Why people buy stuff — and how this works in mobile games
Understanding the purchasing motivators that drive monetization in mobile games
Back in 2012, when I was just starting my game design career, Free-to-Play games were, at least in the west, a brand new concept. Quite a lot of people were still trying to come to grips with the notion that some selling virtual items could all of a sudden be big business. The question that everyone was asking was why would anyone in their right mind spend money on virtual items. The company that I worked for at that time was good enough to pay and organize a workshop with Nickolas Lovell. I remember him pointing us to an even older (2009) Wall Street Journal article on this topic.
It is remarkable to see that things didn’t fundamentally change since then. The reason for this is that motivations driving people to spend on virtual items are deeply rooted in human psychology.
So, why then people spend on virtual items?
They spend on virtual items for exactly the same reasons they spend on physical real-world things! In this text, I’ll reiterate what these motivators are and how they are catered for in current free-to-play games.
The purchasing motivators may be varied, but they all belong to three broad categories. People buy stuff to:
- Be able to do more,
- Establish identity,
- Establish and maintain relationships
Doing more — efficiency, tools, and access
Obviously, we spend money to buy stuff that is useful. Things are useful if they allow us to do more than we could without them. Things that we buy allow us to overcome the limitations of our physical bodies or the scarcity of resources we are facing at any given moment.
If I am hungry, I am facing an acute scarcity of eatable items in my hands. To solve this, I can buy a sandwich. Therefore, by spending money we can obtain things that:
- Can immediately satisfy our physical needs: food, drinks, clothing, paying the rent, etc..,
- Help us obtain other things, i.e. tools that allow us to make things that we need or want,
- Increase our efficiency in doing tasks. — Typing on a computer is more efficient than on a typewriter, which is, in turn, more efficient than handwriting; buying tram tickets increases my efficiency traveling to work every day.
- Grant us access to other things or places — a cinema ticket!
Spending money to get the ability to achieve more is the cornerstone of monetization in free-to-play games. It was the first class of motivations that were integrated into these types of games and is consequently the most developed one.
I will mention just some of the examples.
Buying efficiency in many games takes the form of purchasing the missing resources such as coins, gems, card packs, etc. A common design trope is that two resources are needed to do an upgrade of some element in the game. For example, upgrading a Character in Clash Royale requires Gold and corresponding Character Cards. These games create an artificial scarcity of certain resources. The game’s virtual economy is tuned in such a way that one resource is overabundant, but the other one is relatively scarce. Typically, in the late game, the player will have a lot of Characters Cards that can be upgraded but would be chronically short on Gold. Making a purchase of gold coins reduces the perceived inefficiency.
Buying power-ups in casual games is another way of purchasing efficacy. Quite often a player gets stuck for a long time on a particularly hard level in Candy Crush. Buying a power-up in hope that its use could help him get out of the uncomfortable situation, is an example of this behavior.
Buying more energy in casual games with classical energy mechanics is another example of buying efficiency. The player is forced to stop the inherently pleasurable activity and wait for the energy meter to fill up. The player will part with money to skip the waiting.
Fixing time planning errors is yet another common example. This is the key to the success of many farming/crafting games, such as HeyDay or Township. Puzzle in this type of games revolves around optimization of production queues of the virtual farm or two. Get weed from the field, get apples from the orchard, produce animal feed, produce flour, give food to cows, get milk from crows, etc., etc. All these activities involve waiting. Success requires time planning. Planning errors are time-consuming to fix. The player pays to fix his own mistakes.
Buying access in games usually revolves around paying for the game itself or at least for a part of it. The classical premium model is built on this. Players need to pay a certain amount of money in order to get access to the game itself. Paywalls, where the players are expected to pay for a portion of a game, are another example. Ultimately all subscription services work in this way.
Establishing identity
People buy stuff to express identity. Establishing our own identity as distinct individuals is fundamental in our psychology. In real life, buying clothes is only somewhat related to keeping our bodies warm and protected from the elements. There is so much more about our social identity interwoven into the choices that we make when selecting clothing.
