The Perils of Freemium Gaming: Part Three - Dirty Mind-Tricks

Updated: Feb 12

Psychology, freemium gaming, gambling
The freemium gaming industry uses psychology to its advantage - at your expense

In the last article, we investigated what a ‘freemium’ game is, how a supposedly free game makes money, and how dopamine relates to the reward centers of the brain. In this, we investigate the underhand tactics freemium games use to pressure consumers into parting with their money.

Psychological Tricks of the Trade

The monetization of freemium games is centered around microtransactions. The value of each transaction is usually very small - ranging from around 50 pennies or cents to a few dollars or pounds. As such they may appear good value at the time of purchase. However, the freemium gaming industry employs a ‘little but often’ approach, which can result in players spending considerable sums of money without realizing it.

Strange Currencies

freemium gaming, gambling, virtual money
Freemium games often use virtual currencies to mask how much you are spending

Many freemium games use measures deliberately designed to make it difficult for players to assess the value of their purchases. This is done via introducing virtual in-game currency, such as Gold Coins, Gems, and the like.

This virtual currency is then used to purchase in-game items, continues, or extra lives. Some games take this a step further by adding a layer of virtual currency. For example, buying a power-up requires 5 gems, you get 3 Gems for 5 Gold Coins (GC), and you get 4 Gold Coins for $1.50. Now work out in ten seconds or less how much this powerup is worth in ‘real-world money’.

Some games make it even more difficult to work out the ‘exchange rate’ by using exchange rates that do not scale linearly. For example;

$1.50 = 5 Gold Coins, $2.00 = 10 Gold Coins, $2.50 = 20 Gold Coins.

5 GC = 3 Gems, 10 GC = 5 Gems 15 GC = 20 Gems

This gives the impression that by spending more you are getting extra value for money, whilst simultaneously making it confusing to work out exactly what that value is.

Sometimes games will use odd and unusual pay amounts to further confuse the player, for example, $3.27, £2.63. Since we have been conditioned to see prices as $/£ X.99 a smaller number of pennies and cents can mentally ‘wrong-foot’ us, whilst also giving the illusion of value for money.

Removing Pain Points and Introducing Time Limits

freemium gaming, gambling, time pressure, time limit
Freemium games often introduce arbitrary time pressure to wrong-foot players

Many freemium games exploit the above even further by removing pain points from the purchasing process, whilst also introducing time pressure. Most freemium games will allow you to link a debit card to your in-game account, thus enabling you to purchase in-game items and currency with a single tap. This makes purchasing very easy to do - pain point removed.

Another pain point removed by mobile gaming is access to your gaming device. You may well prefer to play your Xbox / PlayStation / PC etc., but you can’t take them out with you. Your mobile phone is almost always within arm’s reach however, always there when you have a few minutes to spare. Some freemium games will send you notifications if you have not played it for a while, therefore keeping the game in the back of your mind even when you are not playing it. But what if you do not have the time to play it, or must cut your session short? Freemium gaming has this covered - some games can be set to play themselves without you having to be involved at all.

The linking of your in-game account to your real-world debit card leverages another psychological quirk to separate you from your money - people paying by card tend to spend more.

Studies have shown that people paying for something in cash tend to spend less, as handing over the physical money feels ‘real’ or ‘impactful’ and you can see the amount you are spending. Handing over $200 in notes at the till feels like you are spending a noteworthy amount. This effect is reduced when paying by card at the till, and likely reduced even further when spending on-line.

Loss Aversion

Loss Aversion, freemium gaming, gambling
Loss Aversion diagram. Note the fear of loss is greater than the desire for gains

We are psychologically hard-wired to be averse to losing what we already have. This is probably an evolutionary throwback to when resources were scarce and hard to come by - those that hoarded their resources tended to survive and reproduce whilst those that had not died young.

Freemium games take advantage of this by making in-game items and progress ephemeral. If a player has spent hours on a game and has leveled up several times, obtained high-level in-game items, etc. they will be loath to lose them - they have become invested.

Many freemium games exploit this investment by resetting a player’s progress back to zero if they lose a round or fail to solve a puzzle - unless they pay $2.47 to retain it. The aversion to losing these hard-earned in-game items and progress, combined with the ‘sunk-cost fallacy’, is a powerful motivator to spend a little to retain a lot.

Fast Thinking vs Slow Thinking

Pressure tactics, freemium games, selling, gambling
Don't think, just buy!

The human brain has two main states of thinking, fast and slow. Slow thinking is conscious and is what we do when we carefully consider something, weigh up the options, assess the pros-and-cons, etc.

Fast thinking is near impulsive, instinctual, and barely conscious. It is the snap decisions we make based on gut instinct with little in the way of thoughtful consideration. These are the decisions that may seem like a good idea at the time but you may regret later when you have had time to think about it.

Freemium games want you to make your purchasing decisions whilst you are fast-thinking as you are more likely to spend. They do this by combining loss aversion with tight time limits. Remember earlier when I said work out the exchange rate of $ - GC - Gems in ten seconds or less? This is why.

Now do that whilst also stressing about losing the 20+ hours you have sunk into the game and the items you have already spent real-world money on. A prominent on-screen timer is ticking down 5… 4… 3…

Are you going to make an informed considered purchasing decision or are you just going to tap the $2.47 button in a panic?

This is the same tactic used by old school coin-op arcade cabinets - insert another coin before the countdown reaches zero to continue playing - but cynically taken to the Nth degree.

F.O.M.O. The Fear of Missing Out

FOMO, the fear of missing out, freemium gaming, gambling
The 'Fear Of Missing Out' is a powerful motivator for many people. The Freemium industry knows this.

Another psychological quirk exploited by freemium gaming is our ‘Fear Of Missing Out’. No one likes seeing an opportunity to own something they want pass them buy. However, this fear is especially strong in collectors and completionists - two groups over-represented among gamers. Freemium games exploit this by making some in-game characters, items, abilities, etc. time-limited. Such a promotion might look something like this;

Get [insert item] and dominate your enemies. Limited time offer! After [insert arbitrary date and time] it will be gone forever! Buy now for $3.26.