It’s all fun and games until someone loses money
An exploratory study on the motivations to purchase in the field of smartphone
online gaming
Student: Davy Fung-A-Loi 10389083 Master’s Thesis
Graduate School of Communication Master’s Persuasive Communication
Supervisor: Prof. dr. Eugène Loos 23th November 2017
2 Abstract
The motivations to purchase virtual goods in online smartphone games who employ a freemium
monetary model was studied using a qualitative methodology. Smartphone online gaming is a
large industry with some companies making profits over $2.1 billion ((Päivikki, 2016). However very little research has been done specifically in online smartphone gaming and the new type of freemium model. The study entailed 15 interviews with participants aged 20-42 about several smartphone games to find out their motivations for purchasing within online smartphone gaming. The study used an overall framework of games developed by Fernández-Vara, (2014) and
applied it to smartphone gaming, taking into account all of the elements of games. Multiple motivations were uncovered; attitudinal, functional and hedonic reasons as well as ease of purchase. Moreover, the study found that the monetary system in smartphone online gaming resembles gambling. The study used a traditional gambling framework created by Binde (2013) in order to analyze this. Finally the study also uncovers reasons of competition and social pressure, but these alongside gambling were found to be unable to be linked to purchasing motivations. While the study did not show a link between gambling, competition, social pressure and purchasing it does showcase that these concepts exist within the realm of smartphone
gaming. Thus this exploratory study offers rich data and insights which can help develop
communications for existing businesses and be the base of future studies related to marketing in the field of online smartphone gaming.
3 Introduction
In the digital 21st century many smartphone games have come on the market. Some of these games employ a revenue model that is different than before, this is called freemium. The freemium business model has been around for quite a while and dates back to the days where companies such as Adobe used to have a free version of the software. In order to unlock it to its full potential one had to purchase a registration key. Due to the fact that its basic features were free it was widely shared, downloaded and installed (Wagner, Benljan & Hess, 2014). What makes it effective compared to non-digital goods is that you can easily lock and unlock media content behind layers, thus making it an effective business model. People don’t just buy or install the game, you make purchases within those games (Lim & Seng, 2011). These purchases are known as virtual goods. They can be items, improvements for avatars or other goods that
improve player experience, both functional and ornamental (Kim, Koh & Lee, 2009). Functional goods are goods that can influence the game mechanics in ways it would otherwise not,
ornamental goods are usually cosmetic or bought for hedonic reasons. In a growing market many video games companies operate these models. League of Legends reportedly has over 67 million active players (Kollar, 2016). Supercell, the creator of the online mobile game Clash of Clans reported a revenue exceeding $2.1 billion in 2016 (Päivikki, 2016). Some preliminary research has been done on this new phenomenon (Hamari, 2009; Lehdonvirta, 2009; Jung & Pawlowski, 2014). For example Jung & Pawlowski studied the phenomenon of an increased social virtual
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world in which users can be empowered. Moreover there is also a recent trend in the introduction of chance-based rewards that resemble gambling (Hamari, & Lehdonvirta, 2010) which can create scarcity. Subsequently it is important to understand the reasoning as to wat motivates people to purchase in these online smartphone games. There is a significant lack of research within this field due to the relative new technologies and developments. This study will contribute to filling this gap in research by producing rich data through qualitative exploratory research, interviews will be conducted with individuals who have purchased in these games. By understanding the motivations of players this study can help business to develop effective communications in order to increase their profits. Consequently the research question can be formulated as following:
What are the motivations of players to purchase in online smartphone games using a freemium model?
Theoretical background
In this section I will first outline the characteristics of games in order to develop an
understanding of the gaming framework in which our analysis will be conducted (Fernández-Vara, (2014, p. 87-114; Boellstorff, 2012). Subsequently I will discuss relevant found theories to these games from previous studies. I will discuss several motivations as to why people purchase:
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Attitudinal reasons (Wagner, Benljan & Hess , 2014), functional reasons (Hamari &
Lehdonvirta, 2010), hedonic reasons (Lehdonvirta, 2009), gambling reasons (Binde, 2013), social influence reasons (Fernández-Vara, (2014, p. 87-114; Ajzen & Fishbein (1977), reasons of competition (Fernández-Vara, (2014, p. 87-114) and finally, the ease of purchase (Ajzen & Fishbein, 1977).
Types of games
Gaming environments are wide and varied, as such I will first explain the type of environment that this research took place in. There are gaming environments that are relatively simple, such as when playing chess or Solitaire on your phone. Games that involve a more complex world have larger capabilities of driving more revenue due to the ability to lock layers of complexities behind either pay or time walls. The best example of this is Clash Royale, a game that has made over $2.1 billion in 2016 (Päivikki, 2016). Therefore I focused more on complex virtual worlds as the research was more pertinent to this area. First, a virtual world can be characterized as a multi-user virtual space, within this space players are capable of interacting and exploring with the world or its objects (Boellstorff, 2012) Furthermore the game contains mechanics that persist and change while you are not actively participating in the game itself. The world changes while you are offline (Fernández-Vara, 2014). As a result companies can design in game mechanics that develop an artificial need for functional goods. An example is that you are only capable of
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playing a limited amount of time using a type of resource. You are then capable of recharging that resource for a price.
Since games are so varied a framework was used in order to analyze smartphone games, this is to create a comprehensive overview of characteristics in smartphone games. This makes sure that all of the relevant elements are taking into account for the creation of questions and the analysis of results. This framework is based on Fernández-Vara, (2014, p. 87-114) and is originally a framework used for non-smartphone games.
The Framework of games
The framework consists out of 7 building block and was developed by Fernández-Vara, (2014, p. 87-114). The 7 building blocks are: The number of players, game mechanics, the spaces of the game, the fictional world of the game, the story, the gameplay experience and the game communities that exist.
