Transcript for:
Predatory Monetization in Video Games

BWAAA How predatory, just how egregious and ridiculous are the microtransactions in this game? One slot for free and the others you have to pay for with microtransactions. It's so bizarre. Just, you know, just let me keep playing. AAAAAAAAHHHHH AAAAAAAAHHHHH WHAT THE FUCK AAAAAAAAHHHHH This is legitimately pay to win. As the gaming industry continues to grow and evolve, Game developers are finding new ways to attract players and get them to spend money on their games. With game developers moving away from a buy-to-play model and leaning towards the freemium business model, the people calling the shots are adopting new and creative ways to get players to part with their hard-earned cash. From first-time spenders to lucrative mega whales who can basically fund a game company with their microtransactions, there are a myriad of subtle psychological tricks that are employed to get players to spend cash in-game. So what are the techniques that are being used to get players to enter their credit card info and spend hundreds of dollars in-game? Today, we'll explore four methods that developers use to entice players like you into spending money. The first way that developers hook players into spending money on a new game is known in psychology as the foot-in-the-door technique. Imagine you're little Timmy, and your friend just told you about this cool new game that you need to try out. As you make your way through the tutorial and the first couple of levels, you decide, hey, this game is pretty fun. And in that moment, right when the game has you hooked, you're hit with one of the first big choices you'll need to make as a player. The game offers you a starter pack of items that'll make progressing through the game much easier and more fun. On top of the items being good for your level, they're offering them at a discounted price only for new players. The cost is just a couple of About as much as you would spend on Boba. And in return, you get some gear that would have taken days to earn, or cost a lot more money later on in the game. You think to yourself, surely it's worth it to spend a little now to get ahead later. Though you didn't realize it at the time, you'd just been hit by the foot-in-the-door technique. Transforming you from a noob trying out a free game for the first time, to a tried-and-true paying customer. Basically, now that you're bought in, you'll be more likely to spend money in the future. This kind of psychological conditioning is a key process which leads to habitual spending behavior and even gambling addiction. Sure, $50 for 45 packs in Magic the Gathering Arena sounds like a lot right now, but if the game starts you off with a nice, time-sensitive welcome bundle, which gives you 5 packs and 2500 gems for the low cost of only $5, suddenly, spending $5 doesn't sound so bad. And in a few weeks, $10 doesn't sound so bad either. After all, that's only 2 packs. Eventually, you'll be able to rationalize bigger and bigger price tags. For some, $100 for endgame gear won't sound so bad. After all, you've sunk hundreds or thousands of hours into the game, you might as well spend the money to maximize your experience. For many, starter pack deals like these have proven to be an effective way of turning new players into paying customers, and do so at a faster rate and faster price. than most other techniques. Holy shit guys, this is 800% extra value? I'd be losing money if I didn't buy this. In a piece written by Moonlit Beshamov, a member of the Google Play Business Development team, it was revealed that in the game Battle Hand, more than 50% of all new players bought the game's starter pack as their first in-game purchase. The kicker? Battle Hand's starter pack was only offered for 36 hours upon the pack being shown for the first time to the player. So even if those players were going to become paying customers eventually, the time gate forced them to spend money a lot sooner than they otherwise might have. Thus, the process of conditioning players to open their wallets wider and more frequently begins right at the start of the game. The next method players will notice is when developers disguise the true cost of in-game items by forcing you to convert real-world money into a premium currency before you're able to purchase whatever is in the store. Picture this, you're logging into your favorite game. Every day, the shop refreshes, and today you see something that you really want. It could be a new skin for your favorite character, or a sick effect for your favorite gun. Whatever it is, you feel like it's time to spend some money. but you realize that you don't quite have enough currency in your account to make the purchase. Unfortunately for you, the game's premium currency is not offered at a 1-to-1 cash exchange, but rather a set amount with a set price. So here are your options. If you buy the $10 premium currency option, you won't have quite enough to buy the gun, but the $20 option leaves you with a ton of currency left over. You could theoretically buy the $10 and $5 options, but that would involve two separate