Are microtransactions the drug that feeds Asia’s obsession with mobile gaming?
Earlier this month, the World Health Organisation (WHO) voted to classify gaming addiction as a disease, prompting a swift pushback from the games industry.
The vote was based on expert consensus that some people “show a pattern of gaming behaviour characterised by impaired control,” which results in prioritising gaming over all other aspects of their life. In smaller print, WHO concedes that “gaming disorder affects only a small proportion of people who engage in digital or video-gaming activities.”
But it’s far more sensational to feed the fear that video games are out to enslave our brains, alienate us from friends, and make us lose our jobs. It’s just not as sexy to say “not all gamers have addiction, and gaming itself isn’t a problem.”
There are a lot of hot takes out there today about the new video game addiction disorder. Let's make one thing clear:— John Jiao, MD (@JohnJiao) May 25, 2019
VGA is not about # of hours played. It's when gaming takes precedence over health, hygiene, relationships, finances, etc.
Gaming itself is not a disorder.
That being said, recognising gaming disorder as a disease — one linked to impulse control and impaired behaviour — is important to help those that really do suffer from addiction. But if we really want to get at the source (or at least, a major source) of addictive gaming triggers, we really should start with free-to-play games.
To pay or not to pay
Free-to-play games are exactly what they sound like: you don’t pay a cent, but you get to play the game, which inevitably comes with some form of advertising. Freemium games are a little different: the base version of the game is free, but players must spend money (real or in-game) to unlock more content. Popular examples of these include mobile games like Fortnite, League of Legends, and Arena of Valor.
It’s a perfect sales funnel, especially if the game is actually fun — once a player feels sufficiently invested, it’s a matter of time before they decide to spend, say, a dollar on a new character outfit, or two dollars to unlock a new level.
Free-to-play mobile games take advantage of the psychology of addiction and conspicuous consumption — many of these games offer juicy microtransactions (sometimes presented as a “random” prize, loot boxes, or gacha) that can enhance a player’s performance or aesthetic. These features are especially popular in Asia, where gambling is an extension of cultural beliefs based on luck and superstition. Combine the gaming industry’s drive for monetisation with the psychology of gambling, and you’ve got a recipe for addiction.
Given Asia’s booming success of aggressively monetised games, we need to understand how these mechanics can amplify addictive behaviour. So what if the new WHO classification could lead to much-needed changes in the game industry? What if it could help to curb predatory practices? Could this be a blessing in disguise for players, developers, and industry ethics?
Making sense of microtransactions
Hyde (who only wanted to be identified by his screen name) believes that when it comes to monetisation, East and West have fundamentally different approaches. After all, money is a complicated subject with complex social rituals, especially within an East Asian context.
“I found that western communities are more intolerant against predatory monetisation while the eastern communities are more accepting of it,” the 24-year-old part-time developer explained on Discord. Hyde describes “predatory microtransactions” as those that “pressure players to spend money on loot boxes or gacha. These are often designed to have a big impact on gameplay and game experience, whereas non-predatory microtransactions tend to be for aesthetics and don’t significantly affect a player’s experience.
In digital games, there’s nothing quite as alluring as the siren song of virtual microtransactions. These are small (or sometimes not-so-small) purchases made in an app or game, often for rewards like new characters, accessories like “skins”, new weapons, or in-game currency. If you’re already a bit of a shopaholic, linking your credit card to a game account is a huge self-own: you know it’s going to be bad news, but you’re doing it anyway. Much like in the real world, your impulse to spend, acquire, and collect might just be your undoing.
Whelp, looks like microtransactions are still going to be a thing in the new COD. pic.twitter.com/8TRo2wfg74— GamrEnchantment ❤ #StJudePLAYLIVE (@GamrEnchantment) May 30, 2019
As a national serviceman who makes games in his free time, Hyde also plays free-to-play/freemium games with in-app purchases, most of which are multiplayer games. After all, in the same vein as “if a tree falls in the forest,” what’s the point of splashing out money on in-game gear and cosmetics if there’s nobody to show off to?
