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Game design as marketing: How game mechanics create demand for virtual goods


Hamari, J. & Lehdonvirta, V. (2010). Game design as marketing: How game mechanics create demand for virtual goods. International Journal of Business Science & Applied Management, 5(1), 14-29.

In short: In this paper, we consider the question of what leads consumers to purchase virtual goods. Most previous studies adopt the individual user as their unit of analysis, focusing on motivations and decision processes that lead to virtual good purchases. We adopted a complementary approach, focusing on how the rules and mechanics developers build into MMOs encourage virtual good purchases.

Download paper here and read more below.

The patterns identified in the paper, can be divided into two categories. The first category consists of mechanics that in marketing terms create segmentation of users and enable differentiation of virtual goods; in other words, game mechanics that divide service content into differentiated contexts along vertical and horizontal lines, and in the process create a need for corresponding virtual goods.

Design

In marketing terms

Towards

Aims to

Stratified content

Segmentation, differentiation

Rules, environment

Create segmentation, enable differentiation and generate incentives for repeated purchases

Status restricted items

Differentiation, planned obsolescence

Items

Enforce segmentation and generate incentives for repeated purchases

Increasingly challenging content

Segmentation, differentiation, planned obsolescence

Rules, environment

Enforce segmentation and generate incentives for repeated purchases

Multidimensional gameplay

Segmentation, differentiation

Gameplay

Create segmentation and enable differentiation and create differentiated additional settings for virtual goods

Avatar types

Segmentation, differentiation

Avatar

Create segmentation and enable differentiation

 

The second category includes mechanics that are used to create demand for virtual goods and encourage repeated purchases. Inconvenient user interface elements and similar gameplay factors have also been used as means to create need for complementary and value-added services that augment the core product. Special occasions related to real-world culture as well as to virtual world -specific contexts have been used in the seasonal promotion of virtual goods.

Design

In marketing terms

Towards

Aims to

Item degradation

Planned obsolescence

Items, rules, environment

Create incentives for repeated purchases

Inconvenient gameplay elements

Core product -> Augmented product

User interface, gameplay

Create settings for additional virtual goods and services

Currency as medium

Psychological pricing

-

Create incentives for (repeated) purchases

Inventory mechanics

-

Items, avatar

Create incentives for repeated purchases

Special occasions

Promotional

Environment, items

Benefit from cultural patterns that encourage buying behaviour and create settings for additional virtual goods

Artificial scarcity

Exclusiveness

Items, environment, rules

Make selected virtual goods more desirable

Alterations to existing content

-

Environment, items, rules, gameplay

Create new settings for virtual goods to have value



More detailed discussion in the paper.

Game design as marketing: How game mechanics create demand for virtual goods

Abstract

Selling virtual goods for real money is an increasingly popular revenue model for massively-multiplayer online games (MMOs), social networking sites (SNSs) and other online hangouts. In this paper, we argue that the marketing of virtual goods currently falls short of what it could be. Game developers have long created compelling game designs, but having to market virtual goods to players is a relatively new situation to them. Professional marketers, on the other hand, tend to overlook the internal design of games and hangouts and focus on marketing the services as a whole. To begin bridging the gap, we propose that the design patterns and game mechanics commonly used in games and online hangouts should be viewed as a set of marketing techniques designed to sell virtual goods. Based on a review of a number of MMOs, we describe some of the most common patterns and game mechanics and show how their effects can be explained in terms of analogous techniques from marketing science. The results provide a new perspective to game design with interesting implications to developers. Moreover, they also suggest a radically new perspective to marketers of ordinary goods and services: viewing marketing as a form of game design.

Keywords: online games, social networking, virtual world, virtual goods, business model, sustainability, captology

Very interesting!

The study is really interesting. Specially the conclusion is very insightful. I think it is absolutely right that with virtual goods the distinction between content and advertising is bluring. I have already recommended the paper all of my friends in Facebook.

Greetings from Germany.
Matthias

Great article, thank you. You

Great article, thank you. You should include the bots/gold sellers bans in it :)

bots => decrease of overall prices and item scarcity => faster obsolescence

Banning farmers is a sort of temporary counter measure.

Peter

Moops.com