9-12. Is this similar to the “freemium” model used by many U.S. game producers? Explain the “freemium” model and discuss examples of games that use this model.

(AACSB: Communication; Reflective Thinking; Ethical Reasoning)

Consumers love to play games on their mobile devices, and Japanese consumers seem to be the most passionate. Mobile game publishers in Japan have mastered the art of getting as much revenue as possible from players—some earning more than $4 million per day. The makers of Puzzle & Dragons have seemingly cracked the revenue code by using the psychology of mobile payments to squeeze more revenue by encouraging players to play longer. One Puzzle & Dragons secret was to issue its own virtual currency, called magic stones, so consumers don’t feel like they are spending real money for chances to enhance play. Then the game offers a little reward at the end with a reminder of what is lost if the player doesn’t take the offer.
Limited-time sales offer monsters to use in battle for just a few magic stones, and if players run out of space, the game reminds them that they will lose their monsters if they don’t purchase more space. All the while, mathematicians and statisticians work behind the scenes to track game play and make it easier or more challenging to keep players engaged and spending.
One expert called Puzzle & Dragons “truly diabolical” in convincing players to pay and play more. These and other game producers’ tactics have propelled Japan’s game revenue alone to exceed revenue from all apps in the United States.