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Hands Off my Virtual Doughnuts!

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Online gaming is a funny business when you look at it. 

Would you pay a fiver for a digital sword?  And what would it actually take to shell out $150,000 for a virtual moon in the Entropia Universe? (a universe which doesn’t exist for anyone who was curious, but not sure that’s the most baffling part…)

You may ridicule the thought of paying for something that isn’t real, but it’s big business in the gaming world.  And it can all start with a £1.99 in-app purchase of a box of doughnuts on the game, ‘Simpsons Tapped Out!’ (indeed) on your smartphone. 

Casual phone gamers and hard-core enthusiasts alike have long been familiar with the concept of paying real money to buy in-game items and upgrades.   Now that might be a surprise to some, particularly the parents who discovered a bill from Apple for £1700 for the in app purchases their five year old son was making.  Yikes.

And this usage of technology is becoming more and more significant today, so for my debut blog I wanted to take a look at how the business of gaming has moved on and, how they are keeping their customers engaged.

There was a game changer (no pun intended) recently when rumours began that Rockstar (the Scottish game developer behind the wildly successful Grand Theft Auto Series which is currently available on PCs, Xbox and PlayStation) are considering the prospect of allowing gamers to pay real life money to boost their in-game bank accounts – just like some smartphone and tablet games. 

So far, this is the most popular platform game to consider venturing down this path, and the reaction has not been good:  there is current uproar in the online gaming community. 

So if the customers don’t like it, why would any successful games developer consider trying to make money in this way? (And believe me many have).  Well, there are some widely reported successes…

Second Life is a game where you can buy and sell virtual land.  Players use a portal to exchange real money for Linden Dollars (the in-game currency) – and then spend it on items as diverse as virtual houses to clown shoes, from shopping malls to functional digital unicycles. Developers Linden Lab take a cut of every single transaction.

These games have been set up with the intention of providing compelling virtual content that people are willing to pay money for.  It’s massively popular.

Entropia, where the ‘moon’ sold for $150,000, has a similar system.  As a result the owners Mindark have tapped into a very profitable strand of the games industry, and a very clever usage of digital design.

Whilst this is compelling evidence for this sort of strategy, there are many high profile examples that fall onto the other side of the coin and have become quite costly mistakes. 

Gamesmaker Blizzard angered players of its hugely popular World of Warcraft game when testing a shop to buy virtual items to use in the game.  It was quickly taken down when customers made no efforts to hide their unhappiness in online forums.

Similarly, Diablo attempted an online auction house and the huge backlash prompted a quick withdrawal.

So what can we learn from this?

For me it comes back to being able to truly understand your customers.  The gaming industry is now even bigger than Hollywood; it’s absolutely massive.  But just because players are ‘used’ to paying for additional items on one format, simply translating this for existing platforms is not going to be the answer.

Even in virtual universes, it also still matters what people will give their money out for (though this is hard to believe when you look at the price tag of the Entropia moon).  Paying for in-game items is something that works really well in social environments – for which people want to stand out and feel powerful.   So understanding how people will spend the money, and what on, is really important.

For the purpose of um… important research for this blog, I had a go at creating an in-game item myself.

It was a simple barrel, made in Second Life.  I found the instructions online and after two hours I got it right and it sold for the equivalent of 0.2p!  It was obviously useful to someone…

And this is the point – creating something just because it works somewhere else, isn’t the right approach to take with your customers.  

Taking the care to ensure it’s something that they really want and providing them with the right environment to buy is still paramount… no matter what universe we’re talking about.

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