Some of the most popular apps and games on mobile devices are free to download, but in-game purchases may soon prove to be too tempting.
While the Consumer Electronics Association reports only 32 percent of consumers surveyed are willing pay for apps, those who do spend bring the national average to $39.40 a year per user on apps. One app, Clash of Clans, allows a player to build a large building over the course of 12 hours, but the time can be substantially reduced with the purchase of gems. Clash of Clans player Panda, in a Nov. 1, 2011 article from Wired, said he spent over $7,000 training his virtual troops.
Tracie Morrissey, in her July 4 Jezebel article, admitted to spending $494 acquiring “K stars” in the Kim Kardashian: Hollywood game.
Many games are played on a “freemium” model, where most content is offered for free. Upgrades, premium content and some shortcuts are available for in-game currency. Purchasing virtual money is easy, since the games use credit cards linked to accounts created in Android’s Google Play Store and Apple’s App Store, allowing the developers to make money without placing ads in their games. This may leave more screen space available for gameplay and gives developers more control of what appears in the app, but it may cause serious financial damage if players aren’t careful.
William Poundstone of Psychology Today compared the virtual currency, Linden Dollars, of the network simulation game Second Life, to tourists using money from a foreign country.
“Confronted with an unfamiliar currency, we all splurge and tip more freely than we would,” Poundstone said. “Once you buy Linden dollars, credits or other virtual currencies, you’re committed to spend. It’s difficult to convert virtual currencies back to real money, and nobody feels a pang of guilt about not squirreling Linden dollars away in a 401(k).”
While the currency may be designed to give players headaches, it is hard to find fault with the developers. They make a product in order to turn a profit. Fiat currencies are everywhere, like tickets for carnival rides or tokens for an arcade. This is simply the virtual version of the prize booth, where the actual monetary spending has been converted to something else with which you can earn prizes. It’s not a new trick, just the trick’s digital evolution, like the online equivalent of trying to win the biggest teddy bear.
One aspect overlooked by some players is that not everyone has to pay extravagant amounts.
“The top 10 percent of players can account for as much as 50 percent of all in-app purchase revenue,” said Andy Yang, CEO of PlayHaven (a company that researches mobile spending) in the November 2011 Wired article.
Called “whales,” these players are willing to invest exorbitant amounts of money and contribute substantially to the revenue model. This keeps the price down for more casual players. Without their money, prices for individual items within the game could go up and move the game out of a casual user’s price range. Spending $5 to upgrade your virtual farm every month won’t break the bank, but trying to compete with the most hardcore players will. Setting a budget in real dollars and staying within it, despite other players, can keep individuals from getting too obsessed with the high-paying players who may dominate the leaderboards.
Budgeting for apps and games can be overlooked when spending money on entertainment. This is the first generation to have this problem, meaning parents may not be the most reliable source of instruction. App payments are part of a larger technological economy that is comparatively new. Paying for upgrades is as valid a form of entertainment as paying for a movie ticket. They can enhance the experience for a price.They can’t be paid for in cash; receipts are emailed, leaving nothing tangible to remind someone of the money they spent. This can lead to serious debt that may affect the ability to pay other expenses such as rent and bills. Eventually, the overspending can damage credit or incur late charges.
Replacing the credit card in the payment options with a gift card seems to be the most convenient way to limit spur of the moment spending. For unintentional purchases or charges made by other people on a shared device, child locks and password protections can minimize the risks of overspending. Free apps like Mint can enable a user to track their spending on apps from the same device on which they play them. For players who find themselves unable to resist on a regular basis, therapy for compulsive spending may be an extreme solution.
By no means should we stop paying for games, even freemiums. They are a vital part of the casual gaming industry that brings in a heavy profit, which in turn allows for continued innovation and ultimately better games. However, no one will benefit if a player breaks the bank and can’t purchase or enjoy future games.
Like many games, knowing when to quit while you still have the cash is key. When the opportunity to upgrade one more time presents itself, the only real barrier between a player and an unpayable bill is their own force of will.
Logan Falletti is a senior in mass communication. Please send comments to email@example.com.