
• Set a budget for your normal expenses and put that money in a separate account . Note- You will learn quickly when you are spending too much or things went up because you will be out of money in that account. 
• Learn to coupon.
• Think about the small things. (Don’t look at $1.00 as “only a buck” , look at it as a part of your whole budget.
• If you are in a relationship where you are working together on your income, talk to your partner about money.

I hope this helps.. people ask my wife all the time how she manages to save us so much.  I jokingly call her the “Executive Money Spender” but the fact is she is “The Executive Family Saver” and because she is diligent and persistent in watching our in and outbound flow of money, we can do the things we love to do as a family and have some left over for savings.