- Psychological Pricing Strategies Used By Game Developers
- How Do In-Game Pricing Strategies Affect Consumer Decisions?
- FAQs
How do video game developers determine what price tag they want to put on the in-game purchases of their video games? How do app developers decide what price users must pay to ensure they reach their monetization goals?
Well, it might come as a shocker to some of you out there, but even the in-app purchases you think are so minor have an element of psychology to them. Developers of video games tend to use a handful of psychological tricks when setting their prices to urge more players to spend money. How else do you think free-to-play games like Fortnite and Genshin Impact are currently among some of the most profitable games?
Today, we want to review some pricing strategies developers use to make YOU spend more money.
Psychological Pricing Strategies Used By Game Developers
Naturally, developers use different psychological strategies when pricing their in-game purchases. This is mainly because pricing drives the perception of cost. However, we’re here with seven of the most popular ones.
In addition to explaining how these pricing strategies relate to in-game and in-app purchases, we’ll also give examples of some games that use this psychological pricing strategy.
Charm Pricing
You have undoubtedly seen products at a “discounted price” of $1.99, $5.99, etc. Instead of an even $1.00, the seller will set the price of something to one cent below. Most business and marketing majors will recognize this as one of the oldest tricks in the book. This is called Charm Pricing, and it involves setting the price of anything just under a whole number.
The psychological principle behind this tactic is that consumers perceive prices ending in .99 as significantly lower than they are. This motivates consumers to purchase the item, thinking they’ve struck a significant deal.
Perhaps the most common place this specific strategy is found is when it comes to premium subscriptions. If you want to purchase a PS Plus or Xbox Live subscription, for example, then it’s very likely that this type of psychological pricing will be used.
| Pros | Cons |
| Perceived Savings | Potential Loss of Trust |
| Increased Sales | May Have Limited Effectiveness |
| Psychological Advantage | Potential Neglect of Value |
Innumeracy
Ah, yes, the Innumeracy psychological pricing strategy. It may have a weird name, but we guarantee that most of you have seen this at work. That is because so many companies use it to encourage customers to purchase. This has been made famous by discount retail stores like Wal-Mart.
How does it work? It doesn’t use numbers but lures consumers in via attractive promotions instead of simply offering discounted prices. Examples include BOGO (Buy One Get One Free) or even Buy One Get Two Free. Even if the product’s base price is increased to accommodate this strategy, consumers believe they’re getting a lifetime deal with this.
Now, which games tend to use this strategy as part of their business model? The most common types of developers that use the Innumeracy strategy are those that develop puzzle games, especially for mobile. When setting the price for power-ups or mandatory energy bundles, they might put a buy one get one free tag or even the “two for the price of one” title to lure their audience in.
| Pros | Cons |
| Simplified Decision-Making | Risk of Misrepresentation |
| Increased Conversions | Some People Might Catch On |
| Enhanced Accessibility | Limited Applicability |
Odd/Even Pricing
Up next is odd/even pricing, which is a rather exciting price strategy that is not commonly seen in video games. This involves using odd numbers, such as $3.79, instead of even numbers as you would in Charm Pricing.
Consider the advantages of this price appearance on consumer behavior. Odd numbers give the impression of precision. If the customers perceive the price as more accurately calculated, there’s a high chance that they will feel more confident in their purchase. They’ll feel like they are getting exactly what they are paying for.
Where is this pricing used for in-game purchases? Look no further than battle pass purchases. The two most common prices for battle passes in games are $4.99 and $9.99, both of which use this pricing.
| Pros | Cons |
| Perceived Precision | Potential Confusion |
| Increased Trust | Limited Appeal |
| Enhanced Decision-Making | May Unnecessarily Complicate Pricing |
Price Anchoring
Price Anchoring is another pricing strategy developers use when setting the prices of in-app and in-game purchases. It takes full advantage of the human tendency to make decisions based on relative value. By showing the most expensive offering first and then proceeding to show cheaper offerings, you make the later offerings seem more reasonable in value.
This is done because you pretty much ‘anchor’ the base cost for the consumers. Every offer is compared to the first one, and because it’s cheaper, it looks much more economical.
As for what type of developers use this tactic, games that tend to offer bundles a lot use this psychological pricing. They place the most expensive bundle on the list and then provide cheaper bundles after that initial bundle. This makes the bundles that come later seem more reasonable.
The sales effects can compound when price anchoring is combined with other in-game purchase strategies.
| Pros | Cons |
| Guided Choices | May Overwhelm Consumers |
| Perceived Value | Risk of Backfiring |
| Effective for Bundles | Complex Implementation |
Visual Impact
The numbers play a huge role in your pricing strategy, sure. However, how you deliver the price also plays a massive role in how successful your in-game purchase is. This is where the visual impact of the pricing comes in.
