The Freemium Paradox

Economic society is largely built upon the principle of resource management. Through this stream, we strive to divide our expenditure proportionally on our daily needs. However, if this rule were strictly followed, any discussion of finances would be void due to the apparent fluidity of all transactional affairs. This is, obviously, a utopia that we cannot hope for due to the numerous intangibles that rise, with one of the most daunting being the human emotion of happiness. 

Our minds have been trained to reward themselves over short-term gain, which largely hampers the strategy of the aforementioned “management”. One of the largest industries that contribute to this dopamine rush in modern society is the gaming industry, specifically mobile gaming. Mobile has the largest audience of gamers and revenue collection among all gaming sectors. This is majorly due to its ease of accessibility. There are billions of smartphone users all over the world. When bored, the ease of downloading a game applies to every age group, drastically increasing the rate of these games being present on one's phone. Juggernauts of this market, such as Candy Crush and Subway Surfers, target their customers due to their simplicity of gameplay, allowing for easy progression. But then, eventually, players would hit a wall. Either they run out of lives or they struggle to beat their high score. This brings up a flashpoint in mobile gaming that has run rampant throughout its history, that is microtransactions.

Till now, gaming has been a pastime, nothing but a way to reward oneself through unimportant yet joyful means. However, when the option for microtransactions comes up, a change appears. This is no longer a pass time if one is willing to pour their money into it. And then, the shift occurs. With this, a flood of serotonin has infiltrated the user. By now it is common to feel a sense of invincibility. This is until the next roadblock happens whether in the same game or an entirely different one. But now, it's different, one has already felt the sensation of spending money on a title, so what would be the harm in spending a bit more? The barrier of entry after each purchase decreases exponentially. Now, the microtransactions are not seen as small purchases that provide a slight edge in the gameplay, but rather as a necessity, as one has already come so far from the initial purchase that it would be foolish to quit while their ahead. This is where users fall off the deep end and become what is known as “whales” to the developers.

This ties back to the innate psychological concept of how we place value on certain goods. The first purchase is always going to be the hardest one to make, but as we do partake in it, the value that we assign to these transactions goes down. However, the standing price is still the same in the end. This can be enjoyed moderately but that often isn’t the case, as the threat of overspending looms over the collective minds of these whales where it finally registers in their minds once they have gone too far.