Hyde cited BanG Dream! Girls Band Party — a free-to-play Japanese rhythm game released in Singapore last March — as a major culprit when it comes to aggressive monetisation. He claims be familiar with “a few dozen veteran players” who’ve spent at least $400 on upgrades and content. The game is part of the popular Bandori media franchise, which follows the adventures of aspiring girl bands finding their big break in the live music industry. The in-game currency called “Stars” is used to purchase cafeteria food (coffee, fruit tarts, and even a macaron tower), decorations, new instruments, and other virtual items. Different types of Stars can be bought with real money, or acquired with the game’s gacha mechanics.
“A small group of people blinded by the heat of the moment can make a horrendous financial decision,” he said. “Most of the people I talk to who spend 5-6 digits on free-to-play games are usually financially loaded and are able to afford to do so… [these people] are known as ‘whales’”. The term “whales” is also a common casino term for wealthy bigshots with money to burn.
One game studio founder, who preferred to remain anonymous, agrees. “Part of [loot boxes] is the random element, so you open up a reward and you can get anything. It’s part of gaming in general. It’s the fun part. A lot of companies do this in unethical ways, especially if they don’t publish their drop percentages.”
The drop percentages for random rewards are crucial, because it gives transparency to players who are trying to get a particular item. As someone who’s been in the gaming industry for six years, the founder is concerned with trying to implement microtransactions in their own games, but in an ethical way.
But does he think gambling behaviour is more tolerated in Asia than in western countries? “I would definitely agree with that,” he said. “It’s much worse as a problem in the East.”
Money, money, money
If we see free-to-play games — especially mobile games — as microcosms of complex economics, then it only makes sense that we develop complex behaviours in response. Multiplayer games also have a strong built-in social structure, in which players have to collaborate or compete to make the most of a game. This means constantly improving on one’s character build and items, or unlocking more content for higher rankings, better loot, or the sheer prestige of it all. Within this framework, it’s only natural for free-to-play games to nudge its players towards microtransactions.
Adrian Kwong is a veteran lawyer who has spent more than 15 years working on the legal and licensing side of games, including a stint at Electronic Arts (EA). Today, he’s managing director at Consigclear, a firm that specialises in entertainment law with a focus on games and esports. “On the one hand, you do have that addiction worry. On the other hand, as a dev seeking sticky and engaged users who will hopefully be invested enough to want to spend on items or a season pass, you have some motivation to want to include a ‘compulsion loop’, right?” he said.
While Kwong is agnostic about gaming-addiction-as-a-disease, he does care about addiction in general, especially for the young. Ultimately, he’s a realist — at the end of the day, he doesn’t think these aspects of games can really be banned.
“I don’t think monetisation through free-to-play and micro transactions are inherently necessarily bad, and the reality is it did result in big and long-lasting changes to how games are made, and the business of games,” Kwong explained.
And he’s right – games today are a far cry from their one-and-done ancestors. But we’ve also evolved in our social perception of games: we now have a better appreciation of games as a legitimate art form. Older generations are beginning to understand the impact of gamification on many aspects of modern life.
Not sure why people are so offended by WHO naming gaming addiction as a disease.— Wykrhm Reddy (@wykrhm) May 26, 2019
If you love video games, then you must see that it has made & saved many lives but has also ruined & destroyed many lives.
Taking measures to address this is vital and that starts with diagnosis.
On a sociological level, multiplayer games also help people with social anxiety or disabilities, or who otherwise can’t socialise in traditional ways. Games are an excellent medium for people to make and maintain long-distance friendships and relationships. But as with all good things, there are also disadvantages to relying on a game — especially an aggressively monetised game — for social validation and a feeling of connection.
If the game is rigged, why even play?
Alwyn Lee has a lot to say about the free-to-play model. Back in 2011, the CEO of Daylight Studios was at the forefront of bringing free-to-play games to Wireless Application Protocol (WAP) platforms in developing countries. While Daylight Studios worked on free-to-play Konami games like Reign of Heroes and Swords of Fate, the studio is well known for its 2015 hit game, Holy Potatoes! A Weapons Shop?!
