How the in-game economy works

How the in-game economy works

The in-game economy for most modern video games is an important factor in economic success. Already in 2020, 70% of the total market volume of the gaming industry, which amounted to $159 billion, was accounted for by in-game purchases. According to other data, the volume of global spending on in-game purchases may reach $74 billion by 2025. It is not surprising that the attention of in-game purchases is drawn not only by developers, but also by researchers, lawyers and politicians. Already today, quite a lot is known about microtransactions, as this phenomenon is called.

Types of microtransactions

A microtransaction is an in-game purchase of items, skills, or other content that is not available for free. At the same time, payment can be made both in real and in-game currency. Today, there are many options for microtransactions, which can be conventionally grouped into six groups.

  1. Purchase of in-game currency. Is the purchase of a game-specific form of payment that cannot be exchanged for real money.

  2. Chests (loot boxes). A randomly generated collection of game content such as crates, boxes, card sets, etc.

  3. Game items (in-game items). Virtual items that are purchased through the in-game store or a third-party marketplace. Used to visually customize the character or provide advantages in the game.

  4. Battle pass (battle pass). The ranking system is available for a limited time. Players earn rewards as they progress through levels or complete certain quests. It may contain pay-to-win options.

  5. Additional game content (DLC). New levels, storylines, or other content available to those who already own the game.

  6. Pay-to-win. Allows the player to continue the game in a certain situation or reach any level without meeting the initial game requirements.

But are these types of microtransactions equally interesting to developers and players? It turns out not. In the previous ten years, we have witnessed an increased interest in “cosmetic” content – purely aesthetic items that do not bring game benefits. The results of the analysis of 474 games on the Steam platform released between 2010 and 2019 showed that such microtransactions were found in 85.8% of games. Chest offers were available in 71.2% of games, compared to only 15.9% of games offering pay-to-win. At the same time, from 2012 to 2014, a rapid increase in the popularity of cosmetic content was observed – 20.38% per year. For comparison, microtransactions with elements of paid victory grew much more slowly – only 2.1% per year.

Propensities for in-game purchases

The interest of development studios in microtransactions is obviously material – the more purchases, the more successful the project. In turn, researchers look at the in-game economy through the prism of the personal characteristics and behavior of players. And here we discover very interesting patterns.

For example, we know a bit about the factors that make microtransactions more likely. Yes, the basic psychological needs of a person play a significant role. Autonomy is one of them. The higher the level of autonomy, the more a person influences his behavior, choices and decisions. And if such control in real life is not enough, then the player is more likely to buy another chest in the game. The situation is similar with competence, which is the desire to improve one’s skills. As long as the player is interested in the in-game development of the character, the probability of making purchases is high. But once the need for competence is satisfied, no new microtransactions will occur.

In addition to psychological needs, the ease of making an in-game purchase plays its role. Roughly speaking, with a card tied to the game platform, the player will spend a little more money than originally planned. It is worth noting that making in-game purchases imposes a sense of guilt on the player and prompts him to necessarily continue the game. At the same time, the satisfaction from the game process in such a situation can significantly decrease.

Scientists’ observations at some point gave politicians food for thought. It turned out that microtransactions can become a manifestation of gaming addiction. Such dependence has six key components. First, the desire to buy something in the game must be clear and take into account the player. Secondly, everything related to the purchase affects the mood. Thirdly, with each new purchase, it becomes more and more difficult to satisfy your desires. Fourth, players experience cancellation syndrome if purchases are not made within a certain time. Fifth, there is conflict related to gaming behavior and other aspects of life. Sixth, after giving up shopping, there is a relapse of behavior and another chest is bought.

Yes, those with more symptoms of gaming addiction are more likely to make in-game purchases. And vice versa. And such a relationship does not depend on the age of the player, although it applies mainly to men. There is also a physiological similarity between gambling and in-game purchases. For example, the reaction to buying a chest in FIFA and participating in a gambling game is similar to a change in the state of the electrical activity of the skin. In both cases, there is little excitement. However, when opening rarer chests, the level of excitement is higher and similar to winning a game of chance.

Industry position

Of course, we do not have a clear answer to the question of the cause-and-effect relationship between microtransactions and gambling. The fact that these two phenomena are related does not mean that making in-game purchases leads to the development of gaming addiction. At the same time, the analysis of microtransaction patents shows that companies sometimes resort to some abuses that encourage players to make more frequent in-game purchases.

For example, offers become personalized as a result of the game collecting behavioral and demographic data about you. Seems like a good thing, but you don’t know anything about it, which leads to information asymmetry. As they say, forewarned means armed, but this does not happen. In some cases, there is also an adaptation of the game’s complexity to the level of development of your character, which at certain moments increases the need for microtransactions.

The legislation does not particularly protect against rash and pathological purchases. It equates microtransactions to gambling. And this means that there should be an element of randomness when making an in-game purchase. In this case, from a legal point of view, a refund is possible. But if there is no surprise, then in Belgium, France and Denmark, the player will be able to return the funds with due effort. And, for example, in Great Britain there is no more, unless he was deliberately misled.

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