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

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2 thoughts on “Game design as marketing: How game mechanics create demand for virtual goods

  1. 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

  2. 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

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