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.

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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.

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.

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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