“Back [in 2011], iOS had only just come out,” Lee said on a Discord call. “So we started doing free-to-play, and we got in contact with Konami. The Japanese invented the free-to-play model — the gacha model — understanding human behaviour and psychology on how to make people pay.” While the Konami conglomerate is well-known for its iconic video games like Silent Hill, Castlevania, and Metal Gear, it's also a major player in arcade games, and the casino and gambling world. It even developed an app, SynkConnect, to better serve gamblers at casinos.
The power of gacha has long been a topic of discussion for regulatory bodies, concerned with its effects on impressionable youth. There’s also the issue of exactly how far game companies go to fix the odds in gacha mechanics. Back in 2012, Japan’s Yomiuri Shimbun spoke to a game engineer who confessed that he “routinely [adjusted] the odds based on the transition of real-time item sales, the number of playing users and so on…” because his company’s games depended on “how to keep the addicted paying users playing longer, without exploiting them so much that they give up.”
Lee has seen, first-hand, the exhaustive live operations and analytics required to make a free-to-play system achieve its full potential. “You need to understand why they come back to the game, why they drop off, and how to make them pay more,” he said, describing the profiling, targeting, and marketing involved, especially on Facebook. Because of this laser-like focus on economy, the free-to-play game business stopped actually being engaging and enjoyable. Lee decided to stop and pivot to premium games (basically games like Mario Kart or Dark Souls which don’t have a microtransaction economy — you just buy the game, and play it).
In spite of his experience working with monetisation and microtransactions, Lee is somewhat optimistic. “I’m actually thinking of going back to free-to-play, but in a decent way. Not a ‘pay to win’ model. More ethical,” he revealed.
“I was hoping this trend might change, actually. I was hoping that people might get sick of monetisation and it might die off. These kinds of games suck your life and soul and money away. Games, in the first place, are meant for entertainment.”
While walking the line between profitability and integrity is part and parcel of working in the industry, Lee brings it back to mind games.
“I agree that predatory monetisation is one of the big factors [in game addiction]. I did that before, and I understand the psychology. At the end of the day, it’s playing with the sociology. It’s too hard to resist, especially the first purchase. Research has shown that once you make first purchase, there’s a very high chance that you’ll make a second. You’re already invested in the game. And at the end of the day, game companies need to survive. At the end of the day it’s perspective — it’s all about self control.”
With great microtransactions comes great responsibility
Of course, not everyone has the kind of self control needed to manage their worst impulses. We see this with gambling in Singapore, as well as in Macau and Japan. But gambling today doesn’t just stay in gambling halls, casinos, your grandma’s weekly mahjong game, or even at funerals — if you’re free-to-play mobile gamer, chances are there’s an extremely accessible form of gambling right in your pocket.
Even with his concerns about ethics in monetisation, our anonymous game studio founder boils gaming addiction down to the individual. The fact of the matter is, anyone can get hooked on anything, depending on individual circumstances.
You're not an alcoholic if you have a glass of wine every night. You're not a gambling addict if you go to Vegas every year.— John Jiao, MD (@JohnJiao) May 25, 2019
So let's not be so quick to try and see this new disorder classification as an attack. It's not. It's actually a sorely needed diagnosis.
“I definitely think you can get addicted, yes,” he said, “but [addiction] is common to a lot of things — movies, food… you have to balance your lifestyle.”
Indeed, addiction hinges on lifestyle imbalances, poor impulses, impaired behaviour, and the WHO ruling is a valid and necessary step in recognising all of these problems in gaming. And while not all gamers are addicts, mobile gaming features have created inherently addictive qualities to suck vulnerable players in, both financially and psychologically.
“Gaming and loot boxes don’t help,” the founder confirmed. “Gaming takes advantage of that impulse. Maybe it does cause it, I don’t know. It’s a big question mark for me.”