The first building block concerns the number of players, this is important because it characterizes the relations not only to the game but also to each other. First there is single player: These are games that you play on your own or you play against the game, this is a common large element of smartphone games as it requires only the input of the player itself, the aim is to beat certain areas or environments of the game.
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Secondly is player vs player, this is a common configuration by which you match yourself against others. This can be done by both players inputting their commands with direct input (real-time) or with both players setting up commands that the game then executes for them in a longer period of time. This type of configuration is also important for freemium games because it enables a competition with other players in terms of accomplishments and social status (Alha et al., 2014). These are elements that can potentially drive sales, the competition and the incentives that are derived from that, people can purchase out of envy or because they want to be able to compete and win.
The second building block are game mechanics, these can be defined as how players operate within the rules of the game (Fernández-Vara, (2014, p. 87-114). It defines what players are able to do in the game, what they need to do to “win” the game, what the basic actions are and importantly, how they are restricted. The difference between mechanics and rules is rules dictates the outcome whereas mechanics are what players can do in order to achieve those outcomes. For example, a mechanic would be that you need to fight an opponent in order to obtain experience points. Game developers can use this as a layer in order to introduce premium content that is otherwise not as easily accessible or make progress more efficient by paying.
The third building block is the space of the game, this can be defined in multiple ways. Firstly, where you play the game, for smartphone users this would be on your phone. This can be anywhere where you have access to your smartphone and the internet. This can potentially
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influence the way you play or interact with the game as players can play the game while commuting or between small breaks at work. The second space is the virtual space where the game takes place, this means how you move within the game itself to a different space (e.g. from the menu to the place where you can interact with other players). This is defined by the game rules and by restricting access to certain spaces it adds a layer that game developers can emphasize in order to drive content that players can access through paying.
The fourth and the fifth building blocks are the fictional world of the game and the story that takes place within. This is an element of the game that describes what the space looks like, is it sci-fi-, is it fantasy or is it everyday life? What kind of story takes place? According to
Lastowka (2007) these stories are and worlds are important because it can give people the tools necessary to create user generated content or live out their fantasy. User generated content can then be used to drive marketing or to increase consumer engagement (Parise, S., & Guinan, 2008).
The 6th building block when analyzing games is about the experience that players have when playing the game, this is hard to generalize and usually subjective. It can be best described as the player’s attitude towards the game and how it deals with the challenges and how they perceive interactions with other players. This could be vital in relation to the “players of the game” part of the framework, the way players experience social interaction or competition can be important. The final building block are game communities.
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Game Communities can be important to the analysis of the game. These can exist either within the game or outside of the game. Within the game you can team up, discuss strategies or
elements of the game and build social relationships. This can also be a source that can advise you on what purchases to make. Now that we have established the framework by which I will
analyze the games I will take a look at reasons as to why people and what kind of virtual goods exist.
Attitude
According to Wagner, Benljan & Hess (2014) who did research on freemium music streaming services one of the most important factors of whether people are willing to spend money on services is the perception of the difference in the premium and the free service and whether it's “fair”. A positive attitude towards the free versions of the music service would lead also lead to a more positive attitude about the premium version. Consumers were more likely to pay for the premium version if the basic product was perceived as being good. However, there is also a bit of a paradoxical problem. According to their research they also found out that one needs to be able to distinguish the basic features of the free version and the additional features of the premium version. The premium version needs to be able to show clear benefits to its consumer for it to be worth paying for. The problem occurs then when companies need to have a
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positive attitude of the consumer towards the free version. Moreover, in a study done by the same authors (Wagner, Benljan & Hess, 2013) they also found out that a too positive attitude with the free version can lead to a negative attitude of the premium version. This was because users were already satisfied with the current abilities of the program and didn’t find the need for additional services.
Functional reasons
Functional goods can be seen as something that can be bought that directly influences mechanics of the game or allow you to interact with the game differently (Hamari & Lehdonvirta, 2010). Mechanics of the game can be used to constrain certain spaces of the game. An example of this would be only being able to play for a limited amount of time depending on a resource. This resource can be depleted but may also be refilled by using an in game currency. This in game currency can then be purchased with money, allowing for more playtime. Another example would be that you may obtain rare characters that have a higher power-level. You can obtain these while playing without paying money but can pay in order to have a higher chance or more opportunities of receiving such a character. Thus these are more rational, functional reasons as to why people purchase virtual goods.
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Hedonic reasons
Hedonic reasons for purchasing is more concerned with how purchases look or feel. One example of goods you can purchase are ornamental goods. These are often cosmetic or
decorative and do not directly have to influence game mechanics, an example of this would be items that enhance the appearance of avatars or the user’s interface. Virtual goods can also be a neither strictly ornamental or functional, rather they can be a combination of the two. The overall holistic reasoning to purchase can include function and other hedonic reasons such as such as visual appearance or sounds, background fiction or customizability. They can also be purchased because they look good to others or social reasons such as the rarity of character (Lehdonvirta, 2009).
Gambling
Some virtual goods are not sold with a “static” value, upon purchasing it you receive items that will give you a chance at certain virtual goods. This in many ways resembles gambling, as you have a chance of “hitting the jackpot” and obtaining that powerful card or character and a higher chance to obtain a relatively minor reward. In order to analyze this for gaming a framework will be used by Binde (2013) which is based upon previous research in the gambling industry, it identifies five key motivations to gamble.
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These are:
The dream of hitting the jackpot
Social rewards
Intellectual challenge
Mood change
The chance of winning
The dream of hitting the jackpot is about the fantasy that a player has in which it can reap the rewards against a (relative small) cost. In games this is the equivalent of buying summoning stones/scrolls/cards and thinking of those rewards. The second factor are the social rewards of gambling. These social rewards can be divided into multiple factors: communion, ostentation and the gambling environment.
