FUT, Wow : the Economics of Pay-Per-Play
Recently, it was announced that Japanese Playstation 3s had a new version of Gomibako (released stateside as Trash Panic), which actually charged gamers on an installment format similar to what is found in arcades. By paying out 100 Yen (about $1.06 right now), the title gives players three full cracks at the game, after which, players would have to pony up another 100 Yen. The format even further entices players by offering unlockables if they are able to clear modes that the pay-per-play game offers. It is very clear the company is testing the waters to see who bites on this, but reports of this are already attracting its fair share of neigh sayers.
Of course, I’ve had to deal with similar claims this previous year with the advent of Guitar Hero , Arcade or with the game fifa FUT : crédits fut 16 pas cher . Why would people want to lay down $1-2 a song for something they can purchase for keeps for $15 or less ? While in the United States, it seems Trash Panic can now be purchased for a meager $4.99 as opposed to its original $9.99 asking price, further cheapening the $0.99 per three plays format if it were to ever arrive in the U.S. But what if this were to take off ? Could we be entering a phase where instead of Microsoft Points, Wii Points and Sony Wallets come stuffed with “virtual quarters” as avatars roam the digital midway looking for a hungry machine to stuff them in ? Just imagine paying $0.25 to jump into an online Street Fighter match as people fight for the right to not have to pay again (just like in my interview with Capcom’s Seth Killian about getting into fighting games at the arcade – “I didn’t have that much money, so I had to win if I wanted to keep playing”). All of this just begs us to answer, “is there really an advantage to paying less to receive less ?”
Let us go back to my Guitar Hero example or fifa 16. In actuality, the game is doing very well. In my experience with the arcade machine, my specific location had no shortage of players and I’ve seen the great arcade news site Arcade Heroes report on solid numbers the game is receiving in cabinet sales. Even though the typical Internet game site user scoffed at the idea of limited game play, the end result reflects those projected by the economic concept of marginal utility per dollar.
Understanding consumer behavior can be tricky and, in fact, in my microeconomics book (Microeconomics by R. Glenn Hubbard/Anthony Patrick O’Brien, published by Pearson Prentice Hall in 2008), there is an entire chapter dedicated to it. Obviously, the reason for this is everyone acts, thinks and behaves differently, but even so, economists still assume consumers will use their limited resources to buy goods and services that satisfy them the most. No one buys things they do not want – even if you think you have made a purchase and didn’t want it, there was indeed an underlying factor of self interest. You might not have personally wanted that action figure you bought for your son, but the interest of satisfying your son fueled the decision purchase the product. You can later regret purchases you made at the spur of the moment, but at the point of purchase, you were acting on the impulse of self interest.
No matter the situation, economists have a term known as “utility,” which is the subjective satisfaction ones derives from consuming a good. Furthermore, people experience marginal utility as they consume more of the same product, the marginal difference stemming from the change in utility one receives by consuming more – you’re going to enjoy slices of pizza less and less as you become full, for example.