Tobold's Blog
Monday, June 17, 2019
Games and money

I spent €100 on a "Fort Know" special offer in World of Tanks this month, giving me 12,500 gold and 12.5 million credits. I used the gold and credits on a few projects I have, testing out crew books and playing through the Italian tech tree. And it struck me how this purchase was at the same time exaggerated and normal, being both expensive and cheap. And how that relates to the weird economy in which we live in.

Games in general are cheap. The price of a top of the line console or PC game hasn't change much over the last few decades, its still around 60€, no inflation adjustment. And between stores selling used console games and Steam sales on PC, you can often get those top games a bit later for half the price. Furthermore a game with the features and graphics of a decade ago would today be sold as an indie game for under €20, and there are some excellent cheap games around. In other words, €100 buys you a lot of game today.

However this pricing is somehow linked to an overproduction of games, and an outdated concept of games as being toys for children, which need low prices. The customers for games on the other hand are getting on average older, and with that often more affluent. €100 is a lot of money if you need it to pay rent, buy food, or get your washing machine repaired. However once you earn enough money to have no more problems paying for all of these necessities of life, the 100 Euros become "discretionary income" that might be spent on things like a nice dinner with your spouse. And if you look on what people spend their discretionary income on, €100 is not very much. There are a number of hobbies and sports in which €100 doesn't get you very far. If you wanted for example to take up skiing, buying the equipment and going on a ski holiday for a week once per year would set you back thousands, and you'd get a lot less hours of enjoyment out of it than from a computer game.

When I was young the idea that if I would study hard and work hard I would have a good chance at financial success was still very prevalent (and it sure worked out for me). The idea isn't all that popular anymore, and prospects for young people are not quite as good anymore. But if you add some additional constraints (e.g. study something useful, not whatever you like best), there is still a strong correlation between effort put in and reward gotten out of the economy. You can still work hard to become let's say an engineer and end up being among the 10% top earners in your country. Now of course the top earners pay more rent, maybe eat more expensive food, and drive more expensive cars. But overall the percentage of what you spend on the necessities of life goes down when your earnings go up, and that leaves an increasingly large part for that "discretionary income", which you can spend for the not-so-necessary stuff in life. Walk through a high-end shopping mall, and you'll see store after store filled with expensive stuff that nobody really needs, but which is nice to have if your interests are in this area and you can afford it. And we are not talking top 1% vs. bottom 99% here, already at the 50% line the mean US household has a discretionary income of several thousand dollars a year. It is just that the discretionary income goes up much faster than overall income, and so €100 represents very different things for people on different positions on the economic scale.

All this to say that I can drop €100 on virtual tanks without batting an eyelid, and I feel as if that isn't all that unusual. The very fact that various online games sell you something with a €100 price tag suggests that there are customers for these things. But I know that for other people the idea of spending €100 for some virtual stuff sounds absolutely preposterous. And I don't blame the game companies; they just adapt to this economy of inequality, where some people have to play for free because they are short of money at the end of the month, while others can spend €100 easily. If you wanted to change that, you would need to change the way that the capitalist economic system distributes the wealth it creates, and that wouldn't be a very easy task. Complaining about sparkling ponies in online games is just complaining about one minor symptom of the economy, the root causes go much deeper.

I am perfectly fine with whales who can put money into games, because -thanks to them- I can play for free and move to another game as soon as it becomes boring/repetitive. I am not a "competitive" player, meaning I'm more on the chilled/relaxed side of the gaming world. I'm 44 and I can play hundreds of titles without spending a cent. I don't spend real money because I very rarely commit to a single game long enough to justify an ingame payment. The only exception was World of Warcraft (until they added the Token, which made the game free for me and many others thanks to the whales/compulsive players, once again).

