Free-to-play or pay-to-win? Expert reveals dark side of smartphone games

VANCOUVER (NEWS 1130) – They are easy to download, easy to play, and easy to get lost in as your time slips away.

But those ubiquitous smartphone games like Candy Crush are also easy to spend a lot of money on, if you’re not careful.

Critics of so-called “free-to-play” apps have a different name for them — pay-to-win.

“There are in-game purchases. You do not have to pay in the beginning but, to advance in the game, it helps you a lot to pay,” says Dr. Ingo Feidler, an economist from the University of Hamburg attending the New Horizons in Responsible Gambling Conference this week in Vancouver.

“This is very interesting, from my perspective as a gambling researcher, because the business model is so similar to gambling,” he tells NEWS 1130.

“We see in gambling that 50 per cent of the revenues come from one per cent of the players. It’s highly concentrated on a small amount of people who are at risk for having a gambling addiction. With pay-to-win games, 90 per cent do not pay anything at all and one per cent of the players pay so much that it can go up to $10,000 a month for Candy Crush.”

Feidler says those players are at risk for “gaming” addiction.

“It’s called the ‘blue ocean principle.’ You need to find the whale — the one who is spending $10,000 a month on the game. If you bring in one million players, you find find two or three of them paying so much, it really pays off for you as an operator to offer the game to all the rest for free.”

Feidler says regulation similar to what’s being used for online gambling may be the only effective way to combat gaming addiction.

South Korea has started to regulate Facebook games and other jurisdictions are considering ways to keep tabs on online gaming.

“But currently, it’s not regulated [in Canada] and even juveniles can play [by spending] money. It’s not considered gambling because you cannot win money in the end,” he explains.

Feidler admits regulating companies that operate internationally can be a challenge.

“It’s the same as with offshore online gambling companies offering their services everywhere in the world even though they are illegal in many jurisdictions. But we can look to the US and what they do to enforce their laws by blocking payments for illegal online gambling.”

Feidler suggests making companies that offer games with in-game purchases require a license to collect payments.

“Visa and MasterCard wouldn’t be able to process payments for those games in a jurisdiction if an operator doesn’t uphold their license. It sounds easier than it is in the end, but it’s an option.”

Feidler is talking about his research at the New Horizons in Responsible Gambling Conference, which runs today and tomorrow at the Vancouver Convention Centre.