Communion is the idea of getting together to gamble as a social activity. An example of this would be playing bingo or poker together. In games these are less prevalent but might be possible as you can open chests/scrolls/summoning stones/rare rewards while being connected online to other people.
Ostentation is the idea of being capable of showing off social status through the display of wealth or luxury but also skill. These games often allow you to showcase your progress or character to others – allowing you to “show off” your luxury.
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Next is the gambling environment, this is the place where the gambling takes place. It not only refers to the physical location but also the cultures and norms that occupy the environment. Traditionally this means a casino but in the case of online smartphone games it the online communities you can play in. Each game can have its own cultural references and rituals which are commonplace and which can lead to a sense of belonging within that community.
The intellectual challenge refers to being capable of influencing the results of gambling. An analogy can be made in poker where one can increase their chances of the reward by playing their cards right and by employing their skill in order to do so. In smartphone gaming this can mean gambling at the right time.
The fourth dominion is called mood change. This refers to a form of escapism while gambling. To be away from the world for a while and to focus on a simple task, it is seen as relaxing and simple. In online gaming this refers to opening scrolls or summoning stones in order to obtain rare characters and finding it a pleasurable activity to do in and of itself.
The final dominion is the most important dominion of any gambling analysis – the chance to win something great you would otherwise not receive. According to Binde (2013) this can be divided into two separate categories, that which is biological and that which is cultural. In terms of biological it is a combination of feelings that are elicited upon the anticipation of
something good or positive. This feeling is then made stronger when the brain receives
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The second portion is social-culturally, the norm within society is that of reciprocity – that is to say an individual receives what it deserves, note that this concept also refers to the theory of only wanting to pay for the premium version of the game if the player believes that the game deserves it.
Competition
One of the aspects that was present in the framework of games by Fernández-Vara, (2014, p. 87-114) was the presence of competition, specifically that the player configuration in these games
can motivate participants to purchase certain goods in order to be able to compete and win.
Ease of Purchase and social influences
Purchase intention is the willingness of a consumer to buy a certain product. In order to find out peoples purchasing intention a model will be used by Ajzen & Fishbein (1977) that can predict behaviour. According to Ajzen & Fishbein there are three factors that influence eventual
behaviour. Attitude, subjective norm and perceived behavioural control. The attitude is described earlier. Subjective norm is the social influences present from others, the more credible these influence are the more likely an individual is to intent to copy that behaviour, thus this can be a reason to purchase virtual goods, if others do it and it is seen as the norm then it is possible to be a motivation to purchase. The final part is the perceived behavioural control. This means whether
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the individual believes they can do that behaviour and may contain factors that inhibit or facilitate the behaviour. In the case of online smartphone purchases the ease by which you can purchase with the touch of a button may facilitate it. A technological different process may inhibit behaviour, an easy process could make it so that people spend more. The theory of
planned behaviour has already been used in a marketing related study of online studies by Hanse, Jensen & Solgaard (2004).
According to the concepts discussed in the theoretical framework the following sub-questions can be formulated:
Are attitudinal motivations a reason for purchasing virtual goods in smartphone gaming? Are functional motivations a reason for purchasing virtual goods in smartphone gaming? Are hedonic motivations a reason for purchasing virtual goods in smartphone gaming? Is gambling a reason for purchasing virtual goods in smartphone gaming?
Is competition a reason for purchasing virtual goods in smartphone gaming? Is ease of purchase a reason for purchasing virtual goods in smartphone gaming? Do social influences lead to purchasing virtual goods in smartphone gaming?
16 Methodology
Because of a lack of rich data available on a relatively new phenomenon a qualitative study was undertaken. A qualitative study is also more effective because these virtual goods can enhance a player’s experience which can be more closely examined using interviews rather than surveys (Ritchie, Lewis, Nicholls, & Ormston, 2013). This research build forth on earlier studies and hopes to lead to more insights in the field of marketing for virtual goods, more specifically in the field of smartphone gaming.
Sensitizing concepts
Sensitizing concepts are important to guide the process and the ideas, they were used to analyze and change ideas depending on discovery (Bowen, 2006). An approach was used inspired by the grounded theory (Glaser, 1978). Based upon the theoretical framework the following sensitizing concepts were developed, these serve as a guideline for the interviews:
Attitude Functional reasons Hedonic reasons Gambling motivations Social Influences Competition reasons
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Research Design
This study made use of interviews, according to Gill, Stewart, Treasure & Chadwick (2008) there are three different types of interviews. Structured, unstructured and semi-structured. Structured interviews work much like a questionnaire with exact questions. Unstructured interviews usually open with a question and then the interviewer will go where the participant takes him or her, consequently these can be very time consuming. In this study semi-structured interviews were used due to time constraints, however there was still a need to explore certain new rich data. Consequently in a semi-structured format there was still room for participants to talk about their experiences and how they affect their behavior but there were also more questions related to key concepts.
Interview guidelines
In order to guarantee validity the questions for the interviews were be based on the aforementioned sensitizing concepts. General interview guidelines were be used:
The participants were notified of informed consent (Appendix G). Participants were ensured that the interview was anonymous, and were notified of being audiotaped (For the interview guide, see Appendix B).
The interview started with some simple introduction questions and small talk in an informal way in order to make the participant feel at ease, these are ground mapping questions.
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By doing so it was possible to build up the confidence of a participant which would increase the insights later in the interview (Gill et al, 2008). This included questions such as what participants play, why they like the game and when and where they play. Moreover it also included some demographic questions such as age, gender, income bracket and education level. The secondary part included questions about attitude and perceived value of the premium additions to the game. The third part was more specifically about the type of virtual good. Participants were left open to answer as much as possible by including questions like “Have you ever bought a virtual good?”. This segment was divided into two parts, first more questions were asked about functional goods, secondly participants were asked about more ornamental goods, goods that are bought for more hedonic reasons. After this segment the interview moved on the section about gambling, the monetary system and how they experience this part of the game. The interview ended with questions about the ease of purchase and whether the respondents had any remaining questions or additions as well as their amount spend.