I also consider perfectly fine the "money over time" concept. If you have a decent salary and $100 is peanuts... Why not spending them for some random ingame currency? who cares. Problems arise when people can't control themselves and need to spend $100 to get virtual-shiny stuff. But that's another issue.
But you didn't buy a "sparkling pony," you bought progress. And the reason you bought progress is because you didn't want to spend the time playing the game to unlock what you wanted to unlock. And the reason you didn't want to spend the time playing the game is because (presumably) it would take too much of it to complete and/or it was a grind. And the reason it takes so much time is because the game developers calculated that if they made it take that long, they would get X amount of whales dropping $100 while everyone else grinds through it in misery.

You should absolutely blame the game developers for that. Capitalism in general may have encouraged this perversion of game design - bending it away from systems designed to be fun in of themselves, and instead towards extracting all Consumer Surplus - but fundamentally these game devs sat around a table and plotted how to make their game less fun to extract more money.
I don't have the statistical references I would need to stand this argument up, but based on my experience as a sixty-year old living and working in one of the most affluent cities in my country, talking to a fairly wide range of people of all ages and incomes as part of my job, I would say that, as a well-paid, well-educated professional you are very much an outlier as someone who also plays video games as their main leisure activity.

When you talk about the "outdated concept of games as being toys for children" I believe you are describing what is still the mainstream view, not only inside the industry but outside it. Statistics do support your contention that "customers for games on the other hand are getting on average older", but I'm not sure that necessarily means they are also "often more affluent". Well-off adults have, frankly, better things to spend their money on than video games, let alone virtual purchases within those games.

Game-playing is still very much seen as the province of the young, the uneducated and the unemployed. It's something that sportspeople can admit to - XBox and Playstation are frequently quoted as the default entertainment for sportsplayers in their downtime between performance and training, for example. "Poor" people (often a euphemism for working class people) are widely believed by the middle classes to spend much of their time playing (usually violent) video games buit I would be very surprised to hear a doctor, lawyer, architect, accountant or administrator admit to anything more than the most casual, occasional dabbling with either console or PC gaming. Mobile does have a less damaging social profile, perhaps.

Maybe it's different in Belgium but that's what I see in the UK. I've worked with people for a decade or more before they admitted they have an interest in gaming and even now, when it definitely is seen as less utterly weird as it once was, people are careful who they tell about their "habit".
Well, speaking of the UK, David Cameron when he was Prime Minister was reported of having played through all levels of Angry Birds, which is a considerable time investment. And he was neither young, uneducated, or unemployed at the time. As you said, at least mobile games have gone mainstream.

If I look at the people who stream World of Tanks, they also are usually above 30, and don't appear all that uneducated to me. I know Quickybaby has a Ph.D. in Geology. The impression I get from forums and chat is that the population of World of Tanks is generally older than that of let's say Fortnite.

Agreed on older, well-off people being careful about who they tell that they are playing games, but that doesn't mean that they aren't playing. And I would really be interested what those "better things to spend their money on than video games" are, because I don't consider a bag of golf clubs a better thing than a video game.
Anecdotally, I think those older, affluent professionals are definitely more selective about who they share their game-playing. Similarly, they may also just prefer to discuss other topics.

I'm a bit in a younger camp than Bhagpuss and Tobold (early thirties), but I have a graduate degree, and I'm a small business owner working in health, and very comfortably within the too 1% of income earners in my country. Most of mine and my wife's friends fall within the top 15% of income earners. All of my male, and the majority of my female friends play games of some sort. Most of my wife's unshared female friends don't, but every single one of their partners do. These are people who without exception have University degrees, and the vast majority have graduate degrees in fields that pay well.

That said, many of these individuals would balk at the idea of discussing their game playing with co-workers. For many of them, I had no idea that they played videogames until one of us visited the other's house and commented on a console. Certainly the amount of game-playing varies, but it's absolutely prevalent, particularly amongst those without children (a demographic that is growing substantially in my country). Even after we learned about our mutual game interests, we most typically discuss other topics of interest.

