Study reveals free-to-play video games mimic gambling spending patterns

Digital media, including videogames, are a central part of leisure activities for many adolescents and adults. For more than a decade, the industry has increasingly relied on highly profitable financing models in which games can be played free of charge ('free-to-play' games), while additional purchases are offered through so-called microtransactions. As the industry repeatedly emphasizes, these purchases are voluntary. 

However, the term 'microtransaction' can be misleading. Individual purchases of €100 or more can hardly be considered small, especially for children and adolescents. For the average player more frequent and smaller payments may be more common, but focusing on the average player may conceal an important problem. 

The average player can hide the real problem 

Similarities between free-to-play models and gambling are not limited to the well-researched and gambling-like mechanism of buying loot boxes, where players buy a randomized selection of virtual items, the contents of which are unknown at the time of purchase. Battle passes, virtual currencies, rotating shops, paid progression, personalized offers, and time-limited events can encourage repeated spending.

Our study showed that spending on microtransactions is highly concentrated among a small minority of players. The highest-spending 10%, whom we simply called 'heavy spenders' - deliberately avoiding the gambling-derived term 'whales' - accounted for the majority of all money spent. The degree of inequality in spending, meaning that a small minority spent a lot of money while many players spent much less, was also remarkably similar to that found in gambling more generally. 

We also found that heavy spending was not limited to adolescents from affluent families, and the prevalence of problematic behaviors such as gaming disorder and gambling disorder appeared to be higher among heavy spenders. Like gambling, a substantial share of free-to-play games' revenue may be generated by individuals who are more likely to experience addictive behavior.

Gambling is subject to varying degrees of legal regulation because of the potential for harm. However, videogames are subject to much less stringent regulations. 

How could regulation help? 

Regulation should expand beyond gambling-like loot boxes alone. While political efforts are currently being made to regulate social media because of its potentially addictive features, videogames remain comparatively underregulated, aside from specific provisions within the Digital Services Act. Several European countries such as Belgium and the Netherlands have attempted to regulate individual mechanics, particularly loot boxes. Research suggests that these approaches have had limited success, but the current momentum surrounding the regulation of social media could also be used to address dark patterns in videogames - design features that manipulate or steer players towards choices that primarily benefit the game provider, including increased spending.

A particularly useful approach would be to introduce friction that interrupts the regularity and immediacy of purchases. In gambling research, event frequency - in this case, the frequency of microtransactions in games - is considered one of the strongest indicators of the addictive potential of a product. Similar principles should be considered when assessing monetization systems in digital games. 

Persistent addictive behavior and the associated spending is likely to be a problem that predominantly affects adults, and our study did not address this. Nevertheless, children and adolescents require greater protection. At present, responsibility for this protection is largely placed on parents and caregivers, who may struggle to help heavy spenders disengage, particularly when they are confronted with games that incorporate sophisticated design features intended to maximize player engagement and spending. Most young people use videogames competently and without experiencing serious problems, but a system should not be considered safe simply because many users experience no obvious harm. When a small minority of young players generates most of the revenue, that minority deserves particular protection.

Numbers alone suggest the free-to-play economy is not really free. The monetization of videogame playing is of increasing concern and vulnerable players need protection from potentially exploitative practices.