Sampling
In this study theoretical sampling was used, according to Glaser (1978) theoretical sampling can be described as obtaining and analyzing data after which the analyzed data is used as tool to find out what new data to look for. The study was able to obtain 15 interviews, according to Baker, Edwards, & Doidge (2012) this should be enough to obtain sufficient data and lead to the
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saturation point, which means that more data does not add anything substantial (Cleary, Horsfall, & Hayter, 2014). The criteria for selection was that these individuals install and play online video games which employ a virtual goods revenue model (overview of games can be found in Appendix A). Within the sample the study aimed to find at least a few individuals who play on their smartphone as well as a few individuals who spend a significant amount of money on the game. Participants were found to be between 20 and 42 and were obtained using the
interviewer’s social network and snowball sampling (Appendix F).
Validity
According to Maxwell (1992) there are several types of validity, descriptive validity, interpretational validity and theoretical validity, generalizability and evaluative validity. The first factor deals with whether the study was credible and that the answers that were given were in fact given. In order to deal with this transcripts and audio recording are available. Second is interpretational validity, the overlap between the meaning that the author attributes to a phenomenon and what the actual behavior of the participant is. In order to improve interpretational validity it is important to use the themes and words that people use to describe themselves and wonder why they use those (Maxwell, 1992). By attempting to put yourself in the perspective of the interviewee (their situation and context) the interpretational validity is increased. The third factor is theoretical validity, this pertains to how the study was capable of
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explaining the relationships and concepts in the study. In order to increase this theoretical sampling will be used to continuously update the study with theories that may explain the phenomenon. Moreover theories will also be drawn from previous literature about the subject. The fourth is generalizability, both internal and external. Internal refers to whether generalizability exists within the study and external refers to whether the findings may be transferrable to other areas of research. External validity may be improved by applying theories from other research to explain certain phenomenon found within this study. By explaining the relations and theories in detail the person who wishes to generalize these to other fields can judge whether it is transferrable. Lastly evaluative validity refers to whether the author was capable of analyzing the data without bias (Maxwell, 1992). Due to time constraints it was not possible to obtain a second coder in order to achieve this.
Reliability
Reliability in qualitative research has not always been seen as necessary because the qualitative nature of the research means it cannot be generalized (Golafshani, 2003). Instead I will be using the framework of verification developed by Morse et al. (2002). This consists out of
methodological coherence, appropriate sampling, collecting and analyzing concurrently and thinking theoretically. The core of this approach is that you continuously evaluate the data and approach and as such ensure the highest degree of reliability.
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Analysis
After the interviews were done they were transcribed to text form in order to make it possible to code them. Then a process of open coding (Burnard, 1991) took place to identify categories and themes in the coding program Atlas.TI. Subsequently these categories were collapsed and coalesced into fewer categories to see what the overarching concepts were. Finally analysis of the themes were done and relations explored between them, known as axial coding (Boeije, 2002). Subsequently concept-indicator models were developed.
Results
15 individuals were interviewed between the age of 20 and 40, interviews took place online and also included multiple games such as Clash Royale, Summoner’s War and Fire Emblem Heroes. Most of these games fit the overall framework of games and used similar mechanisms and frameworks by which they operate in. Interviews varied in length and took between 18 and 30 minutes. The analysis was done using Atlas.TI, the codebook can be found in the appendix (Appendix D). In order to increase interpretational validity vocabulary used by participants was used, this can be found in the appendix (Appendix E). Participants playing time varied between 30 minutes a day to multiple hours a day, they often played during commutes or when they were
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bored at work or study. Moreover the amount spend varied between 50 and 1000 US dollars across 3 years.
Attitude
When it comes to attitude many respondents reacted positively to the game they were playing; one respondent: “K: It's still quite good I like the gameplay the graphics I enjoy that and then the Summoners War, the battle system is quite nice so I enjoy that as well.” Many users rated the experience as being very good.
Some individuals expressed that they didn’t spend that much money because it satisfied their needs or that they felt like it wasn’t very attractive to spend money on it. “J: So this game, lots of games are on the market so I have tried a lot of them and I think this game does the free version very very well. Part of that is kinda funny that they make spending not worth that much, you have to spend a lot (emphasis on a lot) to gain a decent advantage over someone who doesn’t have that”.
Respondents who spend less money on the game also felt like they weren’t invested enough in order to pay money for it, they were fine with waiting and were not interested in more playtime. When it came to the premium additions to the game none of the participants
recognized the word premium, this was because the games had micro transactions but not a premium mode or a free mode. However when it came to the perceived price value many of the
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respondents actually exclaimed that they did not felt like it gave good value for money; “Kh: That is an uuh absolute no (chuckling), I think what you get is very good but the price is astronomically high”. Subsequently respondents then rationalized it by saying that it's the only way to obtain characters, that they liked the game and that the game gave them a lot of
“freebies”, indicating a positive attitude towards the game but not an overt positive attitude. “ Kh: I mean it's the only way to get really good characters so I guess it's not that bad, plus they give you a lot of freebies but I’m just complaining that the gem price is ridiculously high”.
Functional reasons
Many respondents mentioned how they felt like they didn’t necessarily feel like paying to bypass resource restrictions related to amount played unless it was absolutely necessary. “D: No I just bought orbs, stamina and feathers were plenty for me. The moment I started the game it basically gave it out like free candy so I have a ton of them left”. Most of the time people didn’t play enough to need to spend specifically for this, when they did it was part of a “bundle” of goods that they bought. The instances in which people did buy resource bypassing functional goods were occasions where a game had a certain window of time where using that resource became extremely valuable; “Kh: (excitedly) events, yes events yes: so that's a very good way to spend gems to refill your stamina to farm that specific character. Respondents referred to these as events and farming as spending a larger burst amount of time on playing the game. Many
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respondents did exclaim that they bought functional goods in order to obtain extra characters that they would not be able to which is a way of bypassing functional restrictions. In none of the interviews did the respondents claim that areas or content was not completely accessible without paying, only that it would make it harder.
