To what extent are gamers addicted to playing hypercasual mobile games as a result of IAPS
Key Words
Lit Review (?)
James Sauer --> Loot Boxes
Bernadeta Lelonek-Kuleta --> Pay to win
Yifan Jiao
policy recommendations to AUS (200w)
References
Lelonek-Kuleta, B., Bartczuk, R. P., & Wiechetek, M. (2021). Pay for play – Behavioural patterns of pay-to-win gaming. Computers in Human Behavior, 115, Article 106592. https://doi.org/10.1016/j.chb.2020.106592
"Pay for Play..."
Focused on Pay to Win(P2W) game(r)s because of their payment element
Their definition of P2W: "P2W games were defined as free video games via a site or an application,..., in which it is possible to pay to advance in the game."
Their research was to find out (estimate) the usage of P2W games in Poland and investigate the gamers' characteristics
looks at personal traits and connection to game play and payments
Issue around playing P2W games: frequency of micro-transactions made to win <-- behavioural pattern
results found
"frequency of payments in games is accompanied by an increase in other gaming characteristics (i.e. amounts paid and duration of a single session"
Very focused on personal characteristic rather than addiction behaviour, but provides insight on age and gender behaviour
Women were more often making payments
" payments in games are often made by gamers who do no have time to play, but who want to speed up the game"
they came up with this from this reference: Falcão, T.; Marques, D. Paying To Win: Culture, Agency and Virtual Goods in Video Games Contracampo – Brazilian Journal of Communication, 36 (2),
Demand
Underlying economic issue (500words)
Negative Externality (250w)
evaluation of market regulation overseas (200w)
Demand (100w)
Supply(100w)
Daniel King
King, D. L., & Delfabbro, P. H. (2019). Video Game Monetization (e.g., ‘Loot Boxes’): a Blueprint for Practical Social Responsibility Measures. International Journal of Mental Health and Addiction, 17, 166–179. https://doi.org/10.1007/s11469-018-0009-3
Two-Step Purchasing Process
Half of the Global games market is accounted for Mobile Games (USD$92.2Bn)
Daniel King --> Game Monetization
Hypercasual
IAP
Mobile games
Links
Over consumption
Addiction
Asymmetric Info(250w)
mircotransactions
Freemium
free to downloadand play and earn revenue through advertising orselling game enhancements to dedicated players
Sheng, L., Ryan, C. T., Nagarajan, M., Cheng, Y., & Tong, C. (2022). Incen- tivized actions in freemium games. Manufacturing & Service Operations Management, 24(1), 275–284.
Main Publishers: SuperSonic, Zynga, Azur Games, Crazy Labs, Say Games
What is their main source of income?
Selling games for a price, season passes, freemium, iaps, advertising, merch
Live Ops
2.66 bn gamer users world wide
China
Definition (textbook; pg645): situation in which a buyer and a seller possess difference information about a transaction
Definition (textbook pg676): Action by either a producer or a consumer which negatively affects other producers or consumers but is not accounted for in the market price
AUS Gov
the game system knows more about the player than the player can know about the game) to adjust the prices of virtual items for players depending on their playing and spending habits in the game --> Daniel King
players may not be aware or informed of the odds of receiving desired items from microtransactions, and the game may use pressuring tactics to incentivize purchases (e.g. so-called ‘limited time’ offers)--> D. King
King, D. L., & Delfabbro, P. H. (2018). Predatory monetization schemes in video games (e.g. ‘loot boxes’) and internet gaming disorder. Addiction, 113(11), 1967–1969. https://doi.org/10.1111/add.14286
Attention Economics
people’s attention is generally considered a scarce and valuable resource (i.e., the “attention economy”; Davenport & Beck, Citation2001)
push notifications
Decoy sales option, which can influence player to buy a more expensive package than they would have without the decoy --> buying in-game currency
daily calendar gifts / rewarding loyalty
monetization
Attention Economics is the negative externality that causes overconsumption and addiction
progress gifts
small gifts and to achieve the higher value gifts it is alot harder as you need to progress through a challenge which is designed to make a player spend real money to aquire resources
requiring players to log in a certain number of cumulative days to reach a highly desired reward
seasonal rewards
influencing player to engage with the game very regularly if they want a chance to earn enough points every time they play to afford the reward before its gone forever
Hodent, C. (2020). The psychology of video games. Taylor & Francis Group.