There are actually several distinct motivators at play here.
A desire to stand out is rooted deeply in the process of sexual selection. The best way to show that you are possibly a fit sexual partner is to show how much energy and resources you have at your disposal. The best way to show this is to waste them on superfluous things. This behavior is a part of the evolution of organisms on this planet. It is responsible for the evolution of things like peacock tail feathers for example. It is a very big factor in human behavior as well. We like to show off our wealth the same way the peacock likes to show off its tail.
The opposite of this is our desire to fit in. It is evolutionarily younger than peacocking but still ancient. Humans are social creatures. We are meant to work in small tribal groups. An appearance is a form of establishment of group identity. Wearing an article of clothing signals to others something about our identity. Real-life examples include buying a brand t-shirt or a football club scarf. It fulfills our desire to belong to a social group of similar and like-minded individuals.
Fitting in to stand out is a combination of the previous two notions. Group identity is further strengthened by this behavior. The cohesion of the group members is reinforced by the uniformity of appearance. Distinct group appearance helps group members to stand out from the other groups. Real-world examples include buying clothing that belongs to any of the particular subcultural groups. A Hipster is recognized in the crowd the same way a Goth was recognizable in the early 2000s or a Punk in the 1980s.
Typical examples in gaming involve so-called Vanity Items i.e., items that have aesthetic value only. See, for example, hats and pets in Among Us, costumes and skins in games such as Fortnite and Brawl Stars, etc. These elements have contextual value. Context is formed by the audience. In order for these types of items to make sense, the game needs to provide a human audience, i.e., it needs a strong social element.
Maintaining relationships
Some 75 000 years ago, a volcano went off on the island of Sumatra. The eruption was so severe that it caused a temporary climate change, which in turn created a massive dying of many sorts of animals. Humans nearly went extinct. Our population declined to less than 30 000, a population of a small town. The evidence for this is seen in our DNA. The only humans that evolved were the ones that were parts of tribal groups which learned how to collaborate with other similar groups. Contrary to the popular belief, altruism is the key to survival in harsh times, and selfishness is something that can proliferate only in times of plenty.
In order to survive, humans had to collaborate. In order to collaborate, they had to establish a certain set of rituals. Gift-giving is a cornerstone of this behavior. Giving a gift signals one’s ability to overcome selfish interests and build a relationship with the other person or a group. In an unwritten protocol that we inherited from our ancestors, the act of gift-giving demands reciprocity. It is a powerful tool that binds society together and allows the formation of new relationships.
In real life, in almost every culture in the world, people spend enormous amounts of money on gifts that they send to others. We have instituted the whole seasons that revolve around this activity. We have Christmas, and St. Valentines, and Ramadan, and the 8th of March.
The concept of gift-giving as a monetization driver is somewhat underdeveloped in video games. I am not talking about sending virtual gifts that the player can obtain by simply playing the games. These things have been present in the free-to-play world since the early days and are still present in some games. See for example sending gifts in Pokémon GO!
What I have in mind are examples where a player is invited to spend either actual real money or at least hard currency in order to be able to send a gift to another player.
Probably the best example comes from Fortnite. Here players can spend money and send Battle Pass as a gift to another player. The hope here is that the receiver of the gift would feel obliged to return the favor and would perhaps be motivated to make a similar purchase. Ideally, this would create the virality of conversion of non-paying players into payers.
I believe that this type of motivation has the biggest unexplored monetization potential. It will be interesting to see how this concept will evolve.
Links
Why Do People Buy Virtual Goods?, original Wall Street Journal article from 2009
Why do people buy virtual goods, 2009 article by Gif Constable
Why do people buy virtual goods: A meta-analysis, June 2017 paper by J. Hamari and L. Keronen
Clash Royale virtual economy deep dive
Fortnite: How to Gift A Battle Pass
Handicap principle — theory of peacocking
Toba Catastrophe Theory about the bottleneck in human genetic history
Gifts — an article on The Cambridge Encyclopedia of Anthropology
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