I think many of Tobold's conclusions in this post about game-playing are correct. Devs wouldn't make 100$ products if someone wasn't buying them. Like him, I'm someone for whom 100$ on a virtual game is comparable to a nice dinner with my wife (and frankly, our eating out budget for a year probably eclipses what I spend on videogames, even if you add in the costs of maintaining a high powered PC). This isn't unique to games though, it's just a function of games becoming more like all sorts of other hobbies. There are entry level budget purchases, but also much more substantial costs. But he is also right that games are cheap compared to many other hobbies, although I think that is slowly changing.
I have to disagree with Bhagpuss on this statement:

"Well-off adults have, frankly, better things to spend their money on than video games, let alone virtual purchases within those games."

They really don't. For well off adults, the cost of playing video games is trivial.

Sure, there are other things they spend money on that they might value more highly... but the cost of playing games falls into the noise floor for the average "well off adult."

As such, even if they're spending 100 Euros or whatever on it, it's the same as buying a coffee at the convenience store... no thought goes into it. Where the thought comes in is the time spent.

Wherein lies the rub! Sure, high paid professionals are going to WANT you to think they spend their time skydiving, mountain climbing, whatever... but no... that's unrealistic. They might spend 10% of their free time doing that.
There’s two main points here that I think are worth reiterating:

Different people value different things. Hence that discretionary income of 100 bucks of whatever currency may be prioritized as best spent and more “worth it” differently. For example, I wouldn’t blink an eye dropping a hundred dollars on a bundle of on-sale Steam games I’m interested in or a good dinner, but others may prefer to skip spending on those items and put the money towards travel to another country, or a club membership or whatever.

Then there’s what you’re actually spending it on in a computer game adding up to a wallet vote in favor of that particular brand of monetization. In some games, buying that currency with real money is paying for progress, or accelerated pace of progress. Or paying to bypass inconveniences. Or straight up paying for the numerical advantage to dominate others, ie. for power or to win. In other games, it may be paying for a premium supporter club membership/subscription, or for additional content or DLC. Or maybe just cosmetics that provide more eye candy. Either way, the developers are incentivized to skew games in particular ways based on the monetization strategy. For example, in cosmetic monetized games, your basic free costumes will usually look like crap or shades of brown and grey. If you want to sparkle, be on fire, or use black or white dyes, better pull out that wallet. Whether you’re OK with that kind of design and willing to support it, is up to you and what you value.
I still don't get the point of spending money to "boost" some aspect of the game: faster leveling, more loot, etc. When Diablo III introduced the real money aucion house the game became 100% trash. Because the entire point of Diablo is playing for hours until you get THAT lucky drop. If you spend $200 to buy a super-rare "Uber Axe" then where's the fun? 10 minutes later there will be another "Uber something" item that you would still need. And then the game gets and update and your Uber Axe becomes a $200 virtual piece of trash.
I am a similar age to Bhagpuss and while I remember the discrimination against gaming I personally think things have improved somewhat. I don't know however if this is me who has changed or if the world around me has changed. Perhaps a bit of both. Twenty years ago as a professional in my 30's trying to build a career and raise a family I did not talk freely about gamine even though it was my main hobby.I can still remember the few rare occasoins when I met someone of my own age who also played games and how it was almost a guilty pleasure. Today I have no qualms about telling others about my gaming while I don't ram it down peoples throats I am happy to discuss it with others. It is still relatively rare for people my age (mid fifties) to play games but I do think that it is now much more widely understood that adults play video games too. Of course getting older has also changed my own perspective. Over the years I have met all kinds of people with their own weird and wonderful hobbies so the fact that I play a few video games is hardly remarkable. Another benefit of age is that my career and home life are now relatively settled and secure. I am no longer constantly chasing the next promotion and we seem to have survived that frenetic period where every spare moment and every spare euro is spent on the kids. My wife and I now have noth time and a bit of spare money to spend on ourselves and I don't really care what other people think of our choices particularly people who want to criticise.