One thing of note as was that five respondents noted how events were a large driver for buying, many of these games operate with the gambling monetary system. Games would organize “events” in which certain characters have an increased chance of being awarded, thus making the reward more efficient. This seem to be a common practice: “J: if you pull 10 in a row you get the 11th for free so that's obviously the best deal therefore the only time when I spend money on these gachas is when an event comes around and I can get a super rare character and I get a free pull”.
Moreover one participant also noted that to be more efficient you therefore buy in bulk and have “bursts” of payments. H: I Don't remember but maybe, they probably did, I didn’t like buy a chest and 5 days later buy another chest right, I spend just 50 bucks on chests in 1 go”.
Hedonic reasons
Ornamental goods were not mentioned that much exclusively, often they were combined with a functional approach and were not specific to just appearance. Ornamental goods also had a functional mechanic as they were characters in itself and were limited in most games researched:
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“Kh: No basically just characters and ships, ships are actually functional, not actual skins”. There was no clear difference between ornamental and function goods, individuals did take into consideration hedonic attributes when purchasing goods. “N: I got them, I like the character design, the artwork and the voice-actors that voiced the characters”. One participant mentioned that they liked to customize their character according to the theme: “T: Mostly
because it's either something that cosmetically that fits in with the theme of the game like buying a lightning sword because my character uses lightning arrows”.
Three participants also noted how the game and its characters is an extension of an existing franchise that they really like. “D: Yeah, so it's basically I feel like especially in games like Fire Emblem that has 20 years of history behind it you simply buy it for the characters for the game and the place in the Meta tier list.
Gambling
Most of the games had a monetary system that included a form of chance upon opening or receiving rewards. 12 participants mentioned feeling a kind of rush or excitement when opening these purchases and getting the reward. “S: Well when you get oh you mean for Summoner’s War you get the kinda like issss you do it feels really weird you get really hyped and happy and you start to cringe and shiver at the same time . but uhm and then you kinda like you play even more you try this hero out and you challenge other people that you got this hero. ”. “Ha: it felt great,
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like getting an Instagram like”.
Most participants were also aware that they were in fact playing a game of chance or gambling. C: I do enjoy is the gacha part mechanic, you virtually gamble for what you want”; “J: but I do summon them obviously and I do see how gambling gets back in there”. Participants also exclaimed that they got excited at the prospect of it, anticipating the rewards: D” Yeah definitely, it's just the moment you get restless you need 20 to get the full package and you get the stuff, the moment you start to see every color you want you get hyped with anticipation like am I gonna get it.” (excited).
Participants also noted that it was a fun to gamble in and of itself and enjoyed the act of it regardless of the act of reward. Hb: yeah that probably happened if I like I had to like wait a day or something right to buy it I definitely wouldn't have bought as much but at the same time like some time I just want to open something right now for fun”. Th: “Yeah I have, so sometimes I see you pull 10 but sometimes I am bored or something so I just pull uhm and sometimes I get something good so I am like this is fun this is great!"
Moreover, four individuals also expressed how the very act of gambling was a social experience, one participant would gather in real life: “D: Yeah, we also in general do that with friends we wait until we have a certain amount of orbs and then we all like we all just open it together and see what we can get”. One user even said that it is done online without any help from the developer: Kh: “No there are no chat screens there are no in terms of chatroom or
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anything but what most people do is that we gather in some Twitch channel and then we pull and then everyone (excitedly) oh shit oh shit.”.
Finally, the act of gambling can also become a conversation piece to talk about M:”In general just because it’s become a conversation piece at some point in general we just talk about that kind of stuff and we are interested to see what other people get, let’s try and open them together I don’t know it’s like, the moment you get something it’s like bragging rights? Because in general it’s like hey look what I got… oh you Mother*******! (laughing)”.
When it comes to an intellectual form of gambling or gaming the system like in Binde’s (2013) gambling framework no indicators were found.
Competition
10 participants indicated that competition was a part of what motivates these individuals to play and that they found it important: “H: I spend - uh I wanted the good cards, its kinda pay 2 win? There is skill in it and a strategy thing but I wanted a legendary deck - baseline legendaries I thought they were cool”. “S: Yeah I want to be decent and I want to win but I don’t have to have it be perfect but a little bit is cool”.
Individuals pointed out that they didn’t really wanted to spend enough money to be the best. It was fine as long as they were decent. “: Ha: No I just want to have more fun, it’s fun to win.” One participant also described that this competition part can exist with gambling as well
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“Ha: well if my mate didn’t get that character I would be lucky enough to have them, I would enjoy that feeling”. Note that this is consistent with Binde (2013)’s theory about you receiving more then you “deserve” and thus you become happy.
Social Influences
Individuals expressed being able to show off your rare character. “T: Yeah definitely! I had a defense system and even though it may not look work well in battles I really want to show it off it looks good it, it’s just to show off”.
It can also be seen as a sign of an experienced player or someone willing to invest a lot: Th: typically the people who have the end-tier cosmetics or characters or that sort of thing I would typically make the assumption they are better players, they are the better player because they spend either the money or the time in it.
Moreover a participant also pointed out that user generated communities were filled with posts about people getting lucky when it comes to gambling and that people were congratulating that person. “J: The subreddit it's always filled with Luck posts like hey I got this character etc. and also with the ease of purchase, like hey I spend money and I just got this NAT 5 so it makes it seem like – there is a lot of pressure. Individuals can feel a kind of envy or jealousy towards someone: K:” uhm well I dunno sometimes I think it looks better than me so I have it better than me”.
