Chasing the Whale: Examining the ethics of free-to-play gamesBy Mike Rose
This story is being highlighted as one of Gamasutra's best stories of 2013.
"I'd use birthday money, I'd eat cheaper lunches, I'd ask my wife to pay for dinner so I'd have a spare $10-$20 to spend in the store. Which does mean, I guess, that I was thinking about it even away from the game."
Chris was in his mid-20s when he began spending a few dollars here and there on Team Fortress 2. All of his friends had recently moved out of town, and his wife was now working a nighttime job, leading him to take solace in an online TF2 community.
At first he'd simply buy some TF2 "keys", use them to open some item crates, then dish some of the contents out to players online and keep the good stuff for himself. He enjoyed the social interactions that came with these giveaways, and it seemed worth it for the money he was paying.
But soon Chris discovered his first "unusual" item, marked with a purple seal. "I had this unbeatable rush of adulation and excitement," he says. "For someone who didn't get out much I was on cloud nine. And at that point things changed -- I started chasing that high."
For around six months following this discovery, Chris found himself draining his bank account until he didn't have a spare dollar to his name -- all for a selection of pixels that would hopefully be wrapped in a purple glow.
"My savings got wiped out pretty quickly -- although it should be noted that at the time I didn't have much put away to begin with," he explains. "The real trouble wasn't that it cleaned out my bank account, but that it put me in a really delicate situation. With no savings and every dollar not spent on food, shelter, or utilities going to digital hats, any unexpected expense became a really big deal."
Chris even had a few health scares along the way, and found that he couldn't afford to pay the medical bills because his savings account had been stripped for TF2 money.
"It got so bad that at one point Steam actually blocked my credit card, thinking I was some sort of account scammer, and I had to open a support ticket to tell them, 'No, that really is me spending whatever savings I have on this stupid game with fake hats.'" he says. "And like any addicted user, my social element didn't help -- most of my outside-of-work contacts were people I just played TF2 with. At work I just wanted to be uncrating things, and when I was uncrating things I just wanted to see better results."
It was when his out-of-control spending began to have an effect on his relationship with his wife, that Chris finally realized that this needed to stop.
"I've never really been addicted to anything else, so I can't say for certain whether a 'real' addiction would be stronger," he notes. "I would say that it felt akin to what I'd expect a compulsive gambling addiction would feel like -- social pressures reinforced a behavior that kept me searching for an adrenaline rush I'd never be able to recapture, even as it kept me from making progress in life."
"There were nights where I'd be up until 3 am drinking beer and playing Team Fortress and chasing those silly hats with purple text, ignoring the gambler's fallacy and swearing that if I dropped another $50 I'd be sure to win this time," he adds. "Then I'd wake up the next morning and see that I'd not only spent over a hundred dollars on digital hats, but failed my only objective by uncrating a bunch of junk."
Those were the mornings that felt the worst -- when the reality of what Chris was doing hit home the hardest. He'd feel hugely depressed and worthless, and swear to himself that he wouldn't be back again... and yet, the moment another paycheck came through, it was gone as quickly as it came.
Chris' behavior during this time is how people in the video game industry would describe a "whale"-- someone who spends large amounts on free-to-play games, and essentially makes the business model viable by balancing out the 99 percent of players who don't ever fork out a dime.
And while Chris is happy to admit that a portion of his addiction was no doubt down to his own silly mistakes, he reasons, "I have to question whether a business model built on exploiting 'whales' like me isn't somewhat to blame. Free-to-play games aren't after everyone for a few dollars -- they're after weak people in vulnerable states for hundreds, if not thousands."
Whales in the woodwork
This exact musing is why I recently began tracking down free-to-play "whales" to hear their stories. I found myself questioning just how many free-to-play game developers are building their games around the concept of pulling vulnerable players in, and rendering them addicted to some banal yet compelling activity that they feel they must spend large portions of their money on.
In particular, I pondered whether these "whale" players are fully consenting to the hundreds and thousands of dollars that they are spending, or whether they are being manipulated and exploited by underhanded design that purposely aims to make the player feel like they simply have no choice.