I'm inclined to believe that Azuriel is 100% on point.

I've personnaly read a document entitled "Mobile game design basics" which contained the following instructions for would-be game designer: your game must have a scarce resource, and its scarcity must go up as game progresses. While it's essential that this resource can be obtained for in-game actions, the quantity obtained for free must be insufficient for playing efficiently.

This concept was presented first, before any other design issues, since the authors sincerelly believed that this is the only way that mobile game can bring some earnings.
Lots of interesting feedback in the comments. I would definitely agree that owning your identity as an adult gamer is far less problematic and far more commonplace now than it was twenty, or even ten, years ago. I've been in my current job (or with my current employer, I should say) since the late 1990s and in the first decade and a half I don't believe I ever heard a single person at work mention playing video games.

The first I remember didn't actually happen until after we'd begun hosting Magic:The Gathering evenings. One of my colleagues who was running the events let slip that she'd raided in WoW. I'd worked with her for years and had no idea she gamed online, although I knew she played board games. After that there was a bit of a trickle of people outing themselves as fairly casual video gamers but it wasn't until maybe three or four years ago, when we began to get a new iinflux of twentysomethings that it became relatively common to hear people talking about gaming. And even then it was only among people under 35.

The most significant anecdotal change I can report is the newish (about two years now) store manager. She is a hardcore gamer and doesn't care who knows it. She was up until the early hours on release day for Destiny 2 and she's big into Fortnite. Her leisure time, which is limited because she's a workaholic who loves her job, is all about fragging people online. She is still very much an outlier in my experience, though.

When it comes to the customers I talk to, who generally fit a much older demographic in which fifty years old would count as "young", I see almost no evidence even of recognition that video games exist. We stock very little on games and very rarely get asked about what might be available. Mrs Bhagpuss, who deals with an entirely different demographic in her work, reports being treated as some kind of superhero by parents simply for being able to recognize the names of video games and have short conversations about them with teenage children.

All this is anecdotal evidence, of course,a nd we know what that's worth. In the wider cultural landscape, though, video gaming has been slow to penetrate and slower to gain respect. The Guardian and other "quality" newspapers have coverage these days that approximates their cioverage of other arts but there remains an apologetic tone to much of the writing, as though the door could be slammed at any moment, leaving gaming back on the outside of the cultural party. Almost always, when I hear anything about gaming on Radio 4, it is negative news (adiction, violence, social problems) and every adult discussing it behaves as if a) they personally never played a video game in their life b) never heard of another adult who did and c) are intellectually incapable of descending to the mental level of anyone who would.

I freely admit that this is all drawn from the heartland experience of the British Chattering Classes - the middle and upper middle - and also is heavily weighted towards those in the 45+ age range. I can also see that it's changing as far up as the 30somethings and I have little or no idea how it's playing among the other class demopgraphics or in the media aimed at them. The groups I was mentioning, however, the "professionals" and "culturals" are, by and large, squarely in the Middle and Upper Middle bracket so my comments there stand - for now.

I do think this will "age out" but I also think there's a non-trivial chance that what we now call "mobile gaming" will consume and devour most other kinds of gaming within a decade or two, leaving PC gaming as a deep niche and consoles as a specialism. Mobile gaming is already both mainstream and provided with its own set of cultural and class pointers, few of which relate to console or PC gaming.

Also - and separately because I broke the HTML character limit -

On the David Cameron Angry Birds story, never believe anything a British politician syas about his leisure activities. Gordon Brown once infamously claimed to like Arctic Monkeys! Cameron may or may not have finished Angry Birds but if he's telling you about it, it's because his handlers have decided it plays to a particular demographic he's trying to court and I feel safe to say that demographic won't have been middle-class professionals.
I still don't get the point of paying money to speed-up things and/or obtain ingame items "faster". Why? If the game is too slow and too boring for you, then move to something else. If leveling is grindy and slow, why even bothering to play the game?
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