https://www.youtube.com/watch?v=JfV5i7frbI0I need to start by saying that as a rule, I do not single out or directly attack content creators, regardless of whether I agree with them or not, and I'm not doing so here. Whether I agree with their positions or not, in general I believe they have the right to express themselves any way they see fit to their audience. And I'm explicitly asking anyone replying to this thread not to attack the messenger. This is about the message. It is something that has been bugging me for a while, and while it is not something unique to this content creator, it is something that is almost signature to their position on the way cash offers should be valued and this time I felt compelled to examine this particular point of view in detail, because it is honestly both weird and mathematically nonsensical, but I believe there's an important idea worth discussing embedded in it. Of course, me being me, I'm going to take the long way to get there, so bear with me. But since this is the long way I want to state clearly:
If you're not going to read the post, don't just slam the content creator I reference because you think I'm about to and you want to join in. That's not what I'm about to do, and neither should you.The gist of the problem is this: the video expresses a ludicrous idea. The idea is if a $30 offer contains four things - let's say T2A, T5B, T5CC, and gold, then the offer should contain
at least thirty bucks worth of each item.
What?
I'm not mischaracterizing the video: I've linked it above. Nor is this an isolated incident. This person believes in general, an offer for X dollars should contain X dollars worth of every item in it. I don't think most people believe this, but there are people that do, and I often wonder how many came to that conclusion on their own and how many picked it up from Youtube videos.
Let's take this opportunity to demonstrate how such offers *should* be analyzed, for the benefit of players who may not know and may be misled into thinking the referenced position is simple and reasonable. Let's look at this offer in the way it ought to be analyzed economically. We'll presume the player is the highest progression tier - Paragon - and compare that offer to what a Paragon player could do using the catalyst store. The *correct* thing to do is to try to break down the contents of the offer to see what the components are worth, and simplify the offer analysis to as small a subset as possible, so the need to estimate value qualitatively is minimized. We start by looking at the two things you can buy in the catalyst store as a Paragon player: T2A and T5B. T2A costs 60 units per. T5B costs 120 units for half a catalyst, or 240 units per. So the net cost of six T2A and two T5B is 6 x 60 + 2 x 240 = 840 units. In cash terms, assuming we were to buy units in the most efficient way possible ($100 USD = 3100) we get about $27.10 USD.
The offer costs $29.99 USD, so if we subtract the T2A and T5B from the contents and the relative value from the price we get a net cost of $2.89 USD for a 50% T5CC selector and 300000 gold which is subjectively pretty good value. That's the incremental value being presented to a Paragon player in the offer,
assuming they buy units.
However, we need to also consider the case of a player that doesn't buy units in general. For a player with essentially unlimited units, the catalyst store catalysts are practically free. To such a player, the T2A and T5B in the cash offer are of far more limited value. The cash offer is then asking about $30USD for half a selector and 300k gold, plus some catalysts you don't really need. That valuation is far worse.
So if you're buying units, the cash offer seems great. If you're not buying units, the cash offer seems poor. In both cases, this can be analyzed in the same way: by *adding up* the value of the contents and comparing that value to the cost, based on the situation of the player.
What I'm presenting here is probably so obvious to many readers, it barely warrants even mentioning, but for the benefit of those for whom this is not obvious, this is the standard way of judging value economically, or mathematically. This isn't something I've made up or that's a matter of debate. This is just how value is defined. So where does the "every item should be more valuable than the cost" idea come from, if it is so mathematically strange?
I believe it is mathematically strange because it isn't a mathematical idea at all. Rather, I believe it is more of an emotional idea: the idea that when you spend cash, every single thing you get in the package should "wow" you. When you spend $30USD, you should look at the T2A in the offer and go "wow" and when you look at the T5B in the offer you should go "wow" and when you look at the gold you should go "wow." You aren't buying things, you're buying a feeling. That's not an entirely crazy idea. At the end of the day, all any of us is ever buying are experiences, not things. Should cash offers strive to offer the experience of Christmas morning?
I'm guessing that there are some people who think there is some merit to this idea, even if they think the math behind it is broken. So let's set the math aside as simply indulging my need to inflict calculation on the forums and discuss the non-mathematical side of this. What would be the consequence of requiring offers to wow everyone with the totality of their contents?
In my opinion, mostly bad. There are many people who would laugh at the math in the video I reference above but agree in principle with the idea that cash offers should always contain high value. They should, in general, strive to "wow" purchasers. But that's extremely bad for the long term health of the game. There are games in which the vast majority of spending is induced by high value offers. The economics of those games operate similarly to how many people here on the forums try to describe as "Business 101" or "Economics 101." Cash offers should contain value at least as high as the cash itself is worth. There should be incentives to buy more, such as volume discounting. Stuff like that. There are games like that. Almost all of them are in Asia. Practically none are in the US or western countries in general. Why?
Because in Asia, games as a service has culturally revolved around spending in the game as a mirror of spending in real life. Spending is a form of status. There's no stigma around "paying to win." If you paid to win, it is because you made enough money to buy it. Having a top tier account in a video game is like having a Cadillac in the drive way. You earned it, you deserve it. It is a matter of pride to spend, and spend efficiently on the most value possible. Spending doesn't replace skill, spending
is the skill.
However, that's culturally unacceptable in general in the US and other western countries. Here, there's a stigma to "paying to win." Here in the US, for example, paying to win is almost seen like being a trust baby. You aren't your account, you're like the parent of your account. You didn't pay to win, you paid for your
child to win. And that's different. It is almost seen like cheating: your account didn't win, its parents paid for it to win.
This tension between deserving what you can buy, and wanting gameplay to earn its own victories, is the grey area where F2P monetization in western games lives. We want to believe that a free to play player can succeed. But we all want our personal spending to count. This has to be balanced for a game to succeed. If cash becomes too valuable, if spending becomes too powerful, this dichotomy breaks, and the game breaks with it. Spenders must be allowed to believe their spending matters or they won't spend. Non-spenders must be allowed to believe that not spending doesn't doom them, or they won't play. And most spenders come from the ranks of the non-spenders. Lose them, and you eventually lose everybody.
So no, spending cannot consistently wow spenders. *Sometimes* it has to, to keep spenders engaged. That's why we have Cyber Weekend. Most of the time it can't. That's why we have most of the other days. Offers generally have to have mathematically sane values. There is some subjectivity to that. but in general most offers have to have nominally low value relative to the price, because most offers are designed to see what the minimum value necessary to get someone to spend is. Some have nominally reasonable value. Those offers tend to be those that encourage people to spend regularly, so they need sustained value. And some have blockbuster value, because sometimes spending has to be exciting, to keep spenders engaged. Different offers have different values, because they fundamentally need to address different needs.
But in general, we should not be comparing individual items to the price of the offer in total. In mathematical terms, that's nonsensical. In subjective terms, that's dangerous.
To reiterate. This is about the idea, not the promoter of the idea. The idea is a worthy subject of dissection and criticism. I'm not criticizing the fact that the presenter presented their idea. They have every right to present their honest position. However, when that position fails to hold up, I believe it is fair game to take the position apart. Which I've probably done to a needlessly lengthy degree, but that's what the N stands for: "needlessly lengthy."
If anyone feels the need to personally attack anyone, attack me for wasting your valuable time. Don't attack the content creator I reference. Attack the idea all you want, because (in my opinion) it is wrong. That's where any discussion should begin and end.