That's why I began trawling game forums and social media over the last couple of months, asking players how much they spent on free-to-play games, and why they chose to do so.
It must be noted at this point that a good portion of the "whale" correspondence I received was from players who felt that, despite spending in the thousands, they had got their money's worth. To many players, they had simply spent a lot of money because they were having lots of fun, and felt that they were happy to throw cash at the developer.
Other players also told me that they loved the free-to-play model, and that if they ever did feel like they were spending too much on these games, they could easily stop any time they wanted. There are plenty of happy free-to-play customers out there, and the aforementioned story from Chris only makes up a very tiny portion of the tales I received.
But it could be argued that to focus on the ratio of exploited to non-exploited customers is to completely miss the point -- that a business model where even the smallest portion of players can find themselves losing control and essentially ruining their lives, is a model that must surely face scrutiny, whether on a industry or governmental level.
Although Team Fortress 2 was brought up by many of my "whale" respondents as a real killer, Valve's team-based shooter was far from the only title named.
Kyle describes PlanetSide 2 as his "danger game," thanks to the financial situations his obsession with the game put him in.
"I'm in a position where I'm living paycheck to paycheck for the moment as the result of that spending -- beyond incurring overdraft for my rent (for a few months in a row starting in January this year and a couple other scattered times)," he says.
"There were a few times I found I ran short for food budget and had to eat ramen for a week instead of something decent," he adds.
He says that the feeling of instant gratification, allowing him to purchase weapons and cosmetic items with a couple of clicks, is what lead him to spend in the hundreds.
"You know you're getting your stuff right there on the spot, and you can do whatever you want with it right away," he says, adding, "I don't think I ever found myself in a position where I said 'I really need to have this one thing, even though it will put me over for rent' -- it was more a case of deciding I could ride out the consequences and that a mild amount of hardship might even make me appreciate what I obtained even more."
Kyle doesn't regret his PlanetSide 2 spending, however: "I never thought of the items as investments, more like disposable entertainment, like movie tickets or a night at a nice restaurant, because when it comes to free-to-play, who knows if the game is going to be around in six months or a year?"
He adds, "Now that I think about it a bit, it's almost a way for me personally to feel a bit richer than I really am. I might have an older car and a bit of a run down apartment, but online I've got all this nice swag that lots of people aren't willing to spend on. It's a nice way to make yourself feel special."
Heroes of spending
Battlefield Heroes was another free-to-play game brought up on my journey to find big spenders. Unlike Kyle, John hugely regrets his free-to-play spending -- he was working a part-time job at the time that he became addicted to Heroes, and he ended up splashing out the majority of his paychecks on the game, spending over $2,000 in total.
"I would call it the creme of the crop in terms of pay-to-win," he says.
My research didn't just focus on triple-A PC games either -- many of Nexon's free-to-play titles came up numerous times. One player told me that he has spent around $3,000 on MapleStory, including dropping a whole $500 in an attempt to create a single weapon in the game. But he says that he is easily one of the lower-end players, and that he regularly talks to people who have spent upwards of $10,000 on the game.
"It's pretty much for more numbers, if I had a gun put to my head," he says -- and he's not done yet. "The gear grind is pretty much infinite, and the only reason I'm not playing right now isn't because of the money, but because I'm waiting for the level expansion as well as a raised damage cap, which are out in the Korean server but not the global one."
Another player I talked to found themselves spending more than $5,000 on a Nexon game called Mabinogi, mainly on cosmetic items. "There were plenty of times when the rent would go unpaid because I had spent the money on the game instead," he says. "However, I don't know if I can blame the game for that. If I hadn't spent the money on Mabinogi, I would have spent it on something else."
"I can't say I really regret the spending," he says. "I loved the game, and I still miss the friends I played with. Five or six grand isn't too much to pay for the amount of happiness I got out of it."
