MIT BIG Conference Recap Part Four: The Economy of Play

Last week TriplePoint attended the 3rd annual MIT Business in Gaming conference in Boston. This series will break down some of the biggest and best ideas into tasty, digestible morsels.

Why do some games get their hooks into players and keep them reaching for their wallet every month, or even every day? Gazillion founder (Lego Universe, Marvel Superhero Squad) and veteran MMO designer (LotR Online, D&D Online) Nik Davidson spoke on the economy of play, focusing on crucial but oft-overlooked principles of online game design. His central message was this: economically equivalent does not mean emotionally equivalent. For example, I’d be happy to get a $100 check in the mail, but my brain would dole out far more pleasure-inducing serotonin if I found a $50 bill two separate times. It doesn’t make logistical sense, but science says it’s true.

  • Always whales in the sea – Regardless of how expensive the highest priced (virtual) item is, someone will be willing to buy it, while more conservative spenders may be swayed to spend more than they originally intended by choosing the second- or third-costliest item. The best way to sell more $32 swordfish? Offer a $49 filet mignon.
  • Anchoring is key – Our brains like to categorize and catalog information efficiently. I know that most XBLA games are $15 today, even though two years ago they usually cost $10. So when a title goes on sale to $10 today, the great deal I’m getting is actually yesterday’s average, unremarkable deal. This occurs often, and it occurs subconsciously; Davidson noted a massive spike in Xbox sales when the price of the console was reduced to $349, a figure smaller than the 360 in the system’s title. The number of consoles sold bested the predicted number resulting from a $50 price break. “I’m getting 360 things for only 349 other things?  Sold!”
  • Hazy value – Microsoft, in a move that echoes Walt’s Disney Dollars, cleverly obfuscates the value of their virtual currency. With an exchange rate of 80 points per dollar, our minds cannot readily determine the actual cost of a download. In the same way casinos require the use of chips, if it doesn’t look like money, I won’t treat it as carefully as money.
  • Paying feels good – We derive utility from spending in online games just like we do in real life. But in MMOs, we can buy items that deliver the instant gratification of accelerating your progression. At school or work, there’s nothing we can trade in for a level-up promotion, but in free-to-play games (F2P), impatience and a few bucks let us leapfrog ahead.
  • Workin’ for the weekend – Americans show a very strong flat rate bias; if given an option, we will choose the all-you-can-eat subscription option for our cable TV, our cell phones and our MMOs. Not so in Southeast Asia, where pay-per-text message and the microtransaction nickel and diming of F2P games are widely embraced. It’s been shown that Americans have an aversion to being “on the clock.” Price schemes like those of taxi cabs make us anxious because they’re reminiscent of our daily grind at school or the office.

Human beings behave in a predictably irrational manner. If online game developers use intelligent, metrics-driven designs in their games, they can avoid user fatigue and their biggest enemy of all: churn.

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