Psychology of Monetization

This lesson will start focusing on the reasons players spend money in games. Behavioral economics is the study of the factors that leads people to make decisions. Understanding why people spend money in games is really useful to get people to spend money in your games.

There are many different aspects to focus on why people spend money in games. Here are some common human behaviors that affect decision making:

1. Number of Choices

Imagine a restaurant that had one meal on their menu but had a hundred different drinks. Customers would be frustrated by lack of food options and overwhelmed on which drink to choose. Games should have a handful of choices for customers to buy.

2. Price Anchors

Anchoring a price is when a really expensive product is shown in order to make the less expensive items appear more attractive. The expensive product is sometimes priced so high that there is no realistic expectation that it will be purchased. As a player, the less expensive items look like a great deal compared to the really expensive product.

3. Price Decoys

Similar to a price anchor, a price decoy is a less attractive option used to influence people towards a certain product. For example, if a movie theatre sold popcorn at three different sizes (Small is $5, Medium is $9, Large is $10), then the medium sized popcorn would act as a decoy because it’s so close to the price of the large popcorn. People would rather pay a bit more if it results in a significantly better deal.

4. Foot in the Door

Once a player makes their first payment, then they are much more likely to make another. Game developers often offer starter packs which are exceptionally great deals to players making their first purchase.

5. Virtual Currencies

A virtual currency is essential in most video games because it represents a resource the player is collecting such as coins or gems. They may be bought using real-world currency and used to purchase items in game. It’s up to the game creators to establish a fair economy when setting the value of the virtual currency and purchasable items.

6. Variable Rate Reinforcement

This principle relies on a human behavior that gets more satisfaction from receiving unpredictable rewards rather than predictable rewards. People enjoy opening an unknown gift that has a chance of being rare treasures. Game developers use loot boxes to allow players to buy random items in hopes of getting a certain one.

7. Fear Of Missing Out (FOMO)

People do not like being out of the loop. For example, not being able to participate in a discussion about a new TV show because they haven’t watched it. This can be applied to video games as well. Hosting limited-time events or offering limited-time items can persuade people to play your game and make timely purchases.

8. Loss Aversion

Psychology suggests that people tend to value things that they already own higher than things that they do not own. An example of this in gaming is when a player is offered an extra life when they lose their last life. Players enjoy progressing in a game and are more willing to pay if it helps keep that progress.

9. Scarcity

Items that are rare or hard to obtain tend to have more value. Scarcity creates value and demand. Adding rare items to your game can result in players trying to purchase them for prestige amongst other players.

10. Reciprocity

Reciprocity is a social behavior when someone gives you something then you feel the need to give something back. Grocery stores do this sometimes by offering free samples in hopes people will buy the product. One way to do this in video games is to give out free boosters for the player to sample, and once they run out, offer a way to buy more.

Conclusion

Overall, monetization should be trying to enhance the player experience in your game. Use these concepts to reflect on your own thought process when deciding to make a purchase in a game. Understanding why you would buy something can be useful to motivate another person to make a purchase.