Not an MMO player here. Micro-transactions exactly what they sound like? Basically buying pixels to give yourself an edge or taking a shortcut when you don't want to grind?
That is one definition of it, though not all MT models go that route.
The best MT models are those that focus on the sale of convenience items (XP boosts, additional inventory slots, additional character slots, that sort of thing), Cosmetic items (outfits that do not have stats but allow you additional customization options when the gear you wear makes you look like a clown), and content access (essentially additional chapters of gameplay content over and above what the game launched with, able to release more regularly and allows the developer to avoid expenses associated with retail releases.)
One of the biggest points of confusion with subscription-based MMOs is the idea that the subscription pays for content development. It doesn't. I would suggest actually reading the terms of service you'll be asked to agree to when the game comes out. Somewhere in there will be what I call the NONE clause. It will say something to the effect that the subscruiption fee grants you access to the service only, and that the developer is
not
obligated to deliver and you are
not
entitled to receive anythuing beyond access. So in a sense, the NONE clause grants the developer the license to sit on their butt and just rake in the revenue.
Another misconception is that the developers get the subscription revenue directly. They don't. The parent company gets it all and pays out the sallaries agreed upon through contracts with their employees in the different departments involved. Some parent companies refuse to invest in their development teams resulting in MMOs that do not grow. You can recognize these by the MMOs that have a large paying player base but the game goes months and months without additional content and the typical explanation from the devs of "We just don't have the manpower to do that right now." It's not an excuse. Odds are they are being completely honest.
If the game is microtransaction-driven, the revenue flow still goes the same way, to the parent company first. But in the case of microtransactions, money is only made on things that are actually produced and delivered. If the developer of a MT-driven game says that they won't charge for playable content, then beware of heavy sale of fluff items on the MT-store and other revenue generation ploys like lockboxes that contain a random item, one of which is highly sought after and very rare, and needs a key purchased in the MT store to open. This is not necessarily a bad mechanic, where if done rightm you find the boxes in fixed locations, and if you want to open it, you just buy the key. But some developers employ an in-your-face approach which cause the boxes to drop when you kill something, and you get deluged by them, and the drop-rate of the ultra-rare item is so low that you can buy hundreds of keys and never get it, leading to the feeling of being cheated. If the MMO in question goes this route, you can hang up seeing regular playable content releases as the MT-for-fluff model only reinforces the NONE clause.
Striking the right balance between MT-products and MT-pricing, an MMO can sustain itself and turn a heafty profit at the same time. In my opinion the right MT-products include the sale access tokens that let you in to the latest playable content, and the production of said content given a much higher priority than fluff items that would also be available. I would rather pay for more stuff to do than more stuff to wear. I would even accept such MT-products in a subscription-based game if the content packs replace retail expansions and are priced so that the content releases over a given period do not cost any more than what a retail expansion would cost at the same time interval. Like I said, subscription fees do not pay for content development.
MTs can be a blessing or a curse, depending on how they are handled.