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I'm trying to understand how free-to-play games like Candy Crush Saga use existing knowledge of the human brain to keep people engaged and how they convince players to pay money for in-game goods. Some of their game mechanics remind me of the Skinner box. Interestingly, some sources claim that a very small percentage of players contribute 50% of their revenue. I'm assuming this is because not everyone is as susceptible to their monetization tricks. Some addicted players dump all their money into the game, which puts pressure on game developers to protect vulnerable customers from themselves.

Research on big spenders in free-to-play games seems to be scarce, but are there any parallels with existing research (e.g. on gambling) that explain why many people will never spend a dime on these games while others are struggling not to spend their life savings on it? For example, is there a significant difference in how individuals respond to conditioning?

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I think there's some interesting questions buried in the 99 cent price point used for most of the add-ons/additional moves purchases. There are a few questions on the site about those factors as well. – Chuck Sherrington May 25 '14 at 21:44

The economic concept of marginalism comes to mind. Actors will spend money to buy virtual goods if the marginal cost (price) is lower than the marginal (subjective) utility of the virtual good. If you have lots of money it's easier to spend $10 on extra lives. This explains some of it.

Most of the purchases are small, so the individual cost/utility analysis is biased, it's "just" $10. Over time it might become a problem.

It's a lot like any other kind of addiction, and I think (baseless speculation) that the "big whales" are more likely to be predisposed for addictions than the general population. The utility, positive affect generated by a feeling of progress and accomplishment, becomes harder to maintain and creates a "need" to keep playing. And when the individual transaction costs are so low it's that much harder to resist.

Edit: I've found some sources that might answer your question better.

This paper discusses how game designers might think about it. Not peer-reviewed.

From a different behavioural economics perspective.

Some other papers on the topic.

Note: Most of these discuss microtransactions and virtual goods. Candy crush is mostly lives, leading to different motivations than games like Team Fortress 2 with cosmetics like hats and skins (and keys).

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Hi @MariusEidem, thank you for your answer. It seems like good explanation to me (and I like the blog post). However, do you have any (scientific) references to back up your other statements about the cost vs utility relation? – Robin Kramer Jun 16 at 11:37
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It's a basic tenet of consumer theory, is this what you are looking for? This paper talks about consumer theory in a more critical way. I've found some sources that op might find useful. i'll update my answer with those. – Marius Eidem Jun 19 at 14:19

At least in part, the games include elements that make children more susceptible to buying in-app-purchases. Though this tactic may have been somewhat attenuated.

In some other cases, I found the following conclusion from this review paper:

Purchase behavior is explained primarily with purchase intention but also with habits. Purchase intention in turn is most strongly driven by how satisfied people are with the use of
virtual goods and whether they have a positive attitude towards using real money in virtual environments.

Moreover, people seem to purchase virtual goods in order to give a favorable image of themselves. Furthermore, interestingly the enjoyment of using the core service where the virtual goods are sold in does not predict virtual good purchases while it is thought as one of the main reasons for using the service.

These results could be in line with past literature that suggests that game operators attempt to increase demand for virtual goods by intentionally inconveniencing players by limiting some aspects of the game or making the game more burdensome to play. Therefore, enjoyment may have a double role in explaining purchases; enjoyment of the game is needed for retaining players and thus increasing the likelihood of purchases but on the other hand, negative enjoyment is needed for the player to feel the need to purchase more.

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Correct me if I'm missing something, but that still doesn't explain why some groups of players are more susceptible to the monetization tactics of freemium games than others who play it without making use of paid features. – Pieter Apr 14 at 16:06

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