However, he admits that it definitely felt like an addiction. "Both buying the points, and gambling those points on random drops would give me a rush," he says.
I also came across numerous far more outlandish stories. One player, who called himself Gladoscc, told me that he used to play a web-based MMO called eRepublik, in which players waged wars against each other.
In total, Gladoscc spent more than $30,000 on the game. "The geniusly evil part about eRepublik is that you have to spend money in order to neutralize the enemy's money," he says. "It's spreadsheet PVP, though. The social aspect is what kept me in."
When he managed to finally kick the habit, a random stranger added him veryon Skype weeks later, only to discover that it was the creator of eRepublik. He had hunted down Gladoscc's details so he could ask him why he had quit, and try to entice him back.
By far the worst story I discovered was that of a mother who became addicted to Mafia Wars on Facebook, and ended up sinking tens of thousands of dollars into it. As her obsession grew, she began to withdraw into the game and care little about the life going on around her.
"The last time I can remember going over, her entire room was filled with just hundreds of pizza boxes and McDonalds bags," says an old friend of her son. "When you enter the house, the smell just smacks you in the face, even though she basically just stays in her room."
The friend even alleges that as a direct result of the mother succumbing to the allure of spending more and more on the game, her son ended up dealing drugs simply so he could afford to keep payments up on the house and keep food on the table.
I also received messages from people who claimed to be ex-employees at free-to-play companies, and who told me that their respective employers would often build games purposely to entrap these "whales."
One such response in particular (for which I was able to verify the respondent as having worked at the company he named) gave a stark picture of what's going on behind the scenes. I've chosen to blank out the name of the company as I see this as being able to apply to multiple game studios, rather than just the one discussed.
"I used to work at [company], and it paid well and advanced my career," the person told me. "But I recognize that [company]'s games cause great harm to people's lives. They are designed for addiction. [company] chooses what to add to their games based on metrics that maximize players' investments of time and money. [company]'s games find and exploit the right people, and then suck everything they can out of them, without giving much in return. It's not hard to see the parallels to the tobacco industry.
This employee chose to leave the company as a direct result of feeling dishonest due to the work being done -- feeling like they were making the lives of a select few players worse.
"The creation of addiction-driven games needs to stop, for the sake of everyone those games take advantage of," they continued. "If companies like [that company] refuse to change how they conduct business, then the problem will only be solved if they go out of business. While it is unfortunate that people are losing their jobs, that may be a necessary, painful step in ridding the world of one of the harmful aspects of gaming."
I showed the stories I had found to the employee, who found them upsetting. "When people play games, they are entrusting the developers with their time and money," they told me. "As developers, we have a responsibility to make sure that we give them something equally valuable in return."
The ex-employee says that it all comes down to one main point: "Enabling self-destructive behavior is wrong."
"It's wrong when the tobacco and gambling industries do it, and it's a shame that portions of the game industry do it too," they added.
Despite this, the former free-to-play employee says that they don't believe government regulation would be a good way to fix the issue. As they point, some of the mechanics utilized in these games are used elsewhere in a more positive way, "so regulation could cause collateral damage across the games industry."
They added, "Based on their track record, I certainly don't trust Congress to pass responsible legislation dealing with video games."
And yet, the trouble still remains: The free-to-play model has been proven to work best when games find and exploit whales.
"Any [free-to-play] game that makes it virtually impossible to advance beyond a certain point without spending money was almost certainly designed with whales in mind," the employee notes. "Games that allow players to advance to the highest level without spending anything are less exploitative. At least they don't actively encourage addiction."
Now that my source is out of the free-to-play space, they are happy to be making games that don't exploit players anymore. "I'm now working on serious games, which have the potential to produce a substantial, positive effect on the world," they tell me. "I'm sorry for what I've done, but I promise to more than make up for it in the future."
Free-to-play developers speak
It's clear, then, that while a large portion of free-to-play consumers are able to take business model in stride, there are also those whose lives are being strained and, in some cases, even ruined by a number of these games. With this in mind, I took the commentary I had found straight to the developers, to gauge what exactly is going on, and why these people are spending as much as they do.
