It might be a while before anyone can put together a story about what sunk Flagship Studios. Too bad that piracy didn't sink them, otherwise the metaphor would be complete. Probably safe to say that Hellgate: London's pricing system engendered some hostility in potential players and contributed to the game's downfall. Hellgate took the microtransaction to nightmarish extremes: the establishment of a full-on caste system, allocating some significant perks to the upper class.
Western developers have a hard time presenting microtransactions as a thrilling addition to a stand-alone game. Microtransactions have the stigma of in-game advertising and the fiction-breaking dissonance of achievements, but none of the acceptance or ubiquity of the latter. I don't know how successful microtransactions need to be for developers to turn a profit, but the perception of the hardcore gamer is still against it. Microtransactions are usually introduced not with a flourish but a small whisper about how this gives the player "more options."
Why has this been so hard? Gamers get suspicious when extra fees are required of them, and more so when they see that the natural lifespan of the game in question is being artificially prolonged to sell some trivial cosmetic adjustments. There's also the fear, however, that developers will privatize features that we would consider either necessary to the experience or just good game design.
The only alternative is that the microtransaction means nothing. When we evaluate Hellgate or Battlefield Heroes, we see a good microtransaction model in that type of game as that of a store which sells things we could never want or never need. That gets the seal of approval.
We can react pretty strongly to the whole concept. There's a lot of talk about how developers can institute tough moral choices in games, but nothing stings as much as paying two dollars of actual money to stare at a gold-plated flak jacket and soak in the knowledge that you are never ever getting that money back. This is an irreversible action in a medium of virtual consequences. In buying a video game, we are paying for an experience, and each microtransaction is not an experience but an augmentation, one of dubious worth, and each augmentation is one more costly nick, one more superfluous tuck, and altogether are one thousand little cuts that bleed away the player's appetite for ephemeral luxuries.
Developers and publishers are betting that gamers will still want access to microtransactions even if they have no intention of buying them. The mere existence of microtransactions should work as an incentive to players. If they could only choose one version of the game, why wouldn't they choose the one that had the option? Even if they thought they were never going to use it?
These companies want to get the microtransaction to where DLC is today; where that dichotomy of choice is actually happening. DLC also acts as an alluring bonus feature even if the content in question is lame. That's Microsoft's approach with Grand Theft Auto IV's mythical downloadable episodes, and the recent announcement that Fallout 3's DLC would be exclusive to the Xbox 360 and PC. Microsoft hopes that the simple idea of expanded content is enough to entice multi-platform gamers away from the PS3. Gamers recognised this and freaked out at the news, not that it takes much to enrage Fallout fans (or Sony fans [or video game fans]).
Gamers might make that platform jump even though such additional content has historically been questionable. Once Bethesda got past horse armour in Oblivion, admittedly, the content-to-price ratio radically improved, but it was still all about getting a shiny new equipment. The experience never compared to the game proper because it was a microtransaction dressed up as a perfunctory quest. It's either that or an unnecessary addendum like Mass Effect's slight Bring Down the Sky, which let fans of that game desperately continue their experience, however diminished, by hitting the snooze button.
Are game revenues in such bad shape that these measures are necessary? Any gamer familiar with DLC or microtransactions knows enough not to care about them. The experience they offer is small or absent. What about the subject, then, so excites gamers? What keeps it in the public consciousness? It's just business. But for some reason, we care about that.