How To Control Free-to-Play Spending?

The decision by Japanese mobile gaming giants GREE and DeNA to set hard limits on the monthly expenditure of children and teenagers on their services seems like a fairly minor development in the context of the wider social and free-to-play markets, but it's a tacit acknowledgment of a major problem with the mobile gaming industry - and a hasty attempt to tackle the issue before it really blows up in their faces.

The mobile and social sector has grown at incredible speed in recent years, bolstered by the rapid rise first of social networks and then of smartphone devices - so it's unsurprising that the sector is also experiencing some pretty serious growing pains. Chief among those pains is the question of the free-to-play business model which has become widely accepted as the dominant way to make mobile and social gaming pay for itself. F2P models are controversial on many levels. Lots of traditional gamers (and traditional game creators) hate the idea of building monetisation into the design of the game, being uncomfortable with such a close marriage of business and creativity. It's easy to find examples of "greedy" F2P games which are too aggressive in their approach to monetisation, forgetting that the whole point of F2P is that you need to make a player fall in love with the game first, and ask them for cash later.

More troubling is the question of who's actually paying for F2P game transactions, and what controls are in place to stop children from racking up huge bills

Those issues are internal to the games sector, however, and will eventually be resolved as gamers get used to the F2P model, and F2P game designers get to grips with the fine balance between experience and commerce that avoids winding up potential consumers. What's more troubling - a much darker cloud on the horizon, if you will - is the question of who's actually paying for F2P game transactions, and what controls are in place to stop children from racking up huge bills.

That's a bigger problem than you might imagine. On the surface, it seems that you should only have isolated instances which potentially embarrass game companies - the child who runs up $500 on his mother's credit card, the teenager who foolishly racks up thousands on in-game purchases for an online game, and so on. Embarrassing, potentially garnering a minor storm of mass-media outrage, but hardly crippling to the business model, since these are simply outliers - right?

Except that these cases are not necessarily outliers. In fact, without careful controls being put in place, these cases could become extremely widespread - because the problem of children and teenagers overspending on F2P games cuts to the very heart of the psychology which drives the F2P business model.

In essence, free-to-play games rely on the premise that while most players won't pay a penny for the game experience (something which traditional designers often feel uncomfortable with, resulting in over-aggressive attempts to get users to spend money), a fairly decent percentage will pay a small amount of money (a few dollars) and a small percentage will pay a very large amount of money (hundreds or even, eventually, thousands of dollars). This latter group, although very small in number, can account for a large proportion of a game's revenues.

Who are those people? Well, on a positive level, they're true fans of the game, spending lots of money on a product and experience they love. It's hardly any different, morally, from a Final Fantasy fan who not only buys the games but also ends up buying a specially branded console, tickets to Distant Worlds concerts, T-shirts, figurines and so on. The idea of true fans of a game spending thousands of dollars on their fandom isn't new, and has often been seen as something to be celebrated. Just because that money is going on in-game items rather than physical figurines doesn't really change the morality of the situation - hell, in-game items are a lot easier to keep dust-free, for a start.

On a less positive level, though, there's the simple fact that for most F2P games, the people who constitute that high-spending category are, to put it bluntly, people with poor impulse control. F2P games generally create "speed bumps" in order to encourage players to spend money - actions in the game which could be overcome by waiting a little while or saving up currency earned in-game, but which can also be overcome instantly by spending real money. The players caught out by those speed bumps tend, in general, to be those who have a poor ability to delay gratification. And which group of people are noted for being awful at dealing with delayed gratification? Children.

People who constitute the high-spending category are, to put it bluntly, people with poor impulse control

Now, I'm not going to start waving my arms and shouting that F2P business models are deliberately targeting children, because I don't honestly believe that that's the case. However, there's absolutely no question that the structure of these games and the psychology which drives people to buy in-game items is especially potent for children, who are exactly the audience who are least likely to appreciate the consequences of spending a lot of money on in-game items. If an adult decides to do something like buying $500 worth of in-game currency, then that's fine - you or I may decide that it's stupid, but it's simply not our place to comment on how adults choose to spend their money on their hobbies (within reason). If a child spends $500 on a F2P game, though, that's a huge problem - not just because it's a bad headline, but because the harsh reality is that the F2P game structure actively encouraged and promoted that behaviour.

The solutions put forward by GREE and DeNA are blunt instruments, limiting children under 16 to 5,000 Yen a month spend and those under 20 (Japan's age of majority) to 10,000 Yen. It should be relatively easy for those caps to be applied to Japan's feature-phones, which lock in game accounts to mobile phone accounts and thus make data like the age of the subscriber available to providers. What's going to be a lot more challenging is applying limits like those to systems like iOS or Facebook Credits. How are we to identify which users are underage? How are we to deal with situations where a parent's account is used by a child to buy vast amounts of credit? Certainly, there's an argument that parents have a responsibility to keep their accounts secured from their children, just as they'd keep their physical credit cards out of children's hands - but that argument looks a bit transparent if games and payment systems don't provide solid, easy to use tools to allow parents to do that, and especially if games leave themselves open to accusations of enticing children to overspend.

Amid the wider debate over F2P models in general, this is the bombshell waiting to go off. There has been some rumbling in the mainstream press already, and a handful of high-profile cases have caused a ripple of interest - but as the number of people playing social and mobile games continues to skyrocket, it's almost inevitable that we will eventually reach a critical mass of cases which is sufficient to trigger widespread outrage at industry practices with regard to children. GREE and DeNA have moved to head off that problem - Apple, to its discredit, has been much slower to act, although it admittedly faces a much harder task than the Japanese firms. It's not enough to simply wait for Apple or Facebook to act, however. Each F2P game company needs to look at their products and their monetisation strategies and ask if they're doing enough to protect children and parents - because when this blows up, it may be as much a regulatory and legal question as a public relations one, and that's not a crossfire any firm wants to find themselves caught in.