Tiny figure of a man sitting atop a small pile of golden coins.

In-game purchases are now very common among players of all ages. What most gamers probably don't realise is that video game companies use behavioural psychology to heavily stimulate their customers before they even decide to make an in-game purchase.

Mobile games played on phones and tablets, and in particular 'free-to-play' downloadable games, are currently leading the way in terms of monetisation. But how is it possible that a product that is free to download and play can, in fact, generate billions of euros in annual revenue? In-game purchases are the answer.

This new type of monetisation system in games has proved so successful that it is now used in virtually all types of video games.

Many studies have shown that the likelihood of in-game purchases has nothing to do with the time spent playing or the intensity of play. So what does this mean in everyday life? In practice, it means that video game addiction is not the only concern for players or their parents.

The majority of the world's population does not meet the criteria for addiction, but everyone who plays video games is prone to impulsive spending and this can be particularly evident in games.

What are in-game purchases?

In-game purchases are any paid transactions that take place within an app once it has been downloaded. In the games industry, these in-game purchases are called microtransactions. Not all the best games on the market include them, but more and more do. If you want to know more about these related to casino games, check Kasinokolikkopelit.com.

The name comes from the fact that the price of a single virtual item is often relatively low, but often bundled into a package of value. It may also be the case that, in order to progress significantly in the game, the game even requires you to buy items.

All categories of video games, from so-called free-to-play mobile apps to premium games costing, say, €70, now use microtransaction monetisation.

Microtransactions can easily amount to hundreds or even thousands of euros. Children and teenagers are more prone to in-game purchases because they do not have natural impulse control.

Why are they offered?

So how did microtransactions come about? Mobile game designers came up with these in-game purchases as a way to recover costs from a market that is hesitant to pay for mobile apps. Offering a game for free is a great way to attract new users, but also to monetise the game through in-app purchases once users are engaged with the game.

So by moving to in-game purchases, video game companies found that users were more willing to hand over their money than if they paid for the game at the download stage.

In practice, this is because by 'pushing' purchases on players at the right points in the game, our ability to reason and make intelligent decisions is impaired. When we are emotionally involved in the game, it is easier to start putting money into it.

What is the cost of in-game purchases?

The price of in-game purchases can be the same for everyone, or it can be optimised based on individual player user data. In that case, the price, timing and presentation are all targeted in a particular way.

For example, the system may offer you an in-game purchase when you have already placed a bet on it. The system can also match in-game purchase offers with known triggers for an individual player or known triggers for similar players.

Different ways of in-game purchases

As the mobile games industry has evolved, the ways in which in-game purchases are made have changed and continue to evolve with player preferences and industry updates.
  • Consumer goods. There are virtual items that you can buy and use only once. Examples of such products in gaming include hints, assets, in-app currency and extra lives.
  • Non-consumables. These items have no expiry date once purchased in-game and can be used repeatedly. Examples of non-consumable goods include upgrading a character or, say, unlocking a new level.
  • Auto-renewing subscriptions. These are a type of in-game purchase that charges the player repeatedly. Recurring subscriptions are typically recurring on a monthly basis and ensure the use of the app or premium features of the app.
  • Subscriptions that are not automatically renewed. These are paid subscriptions that last for a fixed period of time, such as a year. They require you to manually renew your subscription.