Battlefield Heroes is an instructive example of a developer moving toward an emphasis on incentivizing players to pay. When the game originally launched, it was a true free-to-play game. Players could jump into the game, sample everything it had to offer, grind a bit to unlock specific elements, but generally get plenty of enjoyment out of it for free.
Unfortunately, the amount of money coming in wasn't good enough to keep the game afloat, and so a large-scale price restructuring was developed, as detailed in this article. With this in place, players were now a lot more restricted in what they could see and do, and had far more grinding to go through to unlock items -- unless, of course, they chose to pay real money.
Ben Cousins was the senior producer on Battlefield Heroes back at the time when John (whose story is told above) found himself addicted to the game. Cousins now works on free-to-play games for DeNA, and is an outspoken proponent of the free-to-play model.
Upon reading John's story, Cousins remarked that numerous Heroes players were upset when the price restructuring occurred within the game. This led to lots of negative comments on the official forums, and stories such as John's.
However, Cousins notes that the restructuring led to an influx of revenue, it had the effect of safeguarding of many jobs on the Heroes team. Essentially, by forcing players to grind just that little bit more for items in the game, and by introducing weapons that gave paying players an advantage, the development team at EA caused an uproar among fans -- yet suddenly its long-term revenue was assured, as many of these very same players stuck around and submitted to the new pricing regime.
"I believe that the responsibility to control spending on any product or service lies with the consumer, unless there is some scientifically proven link to addiction as is the case with products and services like alcohol and gambling," Cousins tells me. "When these links are established, I feel industries should self-govern first and if they fail to act responsibly, be subject to governmental control."
He adds that there is currently no proven link between free-to-play "whales" and addiction. "I would personally like to see wide-ranging independent studies done before we jump to any conclusions about any negative psychological effects."
Cousins is also keen to stress that the overly negative responses that I received may well only represent a very small proportion of "whales."
"When looking at a small sample size there is always going to be a lack of certainty in extrapolating that data to a larger population," he says. "I think if we see a broad proportion of the spending userbase reacting as they claim to have in these accounts, it's easier to read this as the developers having discovered a damaging method of psychological consumer manipulation."
"When a very, very small proportion of the userbase react in this manner, while sad, it's easier to read this as perhaps individual issues with those people which may be expressed in any number of negative ways, not just with spending in free-to-play games. I'm sure small numbers of very negative stories could be found for spending on almost any product or service."
He clarifies: "I'm not suggesting either is true, just that we would need to do a broader set of data gathering before I'm comfortable reaching any conclusions."
I ask Cousins what systems his team at DeNA has in place to reduce the number of players who can potentially be exploited in its free-to-play games.
"The systems we have in place are simply our own moral judgment as a team of game developers," he answers. "We regularly reject ideas out of hand because we feel they are potentially exploitative. I suggest other developers do the same, but individual games are unique and there are no hard-and-fast rules."
An industry source at one major social game company told me that the stories I received are "pretty extreme, and definitely not the norm."
The source noted that game companies are already subject to a number of regulations -- consumer protection laws that require companies to treat players fairly. Citing the stories I received, the source said, "We wouldn't want our players to be playing like this, because it's just not fun, and it's not what the purpose of our games is."
"Our games are made so that you have short play sessions," the source added. "Our games aren't meant for these long play sessions where" -- the source references the story of the mother playing Mafia Wars -- "those are not what [our] games are about."
The source said the company's game sessions are short -- about 10 minutes for some of its most popular games. The company purposely makes game sessions short, such that players will connect with others, the source said. Like most free-to-play businesses, very low percentages of customers pay any money at all.
I also got in contact with other free-to-play developers, including those mentioned in the stories I received. Nexon's North American director of PR, Mike Crouch, appeared to be interested in providing me with answers, but after weeks of correspondence went quiet on the topic.
Meanwhile, Valve's Doug Lombardi chose not to respond to my multiple requests for comment, even though he did get back to me on an unrelated topic in the meanwhile.
