This is a question that has been debated an awful lot and im sure it will continue to have its supports from each side, but personally I believe the whole micro transaction business model is a bit of a joke, you would be hard pushed to find an app on the apple market place that doesn't have some form of micro transaction.
In principle the whole idea seems like a nice bridge between full retail price business model and the free app experience everyone has come to expect in recent years, but unfortunately corporate greed will always take it too far and drain the business model dry until nobody at all trust or buys into the micro transaction scheme.
Personally I think the name is getting twisted to mean pay to play by many companies, its no longer a way to get optional extras or non essential feature in a game, more and more they are using micro transactions as a way to blackmail players into paying if they want to complete a level...... its not just pay and you get extra feature, now its getting much more sinister, one of the most guilty of this is a certain company who just makes various rip off's of old popular games.(i would say the name but i would probably get sued.....seriously they will sue anything or anyone)
The business model is simple, make a clone of and old popular game, make it nice and simple and easy for the first 10 levels or so, gradually getting harder which seems like a normal game business model, except that the sole reason behind this is to get people hooked before they break out the pretty much impossible levels unless you buy extra "power ups", now I'm sure some people will say "oh but i got up to level 500 without ever buying anything, but i wonder if they can honestly say they did it without spamming their friends for lives and boost items etc.... the whole thing is very much a pyramid scheme made into game for, except that peoples competitiveness is working against them where they consider paying to catch up to their friends, before they even realize, every few levels you are confronted with the "impossible level" the fact its not EVERY level lulls you into believing the problem is on your end and that the game is fair but you are just being unlucky on this particular level.
This is where the "micro transaction" scheme is being manipulated by combining it with social networking they game drives itself forward, that combined with the "unlimited levels" nature of these games, its pretty much a perpetual money making machine.....except now even the casual games are catching wind of whats happening, my mum has made a few of these in app purchases in the past but has recently stopped playing the games and has switch to playing free flash game alternatives the actual games have pretty much nothing going for them as they are nothing more that clones of games that already have hundreds of clones already.
Until consumers get to the point where they realize they are being milked for every penny they have, this kind of business model will become more and more common, its a sad time in the gaming industry as now even full priced retail games are starting to try adding these kind of tactics in the form of stripped down games which want you to pay AGAIN for content that was obviously meant to be included if the company hadn't gone on a ....hmmmmm lets see how much we can strip out of the game to sell to people who thought they where getting a complete game.
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