Why People Buy In-Game Items With Real Money?
This is the question that led to my graduation thesis. Recently, I saw someone tweeting this very same question. It was the trigger I needed to revisit my dissertation in a digestible format, something I have wanted to do for a while.
eSports are on the path to become mainstream. Even if games aren’t in your day-to-day, there is a high probability that you already heard about Fortnite, League of Legends, or Counter-Strike. In the core of the movement, the previously mentioned games are all free-to-play — you don’t need to buy the game to play it.
So apart from all the eSports sponsorship and organization, how do these games make money? One can purchase in-game items and pay to have access to a myriad of characters, with unique skills and playstyle. These in-game items don’t have a functional purpose. In video game jargon, they are called cosmetical items, which translates to the fact that they won’t give your character a competitive advantage in the game. For the game I studied, League of Legends, these cosmetic items are called “skins” because they don’t only change the character’s clothing, but also its full appearance like hair color, for example.
But why would someone buy a piece of clothing for an in-game character that does not make the character faster or stronger?
To start to answer that question, think about all the times you bought something that you didn’t need. Why did you buy it?
WHY WE BUY WHAT WE BUY?
Right now, I’m sure you know we don’t only buy for clear functional reasons. Sheth, Gross, and Newman (1991) defined a research model to explain consumption intention called Theory of Consumption Values (TCV), which consists of 5 values: functional, social, emotional, epistemic, and conditional. When organizing a trip, you may prefer to go by plane because it’s faster (functional), but you may be buying this trip because it’s Christmas (conditional). You want to see your family (emotional, social). The TCV model predicts and explains why someone buys or uses something.
The following studies applied the TCV model to explain in-game purchase behavior, such as the 2011 paper by Park and Lee. The authors adapted the original model to the video game context and also added two axioms that need to be previously confirmed for the behavior to happen.
- The player will only buy something in a game if they do enjoy the game;
- The player needs to identify themselves with the character they are playing to purchase in-game items.
The second one is my favorite part of the study.
AN INTERACTIVE MEDIUM
Unlike other media, video game enjoyment depends on the user to take actions, from moving, to jumping and selecting what to say in the dialogue. In other words, the player is part of the medium. It is as if you had to act with the actors to watch a play.
As stated before, the identification axiom defines that players need to identify themselves with the character to buy something for it. At first glance, it may be challenging to understand what this identification means, or how it is expressed. But it is seeing yourself as the character or projecting something you want to be — like victorious, for example. It can be as simple as only playing with the character you win the most or merely playing with characters that are female if you identify yourself as such.
To bring yourself close to the character is to start to see the character as yourself. This behavior is called the narrowing of self-discrepancy by Hefner et al. (2007). Park and Lee (2011) found that the more the player projects itself or sees itself in character, the more they are willing to buy something for this character.
Therefore, the purchase decision for a video game character suddenly becomes a purchase decision for the player.
SHOPPING BEHAVIOURS
So, to buy for the character is really as if we are buying it for ourselves. For my thesis, I applied the purchase behavior model by interviewing ten experienced players of the game League of Legends. It was fantastic to observe in-game shopping processes that one can relate to real-life shopping behavior.
Analyzing the answers, I found three clear shopping patterns. I called them Actors, Collectors, and Athletes.
Collectors are players that, being hyperbolic, buy everything they can. This means that they will buy “skins” that are not only for the characters they play with. They like to feel they are a skin game collector and see their decision also as a way to invest in their account. Reckon that some of these skins are limited editions that were sold only once in a brief period of time. Who bought it, bought it. The only way to have access to this specific skin is to buy the account itself which is sold in e-commerces like eBay and Mercado Libre.
Actors are those with a deeper tie with the character. Their mood influences what skin they will choose to play a specific round. While all players chose the skin as a way to express their emotions and feelings, these players do it to a different level. They are more interested in the character background story and this is an important point of decision for their purchasing.
Athletes are the “vanilla” of the profiles I’ve found. They don’t necessarily have any clear differentiator, like the previous two profiles, but also share points of decision with the other two. They also buy the skins, it also has a social effect (a skin can, for example, tell that I invest a lot of time in the game, therefore I’m a pro) and a self-expression effect (I buy the skin that represents me the most).
If you strip down the video-game specific words, like “skins” and substitute it with clothing words, you’ll see that we can relate to one of those three profiles, or a combination of them. And the truth is that you can extrapolate these profiles to every purchase decision that involves self-expression, and a social component. Clothing is just more obvious, but cars and traveling are the other two examples.
WHAT COMES NEXT?
At first, when we first think about the reason why people buy cosmetics in a video game, using real money, we tend to overcomplicate it. The key to starting to understand these decisions is to see that we’re buying it for ourselves and not for the character per se.
Fortnite became a pop-culture sensation due to its characteristics as a game, yet the current wave of mainstream discussion regarding the game is not the game per se. Since 2019, Fortnite has been hosting in-game concerts with real-world artists. Last April, a Travis Scott concert had over 12 million people watching it. Bear in mind that it’s not a video, you needed to be “playing” the game to attend the concert. It was visually mind-blowing — a giant Travis Scott rapping and moving through the scenario between other unreal experiences a virtual world can provide.
For the gaming world, the idea of being present day-after-day in a digital world with social activities, such as virtual gatherings, has been going on for a while. Nonetheless, it is still not mainstream, but the wish to change that exists.
A reason may be one of the defining characteristics of a virtual item: it’s zero marginal cost. For example, consider skins. To produce the first copy, two of the costs are labor and software licenses. On the other hand, the replicability of virtual items is infinite. The more a company sells the same virtual item, costs will be diluted between all copies. By the 1000th copy, the cost will be virtually 0, and the margin will be close to 100%.
It’s not a coincidence that the behemoths of technology are investing in video games. Google launched Stadia in 2019, and Amazon launched its first online game last month. What if gaming is not for you? Well, Facebook acquired a Virtual Reality hardware making company in 2014.
I may be talking about decades in the future now, but the idea of mainstream digital worlds funded by a full functioning market with virtual items may not be that far from us.
If you told yourself in December 2019 that you would stay a big chunk of your 2020 at your house, only connecting with your friends, family, and work digitally, what would you say?
References:
- SHETH, Jagdish N.; NEWMAN, Bruce I.; GROSS, Barbara L. Why we buy what we buy: A theory of consumption values. Journal of business research, v. 22, n. 2, p. 159–170, 1991.
- HEFNER, D.; KLIMMT, C. e VORDERER P. Identification with the Player Character as Determinant of Video Game Enjoyment. Entertainment Computing — ICEC p. 39–48, 2007.
- PARK, B. e LEE, K. Exploring the value of purchasing online game items. Computers in Human Behavior, v. 27, n. 6, p. 2178–2185, 2011.