tl;dr: a comparison of gaming spending compared to other hobbies
- Valuing entertainment is subjective, but we can compare costs nevertheless
- Whale spending in gaming is comparable to spending in other expensive hobbies
- Players have agency to choose how they spend, but aggressive psychological tactics still underline a gap in fairness.
Previous blog in this series:
It's not just the sound of capturing a rare Pokémon or the exclamation after a successful play in a card game. For many gamers, it's also the realization of having spent hundreds, if not thousands, on in-game purchases. From exclusive skins to character unlocks, many of us have been enticed to part with our money in pursuit of digital treasures. And while my previous articles dissected the lure of in-app purchases from a developer's perspective and the ethical issues surrounding them, there's another voice in this discourse that's equally vital — the players themselves.
Players often find themselves wrestling with justifications for the vast sums they pour into their favourite games. Are these justifications mere post-purchase rationalizations? Or do they highlight a deeper bond between the player and the virtual realm? By peeling back the layers of a gamer's psyche, we aim to understand not just the "how," but the "why" behind the allure of in-game spending.
A brief trip down memory lane
In my earliest gaming days, I juggled myriad games copied onto floppy disks (a nod to the 5 1/4" and 3 1/2" days). Some of these games were genuine shareware, while others… not so much. I did purchase many games over the years too, or given for my birthday (e.g. Commander Keen for my 7th birthday).
The late 90s and early 00s saw another era of downloading ‘warez’ (iykyk). Over the past three decades, I’ve seen my gaming habits evolve, paying for numerous titles, subscribing to online games, and amassing a digital library on platforms like Steam and GoG.
Around a decade ago, my journey took a notable turn. I backed Shroud of the Avatar on Kickstarter (by Richard Garriott, the revered creator of the Ultima series), lured by the promise of a house and land that I could later sell — a pledge of real ownership. But promises can be fleeting, as I discovered when the game’s fundamental ownership principles shifted, rendering my investment worthless. This experience became a cornerstone of my belief in games that uphold stringent ownership values.
Yet, as recent times tethered me more to my home, the siren call of mobile gaming — a domain notorious for its pay-to-win titles — grew louder. I succumbed, both playing and paying, thus adding another layer to my extensive experience with various gaming revenue models.
Now, with this backdrop, I aim to peel back the layers of a gamer’s psyche. Let’s understand not just the “how,” but the “why” behind the allure of in-game spending from a player’s viewpoint.
The Relative Value of Digital Pleasures
How can one justify high-level spending in gaming? The reasons span a spectrum from the emotional connection forged with a game to the camaraderie experienced with friends and even strangers from across the globe. Often, it’s the convenience that loosens our purse strings. Each of these reasons carries weight and forms the foundation of why we are so engrossed in the virtual world. But a deeper dive reveals another facet — the economic dimension.
I’ll be candid: I’ve occasionally splurged on in-game items or perks out of sheer impulse. Whether it was a tantalizing deal flashing on the screen or a perceived chance at making an ‘investment,’ I didn’t always run the numbers. But here’s the catch — it was a calculated risk, one that didn’t involve sinking into debt. While treating games as investments is a murky territory, approaching it from a lifestyle standpoint can shed light on our spending habits.
Let’s embark on this journey by diving into the concept of cost-per-hour and juxtaposing gaming expenditures with other leisure pursuits.
Gaming vs. Other Leisure Activities: A Cost Comparison
When assessing the value of our spending on in-game purchases, it’s beneficial to compare it with other forms of entertainment or activities that people typically invest in. Here’s a rough breakdown:
- Monthly cost: $10-$15 for a standard movie ticket. Let’s assume one visits the cinema twice a month. Approximate cost is then $20-$30 per month.
- Entertainment Hours: Assuming a person watches one 2-hour movie per week, they get about 8 hours of entertainment a month.
- Monthly cost: Gym memberships can vary widely, but let’s consider a mid-range gym that costs around $50 per month.
- Entertainment Hours: This is trickier since it’s both a form of entertainment and exercise. Assuming a person goes to the gym for 1 hour, 3 times a week, they get about 12 hours of “entertainment” a month.
3. Golf Membership:
- Monthly cost: Depending on the location and exclusivity, monthly dues can range from $100 to $500 or even more for premier clubs. For our comparison, let’s assume a more accessible club at $150 per month.
- Entertainment Hours: If a player plays once a week, and a round takes about 4 hours, they get about 16 hours of entertainment a month.
4. In-App Purchases (IAP) in Gaming:
- Monthly cost: Regular gamers might spend anywhere from $5 on a small cosmetic item to $50 for a larger in-game package or pass. Assuming a mix of purchases, one might spend $25 per month easily.
- Entertainment Hours: This varies, but let’s say 1 hour per day over 30 days, a player gets 30 hours of entertainment a month.
Comparison of Monthly Expenditure:
- Cinema: $30 / 8 is $3.75 per hour of entertainment.
- Gym: $50 / 12 is $4.17 per hour of entertainment.
- Golf: $150 / 16 is $9.38 per hour of entertainment.
- Gaming: $25 / 30 is $0.83 per hour of entertainment.
While these calculations provide a ballpark figure, there are several nuances to consider. For one, gamers might find themselves engrossed in their favourite titles for hours on end, which would skew the average cost downward.