And while it at first appeared that Sony Online Entertainment might talk to me about PlanetSide 2, I was eventually told that the company wasn't interested in responding.
For the greater good
Not every free-to-play studio is gunning for the "whales." While I was conducting my research, World of Tanks developer Wargaming.net revealed to Gamasutra that it is changing up its free-to-play strategy, removing all "pay-to-win" options and making sure that players cannot pay money to gain an advantage in battle.
"We don't want to nickel and dime our players," Wargaming.net's VP of publishing Andrei Yarantsau told us. "We want to deliver gaming experiences and services that are based on the fair treatment of our players, whether they spend money in-game or not."
"Free-to-play games have the challenge of being sometimes viewed as low quality, and we want World of Tanks to serve as proof that a quality and balanced free-to-play game is possible," he added.
Wargaming.net isn't the only company that feels this way. Hi-Rez Studios has released a string of free-to-play titles, including Global Agenda and the more widely acclaimed Tribes: Ascend.
Both are notable in that players are very accepting of these versions of "free-to-play": You can download the game for free, and then play for as long as you want, with no advantages given to those people who choose to purchase vanity items and the like.
Todd Harris, COO at Hi-Rez, tells me that his company's free-to-play philosophy is simple: Players will remember which games and companies are exploitative, and gradually over time, we'll see a shift away from these money-grabbers, to the games that treat the players with respect.
"The players in the stories [you've related] are likely to not play a game from that publisher or developer again," he reasons. "Our perspective is a long-term thing, thinking about the studio brand."
"I think there's cases where it financially works in the short-term for that title," he continues. "In our case, our studio brand and positioning is different, and we are particularly looking for gamers that expect a fair battlefield, and we want them to know that in a future Hi-Rez game, from past experiences, that they should get a fair battlefield and not get an exploitive feeling."
While you might guess that Hi-Rez doesn't make as much money as some of these more exploitative studios, it's notable that around 10 percent of Tribes: Ascend players choose to pay money -- a figure that is much larger than the 1, 3, and 5 percents that I've heard from the majority of other free-to-play developers. Harris reasons that this is down to trust, and players feeling like they are getting their money's worth.
"I don't have a crystal ball, but our studio thinks that there are enough players that want more of a sports-like fair game," he says. "That's the type of titles that we are developing. Whether the audience of the other type -- 'pay for status' -- whether that is growing or shrinking... you know, studios have to place their bets."
"I personally think that it's going to go down over time," he adds, "because if you look at the games that are having the most success -- League of Legends, Dota 2, as well as our own titles -- they are not perceived that way, not perceived to be pay-to-win as much. So those games seem to be having more traction."
I asked Harris whether he would advise other free-to-play studios to consider taking the approach that both Hi-Rez and Wargaming.net are currently running with. His response was simply, "Better late than never."
Harris is also of the view that government regulation would not be a good idea -- in fact, he describes it as "the last thing gaming needs."
"But game journalists and reviewers could play a valuable role -- in reporting how 'exploitive' specific titles are or are not," he says. "I don't think a game critic's rating of 'Graphics Quality' or 'Audio Quality' is all that important anymore -- now that so many games are free-to-play, people can try for themselves. And even with buy-to-play, potential buyers can see graphics and gameplay on YouTube or via live streaming."
"But 'exploitive mechanics' could be harder to detect in a single 'Let's Play' video, so game critics could help a lot in that area," he adds.
Research in the field
Dr. Mark D. Griffiths is a psychologist and director of the International Gaming Research Unit in the psychology department at Nottingham Trent University. The professor is well known for his research in the field of video game addiction and gambling.
Griffiths published a paper last year in which he argued that social games have gambling-like elements, even when there is no money involved whatsoever -- rather, they introduce the principles of gambling through in-app purchases.
"On first look, games like FarmVille may not seem to have much connection to gambling, but the psychology behind such activities is very similar," he argues. "Even when games do not involve money, they introduce players to the principles and excitement of gambling. Companies like Zynga have been accused of leveraging the mechanics of gambling to build their empire."