29
Ease of Purchase
15 participants stated that they found purchase to be quite easy, no one indicated any trouble “H: yeah it's like 2 buttons it's connected to like your Google Account,”. Participants noted that the process was very easy and that they usually had their credit card, Itunes account or Google Play account already connected to their phone. With a touch of a button they could then purchase virtual goods in game. In fact 7 individuals indicated that they had done an impulse buy and that this ease of purchase could have played a factor. K:” Yeah definitely it was like a 1 button system, like because it was so easy at the time I didn’t even flinch at the time that spending that much money it wasn’t like should I do this or should I do that it was so easy if it was payday”.
Concept Indicator Models
Multiple concept indicator models were created in order to provide an overview of the results (Appendix C). The indicators found illustrate the relevance of the theoretical framework used to analyze the games in this study. The main concept indicator model indicates that attitude, functional reasons, hedonic reasons and ease of purchase are reasons as to why individuals purchase virtual goods. The second concept indicator model is about gambling, the framework of Binde (2013) was effective at showcasing it exists but individuals did not link it to purchasing virtual goods. The same is for the two remaining concept indicator models, social influence and
30
competition. While those elements exist in the realm of smartphone gaming there was an insufficient indication that they lead to purchases.
Conclusion
The study was successful exploring smartphone online gaming monetary systems. Multiple motivations were revealed. Firstly, consistent with research found in (Wagner, Benljan & Hess, 2013) the attitude towards the game needed to be positive. A too positive attitude could lead to people purchasing less, especially when the additions felt not necessary. It is interesting to note that some participants claimed that the perceived price value was bad but they always
backtracked and rationalized as to why they purchased either way, thus attitude to the game is a reason as to why people purchase or don’t purchase.
When it comes to functional reasons participants often pointed out that they had used functional goods to bypass resource restrictions, however often they didn’t feel the need to as they didn’t play enough. The type of functional good that was spoken about more was the type that allowed them to obtain more characters rather than obtain more playtime. Playtime was usually only bought in instances where rare characters were available for a short-time and where participants had to play a lot. Thus functional reasons were uncovered as to why people
31
In the interviews very little ornamental goods were found, they were often combined with a functional good or rare character. Participants did feel driven to buy because of hedonic reasons, the voice-acting, art, or overarching story were reasons they gave as to why they wanted to buy new characters. All of this is consistent with research done on non-smartphone games (Hamari, & Lehdonvirta, 2010).
When it comes to gambling Binde’s (2013) 5 dimension gambling theory was found to be an effective framework and very much present in smartphone online gaming, most users were actually aware that they were gambling. Participants pointed out that they felt a hype or a rush when gambling and that the anticipation of gambling or the rewards was something that they enjoyed. Moreover, gambling was a fun act in of itself regardless of the rewards and was also seen as a social activity, individuals gambled together both online and offline and also is seen as a conversation piece. No indicators were found for the intellectual challenge part of the theory, moreover. While gambling was definitely seen as fun, the link to people purchasing because of gambling rather then it being the only way to progress was missing. Thus while the gambling framework is very much present the study was unsuccessful in uncovering motivations to purchase related to gambling.
Competition was seen as important to the game and an important reason as to why people play, however there was not enough of an indication that this motivated people to purchase. In the realm of social influences players recognized certain interactions with each other and that
32
the game allowed you to show off your rare characters you acquired, moreover two participants also noted that having end-tier characters or cosmetics indicated a certain level of commitment or strength of that player.
While participants were aware of social influences and saw how it could drive people to purchase they never admitted it themselves, possibly due to social acceptable answers. Finally, all participants indicated that the games made it really easy to purchase virtual goods and that they never had problems. In fact some of the individuals even pointed out that they felt like it made the purchasing too easy and they had impulse bought just for fun, thus the study uncovered that the ease of purchase can be a factor to buy, even so far as enabling individuals to make impulse buys.
Overall the study did well in uncovering people’s motivations for purchasing virtual goods. It also confirmed the study done by Wagner, Benlian, & Hess (2014) on attitude despite there being no clear difference between the premium and the free version of the game. It is interesting that the gambling framework by Binde (2013) can be applied to the monetary system of these games quite effectively. Finally when it comes to social pressure and the competition element it was present in the games but not enough indicators were given so that it can be linked to purchase intention. Consequently research can be done on marketing techniques of social pressure, competition and gambling and apply it to these games to see the effects and whether a link can be established. Overall not only is this study useful for further research when it comes to
33
those areas but it also offers a look into the vocabulary, themes and framework of games, while formally used on PC or console gaming, it was successfully applied to mobile gaming. The framework designed by Fernández-Vara (2014) proved to be an effective tool to make sure that all elements of the game were taking into consideration when developing the questionnaire and analyzing the results. Businesses can use the results of this research to develop offerings or communications, for example time events can be introduced in games as they prove to be an indicator or purchasing functional goods.
Discussion
The study has some drawbacks that one has to be critical about, the sample size used was done through the interviewer’s social network. This means that it is possible that the social circle of the interviewer had an influence on the results and could have some interviewer bias. Secondly all of the participants were male and were between the age of 20 and 40 and mostly college educated. It is therefore possible that people who are not college educated or male make their purchases differently in game or spend it differently than others. Moreover, specifically when it comes to spending money on virtual goods and whether they were influenced socially
participants denied or referred to others as potentially being influenced. This could mean that there is a desire to deny being influenced or that individuals are not aware of being influenced. Thus it is possible that social influence and competition does influence players to purchase but
34
were not willing to admit it. Finally when it came to gambling, most individuals recognized that the monetary system was a form of gambling, it is possible that if individuals do not know this that they react differently to the framework of gambling. Furthermore a limitation of the study was that since it is a quantitative study that it can be hard to generalize the findings. Finally one important limitation is that because the interviews were done via a VOIP program. This means that it was not possible to analyze the participant’s facial responses or read emotions, this had to be done by identifying analyzing the voice pattern of individuals when responding to some questions.