purchases. Plus, the $20 option has a better conversion rate than those two combined, so maybe you should just stick to that one. Soon, it feels like you need a PhD in economics just to figure out the most cost-effective way of buying a little corgi to dangle from your pistol. While it may feel frustrating and unfriendly to the user, this is a form of currency distancing, and it's an intentional tactic that companies use. to get you to spend more money. Although it's annoying to figure out which RP options you need to buy a skin, by having to convert to RP in the first place, the real value of the skin remains hidden as it doesn't feel like you're spending real money. And while it sounds silly, it's surprisingly effective. A more tangible example of this phenomenon is when people overspend while on vacation in a foreign country. While it's easy to manage a budget of $50 American, if you're an American, it's not so easy when that $50 is converted to 65,000 Korean won. Suddenly, it becomes a lot harder to keep track of how much you're actually spending, and within just a few days, your bank account is sending you text alerts, letting you know that you're out of cash. While this trick can be troublesome, it's also one that has an easy solution. Just do the math. Or better yet, have someone else do the math for you. For most games that employ this currency tactic, especially gacha games, the value of each price option has been put into a spreadsheet for laymen like us to easily understand. It's unfortunate that this tactic is still so prevalent, despite heavy criticism from virtually everyone, but as long as people are spending money, it's likely to stick around. Once you get past the struggles of figuring out the true cost of in-game items, you'll run into the next technique developers use to take advantage of players. Loss aversion. Imagine you're a few hours or days into a game, and it feels like you're speedrunning through the first series of levels. Thinking yourself pretty talented, you begin to notice that the game is getting progressively harder and harder, until you suddenly reach a point where you can't advance. No matter what you do, you can't seem to beat the level, and all that confidence you had just a few levels ago quickly dissipates. Seeing that you're in a vulnerable state, the game decides that you could use some help, and offers to make your life a little bit easier. Unfortunately, you're gonna have to pay for that help. But since you've been beating your head against the wall all day, you decide to just pay the fee so you can move on with the game. In the world of psychology, this is called loss aversion. Loss aversion operates on the idea that the pain of losing is twice as painful as the pleasure of winning. As a result, players are often willing to take bigger risks or spend money just to avoid the sensation of losing. In a study done by Wolfgang Steinel, a professor of psychology at Leiden University in the Netherlands, Steinel and his team found that, quote, In order to avoid suffering a loss, Liars are willing to tell major lies, while in order to achieve a gain, liars stick to more modest lies, trying to increase their chances while still keeping some uncertainty, which may mitigate their feeling of responsibility in case the benefit is obtained. Mobile games are a great example of loss aversion in full effect. Let's take a look at Candy Crush. Every time you fail a level in Candy Crush, you're given the opportunity to replay the level at the cost of one of your lives. Initially, You're given five lives, and they automatically replenish after a set timer. The issue is that if you run out of lives to continue playing the game, you have to wait for the timer to tick down and give you a life for free. For those of us who are a little bit more impatient, there's also the option to pay a few dollars to get a full set of lives. Sure, it may not sound that bad, as you do get five more tries to beat the level, but if you keep losing, one payment turns to three payments, turns to ten payments, And suddenly you've spent 20 to 30 dollars just trying to beat one Candy Crush level. Since players are often more willing to keep paying until they beat a level, rather than put their phone away and accept that they're a loser, loss aversion is surprisingly effective. And mobile games are aren't the only place where loss aversion is prevalent. The trick can be seen in multiplayer games too. Imagine you're playing Shadowverse, and you're using the starter cards provided by the game. You queue up into matchmaking, and run into a tier 1 meta deck. Obviously, you're going to get demolished. And right after your opponent finishes wiping the floor with you, you vow never to lose to a sweaty tryhard like that ever again. So, you pull out the strongest card at your disposal. One which will hopefully guarantee victory from here on out. Your credit card. Suddenly, you're spending tons of money on packs so you can beef up your deck and avoid that feeling of losing as often as possible. Whether it's Shadowverse, Clash Royale, or FIFA, this scenario probably sounds a bit too familiar