Tying, Bundling, and Microtransactions: An Analysis of the Video Game Industry

This research paper focusses on how the video game industry maximizes their profit, keeps the market at a steady Oligopoly, and traps consumers using various methods. Console manufacturers use tying and bundling are the main forms of price discrimination that are used to achieve these goals. Microtransactions are used by game developers in order to maximize their profit. This paper will also explore why players purchase microtransactions but are openly against the business model. By understanding how these methods are used to trap consumers, we can further understand consumer behavior and the behavior of oligopolies.