What Causes Users’ Unwillingness to Spend Money for In-App Purchases in Mobile Games?: An Abstract

Abstract

Worldwide In-app Purchase (IAP) revenues reached almost US$37 billion in 2017 and are expected to double in 2020. Yet, only 5% of total app users make any IAPs and 70% of those in-app purchases come from big spenders or ‘Whales’ who account for only the top 10% of the paying users. What causes mobile game players to be unwilling to spend money on in-app purchases (IAP)? We attempt to answer this question with a multi-stage mixed-method study combining qualitative and quantitative approaches. First, we developed and validated a new construct of perceived aggressive monetisation which combined psychological reactance with fairness theory to describe users’ inherent aversion to excessive effort to monetise through the in-app purchase business model. Second, we tested the research model using a survey of 527 US and 526 Australian mobile gamers. Third, we conducted a scenario-based experiment with 264 US mobile gamers to test the replicability of the survey findings in a more specific context, as well as test additional hypotheses on the effects of marketing tactics to user’s willingness to spend money on IAPs. The findings supported our conceptualisation of the IAP spending decision as a separate decision mechanism between conversion (i.e., to spend money or not) and the size of spending (i.e., how much money to spend). User self-control and perceived aggressive monetisation act as hurdles preventing the initial spending. However, once the user makes the initial spending, the actual size of IAP spending is an impulsive mechanism explained by users' time-spent playing and exposure to marketing tactics. A follow up field experiment of 264 US mobile gamers showed how the marketing tactics of app publisher can influence IAP spending for loot boxes -an infamous type of IAP- by manipulating the size of the offers, mode of currency, and informed probability for the loot box.