Hodent, C. (2020). The psychology of video games. Taylor & Francis Group.
Hodent, C. (2020). The psychology of video games. Taylor & Francis Group.
encourages players to engage or stay engaged with the game even if we didn't have intention to do so initially
Hodent, C. (2020). The psychology of video games. Taylor & Francis Group.
Prominently displaying the odds of obtaining chance-based rewards
warnings of potential gambling risk
Age restrictions
removing/reducing game features that encourage excessive expenditure and gameplay (i.e. pay-to-win features, rare items, item selling and trading)
education and public awareness campaigns
remove 'time exclusive' loot box and ensure these items can be aquired through normal play
reduces the feeling of missing on the opportunity that is immediately present
Refund Entitlements
knowledge of player behaviour
some games' mystery boxes (loot boxes) are influenced by player statistics (i.e. how much money and time a player has spent on the game)
King, D. L., & Delfabbro, P. H. (2018). Predatory monetization schemes in video games (e.g. ‘loot boxes’) and internet gaming disorder. Addiction, 113(11), 1967–1969. https://doi.org/10.1111/add.14286
How much is being spent on IAPS
How much are users spending
Genre Revenues
Country Revenue
in 2025, the market value of in-game purchases is projected to surpass 74.4 billion U.S. dollars.
In 2020, global gaming audiences spent an approximate 54 billion U.S. dollars on additional in-game content.
casino app:12.28 U.S. dollars per in-app purchase transaction
ranking highest among all measured gaming genres worldwide
Arcade gaming: 5.14 U.S. dollars
Casino Gaming (2021)
Arcade Gaming (2021)
67.1% revenues were generated through advertising
In-app purchases only accounted for 32.9%
Ad revenue 23.81%
IAP 76.19%
China (2021)
Europe (2021)
59.3% revenue from advertising
40.7% revenue from IAPs
32.86% revenue from advertising
67.14% revenue from IAPs
RPG: US$8.95
strategy games: US$8.95 on
Card: US$8.86
Top 3 Downloaded Games
- Subway Surfers
- PUBG Moblie
- Garena Free Fire
Top 3 game based on Revenue
- Honor of Kings
- PUBG Mobile
Genshin Impact
Top 3 Game Genre
- Strategy: US$17.3 bn
- Puzzle: US$9.8 bn
- RPG: US$24bn
Use Graph for graph 1
click to edit
For adult users, of course you can make some suggestions related to payment method, corrective tax, etc; for underaged users (those who don't have a credit card), maybe it is more about command-and-control policies and education (for both children and parents).
You show the share of mkt by types of games (RPG, puzzle, etc
show global market share by giant companies
discussions on socioeconomic and demographic characteristics of IAP users (Links to Policy recommendations
who are 'at-risk populations'?
Gaming disorder
Competition
Casual Game
Low barriers of entry due to simplistiy of making the game
Looking at statista data Mobile game market is a monopolistic competition (google play only)
China's Mobile Game Market is a "Highly Concentrated"Oligopoly
Monopoly or Competition: Market Concentration of China’s Online
Games and Policies --> D.Chen
long and loud
tencent --> biggest market share
Belgium
A preliminary examination of the top-grossing iPhone games list in Belgium revealed that a number of games occupying prominent positions on the top-grossing list were found to contain loot boxes in the UK and in the People’s Republic of China and whose revenue likely mostly derived from loot box sales.
Ban has not effectively reduced loot boxes
82% of top 100 games have loot boxes
more present of illegal loot boxes in games by less established publishers
well known global publishers removed their games or simply removed access to loot boxes
encourage players to move to the less estabilished games where they are less concenred about consumer protection than established companies
The market has shifted towards higher risk illegal providers
2017, the PRC has been the only country to legally require video game companies to disclose the probabilities of obtaining randomized rewards from loot boxes
allow significant discretion to game companies as to how to implement these disclosures: probabilities can be disclosed either in-game on the loot box purchase page or on the game’s official website, and there are no requirements as to the size or type of symbol or wording used to signify loot box disclosures in-game; the placement of website disclosures; or how probabilities should be numerically or graphically communicated to consumers
From a policy perspective, the results of this study suggest that neither the PRC’s regulations nor the Apple Store’s self-regulatory policies (by which these games were also governed) were sufficient to encourage all of these games to display loot box probability information prominently and uniformly, which would seem to be the most beneficial for consumers