Game Economics

I read--years ago--an article/document/paper on the economics of the many games out there (like Candy Crush Saga or, my current addiction, Dark Galaxy).  It also dealt with the psychology of the users, and how those who do spend real money in these games do it.  The thing is that most users spend nothing, and quite a few will spend from $1 to $10, but then there are a handful that spend hundreds, and even thousands.  I am willing to purchase a game, but I won't spend anything in-game.  Still I do enjoy some of the free games, but I am occasionally mystified at why anyone would spend real money on them.  Take Dark Galaxy...

In the game you have weapons and ships that you supply allies and mercenaries.  You also have your personal stats (tactics, attributes), and when you battle and complete missions you do better or worse based on these.  If you want to be very powerful you will need to get 100 mercs, and 300 each special "LE" vehicles and weapons.  You will also need to max your tactics.  Mercs, LE items, and extra tactics points can be bought in game with artifacts (arts), and arts can be bought with real money.

But here's the thing: it takes a lot of artifacts to maximize, and artifacts aren't cheap.  $5 gets you 27 artifacts but that will only buy you 1 merc (25 arts).  LE items can cost less than 20 for weak ones on sale, but can also run to 60 arts (and those aren't the most powerful, just the best you can buy...you have to build the top ones).  There are some price breaks but not much ($10 gets you 60, $100 gets you 750).  One particular "Ultimate" LE ship requires 7 60 art ships to construct (ships which can be obtained in-game for the sufficiently dedicated and well equipped).  That would cost a minimum of $60 real dollars to obtain...1 LE ship, leaving 299 ships and 300 weapons to go.  Oh, and one really powerful ship doesn't make a huge difference.  Add to that 100 mercs which will require 2500 arts as they can't be obtained otherwise, and that would run $350.

Now there are in-game available artifacts.  A limited number from missions and extras from tournaments and bosses.  But that waters down the value of those artifacts.  If I can play the game occasionally and pick up a few hundred arts (which would cost $50 to buy) why would I purchase?  When it isn't hard to see how expensive using cash is why does anyone do it?  It's basically flushing money down the toilet.  It doesn't give much advantage unless you spend hundreds or thousands, and the game isn't nearly that entertaining.

I find most "free" games with in-game purchases to be similarly worthless.  You get so little for the $ you put in, that I feel ripped off for the people who do buy (and I know people do).  In most games the money you spend essentially buys you time: you don't have to wait for recharges or things to finish.  But for games like these, I appreciate the time.  It's a built in "you're done playing now" point; "go do something else" (like loading up another game).

Mostly, however, games like this seem to me to be further proof that we are not rational actors when it comes to how we spend money.  If we were then companies relying on in-game income like this would all be bankrupt.