issues and experts

The avatar’s new clothes: appreciation fuels $88-billion free-to-play gaming industr

July 30, 2019
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Contact:
Leyland Pitt, Beedie School of Business, 778.782.7712, lpitt@sfu.ca
Justin Wong, Beedie School of Business, 778.782.9294, bsbmedia@sfu.ca

Link to study: http://i.sfu.ca/zaorMG

It sounds counter-intuitive, but free-to-play online games are a booming $88-billion-a-year industry. Developers of games like Fortnite and League of Legends rake in significant revenues when players purchase non-functional items like clothes and skins for their avatars while playing these free games.

Now, a study led by SFU Beedie professor Leyland Pitt reveals why gamers are so willing to continually spend their money on these non-functional items.

After holding focus groups with gamers, the researchers’ findings suggest that gamers spend money because they want to show their appreciation to those who worked on the game, and to sustain its online community.

The researchers also discovered that gamers are less willing to spend if they receive an unfair advantage in return, because they feel it would be unsportsmanlike.

The study’s findings were published recently in Computers in Human Behaviour.

“What really surprised me was that more gamers weren’t looking to get an edge over their opponents,” says Pitt. “It’s taboo for many in the gaming community to purchase a more powerful weapon or shield to beat their opponents, even though it’s a part of the game. They feel like it’s cheating.”

The research findings also suggest the free-to-play model offers the potential for developers to earn more money over a longer period of time than does the more traditional single-payment model.

“The initial cost to develop games, regardless of revenue model, is enormous,” says Pitt, “but with the free-to-play model, the potential to retain paying customers is far greater than with the traditional model. We found that in some cases gamers were spending $70 or more a month. After the initial cost of the game it doesn’t cost developers much to add new skins or clothes.”

Fast Facts:

  • According to the Entertainment Software Association , there are over 23 million gamers in Canada, which equates to over 64 percent of the population.
  • According to Neilson’s Super Data , free-to-play gaming industry is an $88 billion (U.S.) a year industry around the globe.
  • According to Neilson’s Super Data , Fornite made developers $2.4 billion (U.S) in 2018 alone. It is currently the biggest game in the world with tens of millions of monthly players across seven different platforms.

About Simon Fraser University: 

As Canada's engaged university, SFU is defined by its dynamic integration of innovative education, cutting-edge research and far-reaching community engagement. SFU was founded more than 50 years ago with a mission to be a different kind of university—to bring an interdisciplinary approach to learning, embrace bold initiatives, and engage with communities near and far. Today, SFU is Canada’s leading comprehensive research university and is ranked one of the top universities in the world. With campuses in British Columbia’s three largest cities – Vancouver, Burnaby and Surrey – SFU has eight faculties, delivers almost 150 programs to over 35,000 students, and boasts more than 155,000 alumni in 143 countries around the world. 

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