While this strategy is usually used to propel some other psychological pricing tactics to success, that doesn’t mean it isn’t essential. After all, visual elements, such as images, fonts, and colors, can significantly influence a user’s perception of the product’s value and willingness to pay for it.
- Images can convey value and functionality more effectively than text alone.
- Elegant, well-chosen fonts can make your pricing page look professional and trustworthy.
- Colors evoke emotions and associations. For example, red can signify urgency or excitement.
| Pros | Cons |
| Enhanced Appeal | May Be Costly |
| Improved Understanding | Element of Subjectivity |
| Can Help Create Brand Image | Overemphasis Can Backfire |
Center Stage
The next pricing strategy we want to highlight is the Center Staging or the Center Stage strategy. As the name suggests, it involves placing the item you WANT consumers to purchase at the center, surrounded by two more options that are designed to be less appealing. That said, it is entirely up to them whether developers make the options surrounding the center unappealing.
Now, you must be wondering how something seemingly so minor could psychologically affect anyone’s spending pattern, right? Our eyes are naturally drawn to the center when faced with multiple choices. Because we’re naturally drawn to the center choice, we’re also more likely to want to purchase it.
You have probably seen this strategy in SaaS products before. The image above shows a typical SaaS offering for Github, but you can use it almost anywhere. So, what game developers use these specific psychological pricing strategies?
The chances of finding this pricing strategy being used are the highest in subscription-based MMORPGs. Developers of these types of games usually place the subscription plan they WANT their players to go for at the center. This makes those players more likely to be drawn to that specific option instead of just the lower price.
| Pros | Cons |
| Draws the Attention of the Audience | Limited Choice |
| Higher Conversion | Perceived Bias |
| Simplifies Decision Making | Can Potentially Lead to Frustrated Customers |
Decoy Pricing
The final psychological pricing strategy we want to go through is Decoy Pricing. This super clever strategy involves setting a third decoy option when setting prices for in-game purchases. The decoy’s price is designed to make the other two options look more attractive.
For example, let us say that three in-game items are up for sale. The lower price one costs $4.99, the middle one costs $9.99, and the third option is $29.99. Consumers might feel options A and B are more reasonable based solely on the price. This effect becomes more pronounced when you repeat this with the item’s features or characteristics, not just the price.
As for what sort of games employ these psychological pricing tactics, look no further than the most popular MOBA of all time, League of Legends. League of Legends has three main price tiers for skins., which are:
- Option A: Basic Skin for $5.99
- Option B: Premium Skin for $9.99
- Option C (Decoy): Exclusive Legendary Skin Bundle for $19.99
Because the legendary skin bundle is so expensive, the average paying gamer might go for option B. Option B gives a good relative value of being “premium” while only costing half as much as option C. Thus, customers may feel they are getting a better deal.
A great thing about decoy pricing is that it can work for real and virtual currencies.
| Pros | Cons |
| Influential Choices | Transparency Concerns |
| Maximizes Revenue | Complex Implementation |
| Simplicity | Risk of Overpricing |
How Do In-Game Pricing Strategies Affect Consumer Decisions?
Now, it’s also crucial that we establish just how essential pricing strategies are. While many gamers assume that video game developers don’t care about using psychological pricing tactics to influence consumer decision-making, that isn’t true.
You see, at the end of the day, the goal of every video game and app developer is to make money. The most surefire and reliable way of doing this is by increasing sales. While purchasing paid apps and video games is a one-time thing, purchasing in-game items can be recurring.
Therefore, by using clever psychological pricing strategies like any other business would, they influence the purchasing decisions of their players. This is more likely to be effective when a player is loyal to the game, franchise, or developer company.
Fortunately, by knowing the pricing strategies we’re about to list here, you can identify when an in-game item is being sold to you. Alternatively, if you’re a developer considering what pricing strategy to use for your in-game items, we can give you some pointers.
FAQs
What is charm pricing in the context of in-game purchases?
Charm pricing involves setting prices just below round numbers, like $4.99 instead of $5.00, to make in-game purchases appear more affordable and enticing to players.
How can game developers use price anchoring to boost in-game purchase sales?
Developers can place the most expensive in-game purchase option. First, anchoring players’ perception of value and making subsequent, lower-priced options seem like better deals, thus increasing sales.
What is the decoy effect in video game pricing, and how can it be employed effectively?
The decoy effect involves introducing a less attractive, higher-priced option to make other in-game purchase choices seem more appealing.