On the flip side, many gym-goers or golf enthusiasts might pay for memberships but not use them as frequently as they’d intended, driving their hourly rate up. When seen through this lens, gaming, even when accounting for IAPs, offers a competitive rate of cost per entertainment hour. But when you push the monthly gaming expense to $250, the value per hour is in the ballpark of golf, albeit without the weather-related inconsistencies affecting playtime.
However, this equation changes significantly when we venture into the realm of ‘whales’ — players who spend substantially more than the average gamer. Their expenditure can dwarf the combined expenses of all the above activities, but what drives them? Let’s delve deeper.
High Rollers: Whales in Gaming vs. Traditional Luxuries
In every industry, there’s a subset of enthusiasts who spend extravagantly, driven by passion, prestige, or the pursuit of a unique experience. In the world of gaming, these individuals are colloquially termed as ‘whales.’ These high spenders often baffle the average player with the astronomical sums they’re willing to part with. Yet, when juxtaposed with traditional luxurious hobbies, how does the spending of a gaming whale measure up?
- Golf at an Exclusive Club: While we previously considered a standard round of golf, joining an exclusive golf club can be much pricier. Membership fees at luxury golf courses can run upwards of $20,000 annually, not including monthly dues and incidental costs. This doesn’t even account for high-end equipment and travel to exotic golf resorts.
- Boating/Yachting: Owning a yacht or a boat is no small financial feat. While the initial purchase can run from thousands to millions, maintenance, docking fees, fuel, and crew (for larger vessels) can also cost thousands monthly. Let’s say you spend $100,000 on a boat, and you have annual costs of $10,000 for maintenance, docking, and fuel. That doesn’t count the actual cost of the boat spread over its lifetime. Obviously yachts can be valued well into millions of dollars.
- Horse Riding: Keeping a horse is a luxurious hobby. Beyond the initial purchase of the horse, which can range from $5,000 for a standard breed to hundreds of thousands for competition-grade animals, there are ongoing costs. Boarding, feeding, training, vet bills, and competition fees can easily run $15,000 or more annually.
Comparing these to a gaming whale who might spend $10,000 annually (about $833 a month), it’s evident that while the expenditure is significant, it’s still less than many traditional high-end hobbies. While $10,000 is a lot for most people to be spent on gaming, it isn’t deep into whale territory. Some people can spend upwards of $10,000 per month.
Match Group CEO spent $50,000 on ‘Clash of Clans’ in 3 months: ‘I still look back at that with lots of shame’
One big factor against gaming comes from comparing the tangible versus intangible benefits. While a gamer might own a rare in-game item, a golfer, boater, or equestrian has a physical asset, which in some cases might appreciate or at least hold value. Membership fees are “lost”, they are never recovered. Games will notionally “own” an item that stays alive in the game, but no real ownership beyond that. Not in the same way as owning a set of golf clubs, a horse, or a yacht. A gaming computer will only lose value over time.
However, from a sheer entertainment and enjoyment perspective, the emotional and social value derived from each activity is personal and subjective. What might seem an extravagant expense in one hobby could be seen as reasonable in another, depending on the individual’s passion and priorities.
The Balance of Power and Player Agency
When we peel back the layers and dive into the economics of leisure, gaming’s financial footprint starts to paint a clearer picture. Placing gaming alongside traditional pastimes like going to the cinema or gym, or even the more opulent endeavours such as golf or yachting, an intriguing perspective emerges.
Gaming, even with its high-end spending brackets, often delivers more hours of entertainment per dollar than a cinema ticket or even a session at the golf course. Players who invest in digital realms get immersive experiences that can span hundreds of hours, whereas the avid golfer might only have a few hours a week on the greens, and the cinema-goer gets a mere couple of hours for their ticket.
Yachting and horse riding, while luxurious and undeniably captivating, come with their own set of hefty costs and barriers. In contrast, the virtual worlds of gaming remain accessible to many, regardless of socio-economic standing.
That said, each activity carries its own unique charm and intrinsic value. The tranquillity of a golf course, the shared laughter in a cinema, or the thrill of riding horses is necessarily different to the exhilaration of a gaming victory. Each pastime fulfils a distinct emotional or experiential need, and the costs associated reflect those experiences.
As we traverse the landscape of modern entertainment, it’s essential to contextualize our expenses. In doing so, we can appreciate gaming not as a mere alternative but as a genuine contender in the panorama of recreational activities, offering both depth of experience and value for money.
It would seem that the amount spent in gaming would be in-line with other activities, and yet one cannot shake the fact that the gaming industry leans heavily on potent psychological strategies to encourage spending and foster addictive behaviours. The power is more firmly on the develop side, which I why I believe there is a “fairness gap”.
Perhaps the same can be said of Golf to some extent when it comes to equipment. Players are sold on the story of magical equipment that improves your game, but perhaps not as much as just putting in the hours would help. The degree to which addiction is “exploited” seems less apparent in golf.
Despite the potential justification for high spending when contrasted with high-end hobbies, there’s a compelling case for enhancing ownership within gaming. Providing players with a sense of equity and tangible ownership can fuel a more expansive in-game economy. I believe this not only promotes additional spending but also attracts a broader player base. It’s about creating a situation where everyone benefits, akin to “growing the pie,” as Paul Graham aptly puts it.
Thanks to ChatGPT for the debates and copy-editing this piece. Ultimately, I do the final editing.
The Midjourney image took a lot of revisions. 😅