We live in a society.
“Why would you say something so controversial yet so brave?” You ask me.
The answer is simple: memes.
On a more serious note, let’s talk about the money-hungry video game industry.
Now that we’re entering the rawring XD 20’s, we can look back at the past decade in gaming and marvel at how we’ve gotten from Red Dead Redemption to Red Dead Redemption II. We’ve seen massive improvements leading some people to say we’re living in the Second Golden Age of Video Games.
But guess what? We’re also living in a capitalist hellscape.
The advent of microtransactions has made studios filthy rich. In 2018 EA earned 2.2billion in microtransactions alone. The one and only Jim Sterling made the YouTube video The Addictive Cost Of Predatory Videogame Monetization about the psychological aspects of loot boxes, gambling, and their consequences.
While the Jimquisition did a great job exposing the ways gaming companies get you to spend money, let’s take a closer look at these practices and how to recognize them.
So, without further ado, here are the 5 most common ways the games you’re playing are tricking you into giving them your money.
1. “Let’s Go Whaling”
In his video, Jim references Tribeflame CEO Torulf Jernström’s presentation at the Pocket Gamer Presents conference in 2016. The name of this talk was “Let’s Go Whaling: Tricks for Monetising Mobile Game Players With Free-to-Play” and in the talk Jernström outlines a few different strategies for getting players to spend money on their games.
Jernström calls the practice “Whaling” which refers to the practice of finding big spenders, or “whales”, and making sure they buy what your company is selling. During the talk, he explains that the best way to make this happen is through a process called Hook, Habit, Hobby.
He starts his talk by saying, “The very best to get these guys to spend is to get two rich, competitive guys to fight each other and tell them ‘I’ll give you a slight upside if you pay.'”
2. Hook, Habit, Hobby
Jernström describes it like this: “It’s a model for how people progress in a game. The hook is what gets you into the game to try out free-to-play game, then you build it into a habit that you play multiple sessions every day, and then at the end, it’s the hobby phase where people see it as one of their main hobbies and they put lots of time and resources into it.”
He also makes the point that once you’ve successfully onboarded a player into the hobby phase, there is no upper spend limit, meaning that a gaming company can continuously make more money off of you.
The video games that use the hook, habit, hobby strategy aren’t explicitly advertising products to their users, they’re using behavioral psychology to convince players to create a sense of identity that depends on their access to the gameplay, which depends on them spending money.
3. The Ikea Effect
In his talk, Jernström also refers to a well known psychological effect known as The Ikea Effect. The Ikea Effect posits that people will get more excited and/or value things more if they’ve played a part in its production.
The reason it’s called the Ikea Effect is pretty obvious, I mean who hasn’t been filled with pride after assembling a Billy Bookcase with a trusty allen-key!
So, what does this have to do with video game microtransactions? A lot.
When you’ve invested hours, maybe even days, of your life into a game you’re way more likely to invest your money in it too. One of the earliest and most influential examples of microtransactions was in 2006 when ‘The Elder Scrolls: IV’ Oblivion introduced the Horse Armor Pack, which cost between $2.50 to $1.99. This feature allowed players to customize small details of their gameplay, a model that is still prevalent to this day.
This is where the Ikea Effect comes into play (literally), the more customizable options a game offers you as a player, the more you feel like you’ve crafted something truly unique, and the more likely you are to invest your time and money into the game.
4. The Insidious Nature of Microtransactions
Another way that video games can trick you into spending money is by creating a robust and complex economy based on in-game currency. Once a discrete currency has been integrated into the world of a video game it’s going to be an inescapable aspect of gameplay.
Almost all video games involve some kind of in-game currency, and back in the day you’d get your V-bucks coins by finishing a quest, or being ultra agile with Donkey Kong on the mean streets of MarioKart. As companies start introducing the ability to convert real-world currency into virtual currency, you’re already a player in the economy, which makes it way easier to convince you to buy-in, so to speak.
5. The Dark World of Loot Boxes
Last September the Guardian published an article titled, “Video Game Loot Boxes Should be Classed as Gambling, says Commons”. In the article, they go over how the practice of loot-boxing is ostensibly the same thing as gambling, which we all know is true. The article then goes on to cover why loot-boxes can’t be legally classified as gambling, explaining that “the items won are not considered to have monetary value.”
When you purchase a loot-box you’re winning specifically in-game prizes, and you can’t cash out the way you would be able to if you were actually gambling. This loophole means that video game studios can profit off of the human propensity for gambling without any accountability for leading people down a dangerous path that can, and often does, end in addiction.
Rage Against the Microtransactions
Or don’t. In the end, it’s completely up to you how you engage with microtransactions and video game currency. Some people love the convenience and customization made available through spending a couple of bucks here and there.
That being said, there are ways you can manage your spending habits while gaming. For instance, we’ve invented a super cool tool that automatically saves you money while you play. Most importantly, knowledge is power. Staying on top of how the gaming industry turns a profit keeps you in a position where you’re making decisions with open eyes.
Check out our blog for more dank takes on the world of gaming and personal finance.