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Appendix A – Fire Emblem Heroes – Clash Royale – Summoners War - Fate Grand Order - One Piece Treasure Cruise – Dota – Clash of Clans
Building Blocks: Short explanation
Number of players A combination of Single player VS game, Cooperative play, team competition and player vs player.
Game Mechanics Limited amount of playtime dependent on a resource. A degree of rarity on obtaining certain aspects of the game(e.g. characters or improvements.
No specific “end goal”. Spaces of the game – a description of
what the game looks like and how to navigate it.
The play space is on a smartphone and its environment. Limited interaction with other players. Players operate from a “home base” to proceed to a different space in order to enact gameplay.
The point of view of the player is a top down view where one can see its characters in 3d.
Fictional world of the game Fantasy based.
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to fight “evil”.
Gameplay Experience Fighting against individuals and players using avatars. Sometimes collaborating with other players to fight evil.
Game Communities The game itself.
Online forums Online chat rooms
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Appendix B Interview Guide
Interview guide
This was the general setup and in general these were the questions asked, sometimes they were skipped or adjusted based upon the participants.
Introduction:
· Research on games with virtual goods.
· Notify participant that this is for a master thesis. · Notify that there will be an audio record.
· Notify how long the interview will be roughly · Verbal agreement (recorded) on informed consent Segment 1:
Making participant feel at ease and getting an idea of what games the participant plays and why. Use informal language and begin with stating your own experience with these games. Then ask them what motivates them to play the game and how much do they play. Common themes and characteristics may influence and correlate with monetary spending and as such are important to find.
42
Questions after introducing yourself:
General questions for introducing and making the participant feel at home
- 1.1 What games do you like to play? - 1.2: Demographic questions:
o 1.2a – What is your age? o 1.2b – What gender are you?
o 1.2c – What is your level of education?
o 1.2d – if you wish to answer, what income bracket would you roughly be? - 1.3. What is your past experience with games before smartphone games?
- 1.4. What do you like about these games? - 1.5. Do you play single-player or multiplayer? - 1.7. How much time do you spend playing the game? - 1.8. Where do you usually play the game?
- 1.9. Is usage as a social activity for you?
- 1.10. What do you think about the free version of the game?
From here on touch upon the relevant themes and ask the necessary questions to obtain the information. Closely l for emotions that are evoked when talking about motivation.
43 Segment 2:
Key themes:
Thoughts and feelings on the monetary system and purchases. Aim of the topic is to find out more about why people purchase virtual goods. Closely listen to the the participant for emotions when they talk about why they purchase certain goods. Open up with detailing your experience with these to make the participant feel at ease. Some of the questions are fairly general and open, leading to minimal leading on for answers. Due to some responses not all questions were always used during these interviews. These are then the following questions:
- 2.1. How come you chose this game? - 2.2. What did you like about it?
- 2.3. Is there anything that you think was missing? - 2.4 Have you ever spent money on a game and why?
- 2.5. What did you think initially of the virtual goods offered?
I let the interviewee do most of the talking but point out the following if the interviewee wanders off too far from the themes that need to be discussed. I opened up with my own experience of purchasing to make the individual feel comfortable.
44 Cluster 1: Attitude towards the use of the free/premium version of the game and purchase
intention.
ATTITUDE:
Attitude has been a focal point of research for many companies, it describes what individuals think of your product or company. Fishbein and Ajzen (1977) were one of the first to
operationalize and popularise the concept in a model that can be applied. An attitude consists out of multiple facets, beliefs that are salient to the individual, how important those beliefs are and whether they believe the product to contain those beliefs. If you combine multiple attributes that all have various amounts of weight you come will obtain the attitude towards the game and as such quality of the game. According to Erickson & Johannason (1985) this quality is then related to price. The better the price-quality relationship the more likely individuals are to purchase the product that is there. As such we will use a Likert scale type questionnaire to determine the attitude towards the premium/free version. These questions are based upon Wagner, Benlian & Hess, (2014). In which they used these questions to determine the attitude between a free and a premium music program:
Please describe the game as following:
3.1. The basic version of (the game) (…) very bad—very good (…) very unfavorable—very favorable (…) highly uncreative—highly creative (…) least attractive—very attractive
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3.2 Attitude premium (AP) The premium version of (the game) (…) dislike quite a lot—like quite a lot) (…) unsatisfactory– satisfactory (…) very unappealing—very appealing
3.3 Perceived price value (PV) of the game premium is reasonably priced - At the current price, the game premium provides good value.
Cluster 2: Functional functions and ornamental functions and reasons to purchase virtual
goods.
Functional virtual goods
“An item’s functional effectiveness is a function of its potency as well as the game environment and its rules. By modifying the environment and the rules, the effectiveness of certain items or item types can be affected without touching the items themselves.” (Hamari & Lehdonvirta, 2010)
The following questions were used:
4. 1 Have you ever bought something to bypass certain restrictions in the game? Explain. 4. 2. Have you ever bought something to increase your effectiveness at the game? Explain.
Hedonic reasons to purchase virtual goods consist out of the following attributes (according to
Lehdonvirta, 2009) Hedonic attributes :
· Visual appearance and sounds · Background fiction
46
· Customizability · Cultural references · Social attributes: Rarity
Questions derived from that are as following:
4.4. Have you ever bought something simply because it looks good? Can others see your purchase as well? What do you think of the world of the game?
4.5.What appeals to you when purchasing or searching for ornamental goods? Explain. 4.6 Have you ever bought something so that you could complete your collection? Explain.
Cluster 3: This cluster will deal specifically with the monetary system commonly used as a
form of gambling,
Gambling (Binde, 2013) can be referred to as the activity by which one plays a game of chance to obtain money or other stakes.
