A friend of mine spent over 800 dollars on a mobile app called Game of War - Fire Age. We've probably all heard of this game before, whether we remember or not. It was a heavily marketed product and one of the top grossing apps of 2014/15.

$800 might seem like a lot to spend, but according to him, this was nothing compared to what other people have spent (which was in the tens of thousands). It greatly surprised me to hear him tell me this story, since he wasn't very rich, but was still willing to spend that much on an app. It got me thinking: why do people spend so much money on these 'freemium' titles: games like Clash of Clans and the Final Fantasy XV App.

Seeing as how micro-transactions are such a popular payment model today, I dug around for more info and here's what I came up with:

Being A Part of A Great Community

According to my friend, having a great online circle was the biggest reason why he and so many others spend money on these types of games. A great community of friends keeps you coming back to the game for hours each day.

It makes sense that these types of games have a large social component that facilitate these kinds of friendships through joining 'guilds.'

Being in a guild also gives players a sense of responsibility to contribute to the team's success. If other players in the guild spend hundreds of dollars, it puts pressure on you to put in the same amount or more. It also may feel very satisfying to be the one responsible for your team's success.

A player's perception of the game is also largely influenced by who they play with. Many players immediately quit games like LoL or Dota 2 due to the toxicity of players. The same thing can be applied backwards - if the community is kind and caring, it can hook the player into the game further.

"Other Forms of Entertainment Are Just as Expensive" Mindset

Compared to other forms of entertainment, spending a few grand on a game isn't that much, considering that the game offers hundreds of hours of replayability. Consider the following:

  • A day at the concert costs $100+
  • A night out is at least $50
  • Visiting the zoo costs $50 (just for the entry fee)
  • 200 hours of community sports costs  ~$2,000

When compared to these things, spending a few hundred dollars into a mobile game isn't all that bad. That's the mindset that makes it easy for these big spenders. If they weren't going to spend it on the game, they would just spend it on these other things instead. 

Competition

Sometimes, players who spend money on these games are just competing with their friends. If one person buys something for an advantage, it can easily persuade the others to buy it as well... and the process keeps continuing until hundreds, or even thousands have been spent.

Valuing Time Over Money

Some people simply value their time over money and rather than having to wait a few hours for something to build, they can just pay money to get it done instantly. To these kinds of people, spending a few thousand dollars a year is negligible income as opposed to the majority of us which seems like a lot. Furthermore, by spending this kind of money, they get to show their high social status.

 

Overall, in-game micro-transactions will continue to be a profitable business, even if the majority of us despise it. By targeting the minority 'whale' spenders, developers can continue to cash profits from these games.