One element that Griffiths has found to be particularly key in encouraging gambling-like behavior in free-to-play games is the act of random reinforcement -- that is, the unpredictability of winning or getting other types of intermittent rewards.
"Small unpredictable rewards lead to highly engaged and repetitive behavior," he says. "In a minority of cases, this may lead to addiction."
Griffiths also points to a "growing body of research" that indicates that players who are presented with virtual representations of money (virtual currency) will find that spending and gambling with this fake cash is hugely exciting.
In those instances when there is no money changing hands, players "are learning the mechanics of gambling and there are serious questions about whether gambling with virtual money encourages positive attitudes towards gambling."
On the topic of in-app purchases, Griffiths says, "The introduction of in-game virtual goods and accessories (that people pay real money for) was a psychological masterstroke."
"It becomes more akin to gambling, as social gamers know that they are spending money as they play with little or no financial return," he continues. "The one question I am constantly asked is why people pay real money for virtual items in games like FarmVille. As someone who has studied slot machine players for over 25 years, the similarities are striking."
Griffiths argues that the real difference between pure gambling games and some free-to-play games is the fact that gambling games allow you to win your money back, adding an extra dimension that can potentially drive revenues even further. This, he says, is why some free-to-play game studios like Zynga are currently moving into the pure gambling market.
Griffiths goes on to reason that the lines between social free-to-play games and gambling is beginning to blur, bringing along with them "various moral, ethical, legal, and social issues."
In another paper published earlier this year with his colleague Michael Auer, Griffiths argues that "the most important factors along with individual susceptibility and risk factors of the individual gambler are the structural characteristics relating to the speed and frequency of the game rather than the type of game."
"The general rule is that the higher the event frequency, the more likely it is that the gambling activity will cause problems for the individual (particularly if the individual is susceptible and vulnerable)," he adds. "Problem and pathological gambling are essentially about rewards, and the speed and frequency of those rewards. Almost any game could be designed to either have high event frequencies or low event frequencies."
As a result, he argues that the more potential rewards that are offered to the player, the more problematic and addictive an activity can become.
Griffiths goes on to argue that it would be potentially possible for a "safe" scenario to be achieved, by which a game is designed such that players cannot spend money past a enforced structural limit -- this would ensure that players were not able to develop a gambling problem, regardless of their susceptibility.
Griffiths is keen to stress that, as of yet, the psychosocial impact of free-to-play games are only just beginning to be investigated by people in the field of games.
"Empirically, we know almost nothing about the psychosocial impact of gambling via social networking sites, although research suggests the playing of free games among adolescents is one of the risk factors for both the uptake of real gambling and problem gambling," he adds. "Whatever research is done, we can always be sure that the gaming industry will be two steps ahead of both researchers and legislators."
Tit for tat
Most recently, a pair of analyses on the topic of free-to-play spending coercion versus pay-to-play spending coercion was spread far and wide via social media.
Ramin Shokrizade, an industry consultant who has written numerous papers on the topic of free-to-play monetization, detailed his research into how social games will trick players into making in-app purchases through incomplete information and virtual currency.
Part of this method involves providing the player with "fun pain" -- a term coined by Zynga's Roger Dickey to denote the situation in which a player is put into an uncomfortable position, and then offered the chance to remove the "pain" by spending real money.
There's also a sort of opposite monetization method to this, which Shokrizade calls "Reward Removal." A free-to-play game offers the play a huge reward, and then subsequently threatens to take away the reward if the player doesn't fork out cash.
"To be effective with this technique, you have to tell the player they have earned something, and then later tell them that they did not," he says. "The longer you allow the player to have the reward before you take it away, the more powerful is the effect."
But the use of virtual currency is where the coercion really takes off, says Shokrizade. Griffiths stated before that spending virtual currency teaches players the mechanics of gambling, but Shokrizade goes a step further and argues that when players see their real-world cash in terms of virtual currency, it lowers the sense of anxiety and allows them to be less apprehensive about spending larger amounts.