for most people. And it's a somewhat unintended way that loss aversion has affected your decision to financially invest into a game. Finally, there's one last big way that players are tricked into spending money, which is not actually built into the game itself. Instead, we're talking about the social pressures from other members of the community, or even just among your circle of friends. Imagine you're watching your favorite streamer as they roll over and over again to try and get the newest character in Genshin Impact. After a couple of pulls, they get the 5 star character they were looking for, and go absolutely insane on stream. The streamer is hyped. The chat is hyped. And for some strange reason, you, sitting behind your computer screen with no tangible connection to this person or the game they're playing, are also hyped watching it all happen live. Suddenly, a thought starts to creep into your head. Man, it would feel so good if I pulled that character myself. So, you launch Genshin Impact and start spending your own money. While it may not seem like much to those watching from the outside, the social pressure to spend money on games is actually pretty significant. No one can avoid the feeling of FOMO when everybody and their mothers have the shiny new toy that you don't have yet. But that social pressure isn't exclusively felt by those watching others pull their dream character. Think back to the example of losing to a tier 1 deck in Shadowverse. It may not have seemed obvious before, but that's also applying a degree of social pressure to invest in a game for the same reasons. If your friend keeps beating you in cards, and it's not really fun for either of you, you're going to be tempted to buy some cards yourself, so that you can have a more competitive match. And while the social pressure isn't completely tied to something a game developer may have control over, those developers definitely benefit from the social pressure around gaming. For example, devs will often sponsor streamers and induce them to play their games on Twitch to give the game more exposure and draw in more players. Oftentimes, for games like Genshin Impact, they'll give them some money to spend so that they can pull over and over and over again until they get the character they want. Inducing other players to do the same. This will sound very familiar to those who are around in the days of CSGO skin betting Essentially streamers would be invited to gamble on skin betting websites and to spice up the content They'd be given skewed odds which would give them a way higher chance of pulling good skins Better outcomes means better content and seeing them win all the time would make viewers think that they could win big too While game developers aren't going as far as skewing the odds artificially providing the currency needed to make pulls in gacha games has pretty much the same result. Because eventually, you're gonna get a 5-star. Ultimately, the gaming community itself is one of the most cost-effective tools a developer has at their disposal. And weaponizing peer pressure is generating a lot of income. Hopefully, by now it's clear that no matter what kind of a player you are, or how long you've been playing games for, devs will find a way to make you part with your money. Watch me win right now. Boom! It's important to watch out for these tricks, as it's pretty easy to find yourself spending way more money than you initially intended. As more games are designed around the freemium model, these tricks and psychologist-backed techniques will continue to stick around. While the ethics of ensnaring gamers to spend money can be debated at length, what we do know without a shadow of a doubt is that monetization techniques that prey on your psyche do in fact work. Prives are under constant pressure from managers and investors to generate more profits for them. So it's hard to blame the devs for putting this stuff in their games. Considering that Sony made 2.1 billion dollars during the 2021 holiday season from microtransactions alone, more than they made on physical and digital game sales combined, it's clear that microtransactions are the way of the future. So it's important for players to protect themselves financially and avoid spending beyond their means. While it's fine to spend some money here and there, especially on games you actually enjoy, the most important thing is to do so in moderation. So, the next time you're punching in that credit card number, take some time to reflect on why you're doing it and whether it's actually worth it. Because the only thing companies want is you to spend money, so if you do, make sure you actually feel good about it. What are your thoughts on predatory monetization in video games? Do you think it's fine to put gambling techniques in children's games? Or should there be stricter laws around what can be implemented and what constitutes gambling? Let us know your thoughts in the comments below. If you want to help us out in a different way, leaving a like, subscribing, and hitting the bell to stay up to date is also appreciated. My name is Jonah. Thanks for watching.