Theory: 5 domain theory
The 5 domain theory was developed by Binde in 2013 to explain 5 overarching reasons as to why people gamble, these are: 1. Dreaming to hit the jackpot, 2. Social Rewards, 3. Mood Change, 4. Intellectual Challenge, 5. Chance of Winning. Dreaming to hit the jackpot alludes to the fantasizing of obtaining the large payout. Social rewards refer to community, their cultures practices or for social interaction with others. Mood change refers to the affective and emotional change upon gambling, to see it as a relaxing activity. Intellectual challenge refers to being able
47
to increase the chances in so far as that you have a higher chance than normal to achieve
rewards. You gamble “smart” instead of just gambling with the odds at hand. Finally the crucial part of gambling remains the chance of winning. This refers to both the affective and emotional change of anticipating a win or something you otherwise would not receive. The second part is more cultural, the idea that you defy the system and receive more then you should, seeing yourself as being exceptional or as a winner.
Questions derived were as following:
5.1. Dreaming to hit the jackpot – have you ever thought about what you would do if you got an extremely rare character?
5.2 Social Rewards – what do you think of the community of the game? (includes ideas about online communities), have you ever opened chests together?
5.3. Intellectual challenge – have you ever done something you would consider a “smart” purchase when opening chests? Did you game the system?
5.4. Mood change have you ever bought something in the game just for fun? To open a few scrolls to see what you get?
5.5 Chance of winning – how did opening something rare make you feel?
48 Cluster 4: Social influence and competition
Questions were derived from the game methodology framework set up by (Fernández-Vara, 2014).
6.1 What do you think of the competition in this game? 6.2 Are people able to see your progress in the game? Cluster 5: Ease of purchase
Perceived behavioral control
How much would you agree with the following statement?
7.1: I find purchasing of virtual goods to be complex (strongly disagree – disagree – no opinion – agree – strongly agree)
7.2: Electronic shopping of game purchases yields problems for me (strongly disagree – disagree – no opinion – agree – strongly agree)
Segment 3: The end of the interview:
8.1 How much money have you spend on the game?
8.2 Do you intend to purchase in the future?
49
50 Purchase intention Atittude Positive attitude to still buy : So this game, lots of games are on the market so I have tried a lot of them and I think this game does the free version very very well. Part of that is kinda funny that they make spending not worth that much, you have to spend a lot (emphasis on a lot) to gain a decent advantage over someone who doesn’t have that Hedonic Reasons
Art, voice acting, world building - established world Yeah, so it's basically I feel like especially in games like Fire Emblem that has 20 years of history behind it you simply buy it for the characters for the game and the place in the meta tier list. : I got them, I like the character design, the artwork and the voice-actors that voiced the characters” Customization :mostly because it's either something that cosmeticall y that fits in with the theme of the game like buying a lightning sword because my character uses lightning arrows Functional Efficient if you pull 10 in a row you get the 11th for free so that's obviously the best deal therefore the only time when I spend money on these gachas is when an event comes around and I can get a super rare character and I get a free pull”.
Only way to obtain characters “ I mean it's the only way to get really good characters so I guess it's not that
bad, plus they give you a lot of freebies.”. Ease of Purchase Easy to do Impulse Buying Yeah definitely it was like a 1 button system, like because it was so easy at the time I didn’t even flinch at the time that spending that much money it wasn’t like should I do this or should I do that it was so easy if it was payday yeah it's like 2 buttons it's connected to like your Google Account,
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Appendix C. 1.2 Gambling concept indicator model
Gambling
Social Experience
Yeah, we also in general do that with friends we wait until we have a certain amount of
orbs and then we all like we all just open it together and see what we
can get”.
Gambling Rush when recieving
rewards
Well when you get oh you mean for
summoners war you get the kinda
like its you do it feels really weird
you get really hyped and happy
and you start to cringe and shiver at
the same time. but uhm and then you kinda like you play even more you try this hero out and you challenge other people that you got this hero (excited)
Gambling as a fun activity
: “Yeah I have, so sometimes I see
you pull 10 but sometimes I am bored or something
so I just pull uhm and sometimes I get something good so I am like
this is fun this is great
Dreaming of the Jackpot
Yeah definitely, it's just the moment you get restless you
need 20 to get the full package and you get the stuff, the moment you start to see every color you want you
get hyped with anticipation like am
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Appendix C.1.3. Competition and social influences concept indicator model
Competition
Want to win
S: Yeah I want to be decent and I want to win but I don’t have to have it be perfect but a little bit is
cool
“H:I spended - uh I wanted the
good cards, it's kinda pay 2 win? There is skill in it and a strategy
thing but I wanted a legendary deck - baseline legendaries I
thought they were cool”.
Social influence
Envy
:” uhm well I dunno sometimes I think
it looks better then me so I have it better then me”.
The subreddit it's always filled with luck posts like hey I got this character
etc and also with the ease of purchase, like hey I spend money and I just got this NAT 5 so it makes it seem
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Appendix D: Codebook
Code
More efficient Multiplayer focus
Limit myself to the things that are worth it Anticipation excitement
Social gambling get-together Investment in the game At the start
Spend a lot of time, support developer
No difference between purely ornamental and functional goods
User Generated Community Competition social influence Showoff rare character Aware of gambling Community Competition Progress
Fun to gamble in itself Social advice
social connections Premium not that worth it Rationalizing Purchase Consistent buying Motivate friends to play Lack of Social
Bursts of paying Not necessary to buy Where Played Experience
Unexpected getting something good Jokingly disappointment
Starter Pack
Strength of Characters Intellectual Purchase New additions to the game Waiting, creating anticipation Completing a collection Demographic
Rarity of character
Play in small bursts of time Bypassing restriction Able to see progress Time events
Only way to get it No new areas by paying Time Played