Elsewhere, Shokrizade details what he calls "Ante Games" -- those free-to-play titles that appear to be games based on skill when you first boot them up, but gradually turn into a money game, as the more experienced players put real money in to beat other players. It's worth reading Shokrizade's entire article on the topic, which also delves into "Progress Gates" and sales boosts.
Though there's no reference to Shokrizade's piece in it, Spry Fox's Daniel Cook posted a blog a few days later titled "Coercive Pay-2-Play techniques," in which he takes to task many of the arguments against free-to-play with a tongue-in-cheek rebuttal of his own.
He notes that pay-to-play games invite players to spend large amounts of money without ever having played the game first, while some companies purposely use videos, adverts and previews to artificially increase excitement for upcoming and released games.
Cook adds that this pre-release "propaganda" means that developers don't need to worry as much about the actual game design, and can simply make the sell by "having a catchy theme, pretty graphics and the ability to turn out short sequential games rapidly."
He also targets Skinner Box game design, the various methods of sale such as bundles and time-limited discounts, and other forms of manipulation in free-to-play games. He closes by jokingly suggesting that pay-to-play games are hurting the industry, and are an immoral practice.
Cook is, of course, is making light of the free-to-play arguments a fair bit, although the overall point of the article is to compare just how "coercive" the free-to-play model actually is -- especially when these worst-case scenarios are compared to the worst-case scenarios for pay-to-play games. Cook's blog is well worth a read.
Laralyn McWilliams is a video game designer and producer who has previously worked on SOE's free-to-play kids' game Free Realms as creative director. She has written at length about the strengths and weaknesses of the free-to-play model.
I sent McWilliams much of the information I had uncovered while researching this article, and she told me, "From a practical perspective, people will always find an activity that attracts them to the exclusion of many other activities."
She notes that whether we should be encouraging or discouraging this common human behavior comes down to two main factors:
1. Whether the activities being included are considered "valuable" or "worthwhile," and whether the activities being excluded are (or are considered) "essential."
2. Universal elements like food, sleep, health, hygiene, maintaining a source of income, and paying important bills.
"The first criteria is largely subjective and varies tremendously based on who's doing the evaluation," she notes. "Most people would agree that spending money at the casino to the extent that your bills go unpaid and you get evicted is a behavior we shouldn't encourage. Most people would also agree that playing a game so many hours in the day that you don't sleep or eat and your health deteriorates is also something we shouldn't encourage."
Where the conversation gets muddy, McWilliams argues, is when you begin to compare free-to-play spending with traditional retail video game spending. She notes that while we might pull a face at someone spending thousands of dollars on a single free-to-play over a year or so, you could argue that many players who purchase console and PC games may spend just as much over the same period of time.
"I suspect that if he'd spent the money on retail games, he'd walk away saying, 'I keep having trouble making rent because I'm buying a new game every month. I have to figure out a way to cut back," she says of one of the stories I collected.
"He probably wouldn't question too much whether games in general are worth the money from the objective perspective -- just about whether he's buying them too frequently," she continues. "There's something in the way he spent money in the free-to-play game, though, that made him question on a fundamental level whether his money was well spent. Sure, some of that's probably the social perspective right now that free-to-play games in general and virtual goods in particular are not expenses we value as much as expenses for other hobbies (including retail games), but I suspect he might still feel the same way even without that social input."
With this in mind, McWilliams believes that are two fundamental questions that free-to-play developers should be asking themselves:
1. Should we try to be aware of unhealthy spend patterns in players and find ways to limit/discourage them?
2. Are we providing good value for money spent, and if we are, why doesn't it feel that way to many players?
Says McWilliams, "Even if the percentage of players who fit in the first category is very small when you look at actual data (and compare it to the behavior patterns recognized as unhealthy addiction in gambling, for example), we should be concerned about the fact that public perception -- even from our own players -- would put far, far more people into the 'unhealthy spend' category, because there's a fundamental feeling that any significant amount of money spent in the game is money that didn't result in meaningful value."
