The murky ethics of freemium games 

Price is what you pay; value is what you get. — Warren Buffett

According to recent estimates, top grossing apps in the iOS App Store make north of $5 million in monthly revenue. It’s a little alarming, then, to learn that eight of the top ten grossing iPhone apps are freemium games: games that don’t cost any money to start, but that weave worlds in which players can spend unbounded amounts of real money to improve their standings. Players are apparently quite willing to do so.

Freemium games make me feel uneasy. I can’t quite put a finger on why.

On the one hand, I’m an unrepentant capitalist. I can find no strictly rational grounds from which to object. Spending money on freemium games strikes me as wasteful, but it’s hardly up to me to make value judgments for others. If a game brings enjoyment then spending money to advance further into the game is perfectly reasonable. And it’s not like the virtual goods offered by freemium games are in the same category of harmful as, say, cigarettes or too-large soda pop.

The problem appears, I think, with the notion of enjoyment. The iPhone’s top grossing games are of course designed to maximize profits; it’s worth looking for common traits that might have led to their success. I took a quick look at some of today’s top games, including Backflip’s DragonVale, Kabam’s Kindgon’s of Camelot, and Zynga’s Poker. I got two very strong and very immediate impressions.

First, top freemium games appear to be uniformly low in quality. They have just enough game mechanics to make life potentially interesting for the gamer. Their graphics, interface, and interaction metaphors are remarkably poor — just this side of good enough. Before it became illegal in the States, I used to be an avid online poker player. Even for play money, PokerStars was a lot of fun. Zynga’s Poker is very strange to me: it’s a poker game that has all the basics and yet is, somehow, terribly cumbersome to play.

Second, top freemium games are carefully designed to have a high coefficient of drag on advancement, which coefficient is easily reduced by spending money. To continue picking on Zynga: after signing up, players get a small tranche of poker chips on the house. Part of the reason Zynga’s Poker is so boring is because competition is garbage at any level of play that these free chips can afford. To play an interesting game, players need vastly more chips. The easiest way to get going is to spend real money.

With these observations in mind, there’s a sense in which freemium games employ the same mind-hacks that casinos do. The games themselves aren’t the point; the point is to keep people coming back to the table. A recent This American Life told the sad story of a woman who gambled her inheritance away. In between episodes of gambling she was unsurprisingly miserable. But, seated at the table, the potential of Black Jack kept her genuinely elated. There’s more than a whiff of this in the world of freemium games.

An argument can be made that, in some sense, freemium games are worse than gambling: real money goes in but can never come out. In the world of real-money poker, players are pitted against one another. The casino’s rake is best seen as a rental fee, or a service fee for providing players a venue. The rake is predictable and fair; players can choose to go elsewhere if they feel it is too high. The freemium rake is 100% and always will be.