Many do not understand, or even accept, the motivation for people to spend real money for virtual goods. Some are even more amazed at the success of virtual casinos, where players gamble but can never collect their winnings. They discount it as manipulation or irrational thinking by the consumer. In fact, purchasing virtual goods is a very rational behavior consistent with how people conduct other aspects of their life. Understanding this motivation will help you develop a game that better satisfies your customers’ needs.
Why people shop
Although some people shop because they need something (food, clothing, steak), yet there are many other reasons people shop. In a seminal piece from the Journal of Marketing entitled “Why People Shop?“, Edward Tauber wrote that the obvious answer (“to purchase something”) “can be a most deceptive one and reflects a marketing myopia.” Below are several reasons that Tauber hypothesizes drive shopping behavior, which do not reflect ending up with a physical good. These reasons can also drive monetization in a game:
- Diversion. Shopping can offer an opportunity for diversion from the routine of daily life and thus represents a form of recreation.
- Self-gratification. Different emotional states or moods help explain why someone goes shopping. They may shop when bored as a diversion or go in search of social contact when lonely. Sometimes people shop to cheer themselves up. In these cases, the shopping is motivated by the expected utility of the buying process rather than the expected utility of consuming.
- Learning about new trends. Products are intimately entwined in one’s daily activities and often serve as symbols reflecting attitudes and lifestyles.
- Sensory stimulation. Shopping and games provide many potential sensory benefits for players.
- Social experience outside the home unit. A shopping center (or a game) serves as a gathering place for people outside of the family. Shopping or playing a game allows people to interact with people they otherwise would not.
- Communication with other having a similar interest. Common interests are a major link in stimulating communication and association between individuals. People like to talk to others about their interests.
- Peer group attraction. The patronage of a store sometimes reflects a desire to be with one’s peer group or a reference group to which one aspires to belong.
Why people gamble
Not only do people shop for reasons other than a purchase, people gamble for reasons other than winning money. Casinos see three motivations for gambling, and only one is the desire to make money. According to Casino Management by Kathryn Hashimoto (the primary textbook on the casino industry), there are three categories of people who gamble:
- Economic. These are people who are in it for the money. Obviously, these are not the ones who will be drawn to our games, where you can’t pull out money.
- Symbolic. These are people whose motives for gambling are driven by risk taking, maintaining a symbolic sense of control over one’s destiny, and symbolically replacing love or sexual desire. The lives most people lead lack the opportunity for this action. Also, many opportunities for risk taking have been eliminated by technology. Gambling is a way to be tested, and the motivation is to voluntarily submit to risk and perform under pressure as a symbolic gesture of risk taking.
- Pleasure seeking. Some pursue gambling as a pleasure-seeking stance. People play for positive reinforcement, self-esteem enhancement and pure pleasure seeking or play.
Why people spy
I started my career at the CIA (nothing too exciting: I was an economist), and one of the most interesting facts I learned was that spies normally are not motivated by money (this fact is not classified). The most notable and notorious spies in the last 100 years spied for personal reasons. Kim Philby, the high-ranking member of British intelligence who was a Soviet double agent, spied because he was disillusioned. Robert Hanssen, whose actions were described by a US Dept of Justice’s commission as possibly the worst intelligence disaster in US history, spied because of arrogance.
What it means
The consistent theme is that people are motivated by factors other than just consumption. Anyone who has read this blog before knows that I am not some idealist progressive, but I am a student of consumer behavior and behavioral economics and realize motivations for all activities are very complex.
People are not stupid; they make rational decisions when monetizing in free-to-play games. They are also not being forced to do something against their will. They are satisfying a need or desire. As a game company, you need to help them fulfill this want.
The Business of Social Games and Casino 
Two interesting things about this post . First Lloyd I noticed that you point out the three basic necessitys of life as “food clothing and steak” Second I really thought that you were a “idealist progressive”….I am shattered and disillusioned.
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LOL (and I should of put steak first if it was in true ordered priority)
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Why is there a random paragraph about spying?
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It reinforces that a lot of behavior we assume is driven by money is driven by other factors
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