To put it simply: "If you sat down right now and dropped $60 on Remember Me, and the quality of the game was what you expected, would you feel the same about that as if you sat down right now and dropped $60 on Clash of Clans? A lot of people wouldn't, even if they play the games for the same length of time."
She continues, "Is it the intangibility of virtual goods? The fact that once you buy Remember Me, it doesn't ask you to spend that same amount again next week?"
The International Social Games Coalition is a group that was set up earlier this year, with the aim to better educate people about the inner-workings of the social games business. I spoke with the group's CEO Luc Delany regarding my findings.
(I should note at this point that the ISGC was set up by Zynga alongside a variety of social casino game companies, and it was a Zynga representative that suggested I talk to Delany. I say this not to undermine any of Delany's points, but rather to give you the full picture when reading his views, and to explain why much of the discussion is focused around comparing free-to-play "whale" spending with "whale" spending in the gambling industry.)
"Lots of people have tried to draw the parallel between people spending money in social games, and real-money gambling," he tells me. "However, the motivations for playing a gambling game versus any other game, or any other type of entertainment, are very different."
He notes that in gambling games, there is a risk of loss, and the opportunity of winning -- therefore the addiction that players have to free-to-play games is very different.
"There is a documented history of people being addicted to video games, and other forms of entertainment," he adds. "I spend too much money on iTunes, and films I'll never watch, just because I make an impulsive buy. People spend so much money on handbags, on golf clubs, on all kinds of other forms of entertainment, but gambling is very clearly defined as games where there is a stake, a chance, and a win or loss."
I ask him about the example of Chris purchasing Team Fortress 2 "keys" in the hope that he will be rewarded with an "unusual" item, and then continuing to purchase keys until he found such an item. Isn't there an element of stake and chance there?
"I don't see it as the same issue as gambling," he answers. "Under that scenario, how do you compare it to certain TV shows that are essentially the same thing? People text in to play along with a game, trying to find the money in the box -- yet that's not a regulated gambling service. As a society, we've judged that to be the motivation of a payout, that creates a certain risk amongst players. Therefore we've decided that this level of regulation is necessary."
Delany is keen to stress that social games are already heavily regulated -- there are consumer rights, data protection acts, unfair commercial practice directives, and more -- and he questions, "Is there proof that this form of entertainment is more harmful or addictive than other forms of entertainment?"
At this point, I questioned how harmful or addictive a free-to-play game would have to be before we, as an industry, should have to take it seriously.
"I don't have an answer for that," answers Delany. "If you look at stories about people being addicted to things, whatever is the latest form of entertainment gets hit with that badge. In the '90s it was games consoles, in the '80s it was television, before then it was radio -- radio was going to destroy culture etc. So it's not a new discussion, that people scrutinize new forms of entertainment. It's a healthy part of society."
"However," he adds, "today there is no evidence to suggest that this is a particularly dangerous form of entertainment, as opposed to any other form of entertainment that people spend money on. We know that people spend too much money is all forms of entertainment."
The road ahead
There's a lot to take in here, and clearly my delving into the underbelly of free-to-play is just the tip of the iceberg. Whichever way the signs appear to point, a hell of a lot more research is needed to truly paint the full picture of what is going on behind the scenes.
It's clear that no-one's idea of a good step forward is to get government bodies involved in the process, regardless of whether it would benefit free-to-play players or not. As part of my due diligence for this article, I did get in touch with both the Federal Trade Commission and the UK's Office of Fair Trading, to assess their views. I don't expect to hear back from them for a while, given the volume of correspondence they no doubt receive, but I plan to relay any response to do receive.
In the meantime, it would seem foolish to let the topic lie, especially while the conversation is well and truly flowing. While research into the potential psychological elements of free-to-play game design continues, it's my hope that free-to-play studios will at least take a hard look at the current design manifestos being carted around, and consider how they may be affecting the lives of their players.
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