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Jun 22, 2016 | 7 min read

Social Media Sinkholes: The Slippery Slope of In-App Purchases and Gaming Addiction

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Spending the odd buck on a game level isn’t a big deal on its own, but small purchases can easily add up to a big problem. What are the costs of gamers’ addiction to in-app purchases?

Spending real-world money on power-ups, level unfreezes and other bonuses in video games might seem baffling, but ultimately harmless, to non-players. But with many people paying hundreds and even thousands of dollars they can’t afford on purchases with no real world value, it’s clear that the potential consequences of playing can be far worse than wasting time. So why do we do it?

Just One More Hit

The brain activity prompting this behaviour isn’t much different from what compels addicts to seek out their drug of choice, even though they know it’s harmful. A 2013 study where subjects were shown online gaming screenshots while in an MRI scanner showed increased blood flow to the same brain areas that are involved in addiction. In addition, this effect was particularly pronounced in recovered gaming addicts, strengthening the similarity between drug addiction and online gaming addiction.


These neurological changes are no accident. Game apps are specifically designed to be as addictive as possible: basically, they’re easy to learn while hard enough to be rewarding. Besides that, game designers leverage every aspect of UX design to create a compelling environment that users want to stay in for extraordinary lengths of time. Farmville’s co-creator Sizhao Zao Yang explains that what keeps us glued to his brainchild is the same as what keeps a losing player at the poker table:

“Farmville uses a concept called appointment gaming. Which has the fundamental concept of using time and investment to compel you to come back. The investing portion of appointment gaming is crucial as it allows you feel psychologically compelled to come back. This is a psychological concept known as escalation of commitments or sunk cost fallacy.

But that’s just one component of Farmville’s allure. ECommerce marketplace expert Phil Michaelson notes eight ways in which Farmville is designed to keep users coming back and engaged; it’s no wonder that the game counts 40 million users, down from a peak of 80 million in 2010.

Thousands of people have bought a power-up or two without letting a past-time become a life-wrecking habit. However 0.15% of gamers bring in 50% of a game’s revenue, and since these games are marketed to ordinary people, it seems likely that many in-game high rollers are vastly outspending what they can afford.

The Virtual Economy


Addictive games with buyable power-ups cause undeniable harm. However, any attempt to impose regulation will doubtless be met with pushback from a mature and well-funded industry. It’s been over ten years since the first virtual gaming millionaire was declared: Anshe Chung treated the “3D virtual world” just like any other developer would, buying land and then building houses, landscapes, and even gated communities, before selling it to other Second Lifers. Since then the monetization of online gaming has undergone significant evolution, dogged by ethical problems at every turn.

The Second Life economy closely mirrors our own, with entrepreneurs like Chung at one end, and low-skilled workers grinding out a living at the other. Around the world, the “playbor” (play+labor) model lends itself to sweatshop style employment, workers spending long hours on repetitive work for poor wages — or none at all. In 2011, former Chinese labor camp prisoner Liu Dali told The Guardian that prison guards forced inmates to play online games all night in order to build up in-game credit which was then sold for real money.

While the secondary economy around roleplaying games is still thriving: entrepreneur Shane Jeffrey made $475,000 between 2011 and 2014 by reselling World of Warcraft profiles and is still active. But, as he openly admits in a Reddit AMA thread, his activity “is completely against the TOS” — unsurprising, as reselling doesn’t yield any profit for the underlying platform. In-app purchases circumvent this economic loophole, allowing developers to profit from players looking to leapfrog the boring bits themselves.

An IRL Ethical Quandary


The fact that in-app purchases and addictive online games have become so well integrated into our culture brings up moral as well as practical questions. Most countries have extensive legislation controlling access to addictive substances and activities, but unless a game incorporates an element of risk or chance, gambling laws don’t apply.

The potential harm is particularly acute in younger gamers, as there’s evidence to suggest that gaming physically alters teens’ brains, making them less likely to focus and more likely to make mistakes in testing.

But the damage isn’t only cerebral: in 2014, Apple was ordered to repay $32.5m in accidental in-app purchases, many made by children without their parents’ knowledge or permission. Lawmakers have taken steps to ensure that potentially addictive products are not marketed to children or are at least marketed responsibly, but games with addictive potential don’t typically carry any kind of health warnings or age limits.

It’s hard to justify profiteering from addiction, but it should be noted that the industry provides thousands of people with jobs. To pick just one example, King Digital Entertainment PLC, the makers of Candy Crush, boasts 665 staff, many of whom owe their jobs to in-app purchases. Addictive games boasting buyable power ups may be a morally dubious consumer product, but they’re also an economic fact of life. Furthermore, it could be argued that any product or service could become addictive (SoulCycle, tanning, and social media as a whole); why focus on gaming?

In-app purchases are here to stay, with thousands of people owning their livelihoods to beguilingly seductive paid power-ups. While advertising has traditionally been a reliable source of monetization for publications and media channels, in-app advertising has proved to be largely ineffective– certainly much less effective than in-app purchases . Responsible providers should carefully consider how to deliver such games in a way that minimally harms their audiences: especially as AI, VR and an increased interest in UX design seem set to develop even more immersive and potentially addictive experiences.

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