Why Giving Players Money in Games is a Bad Idea

Despite what you might think, awarding players with money in games is actually detrimental to player retention. Developers need to take into consideration player psychology and game design when making decisions about this.

I strongly believe that player retention is one of the most important factors for the success of any game, especially in the competitive world of cryptocurrency games. I have seen first-hand the mechanics of user retention in gaming, and I believe that most games in the industry today lack the necessary hooks to keep players interested for more than a short period of time. With the right onboarding and retention strategies in place, I believe that cryptocurrency games can become much more successful in terms of player acquisition and overall gameplay.

I think that more top-tier games should introduce real-world rewards into their games. I believe that this would add an extra level of excitement and motivation for players. It would also be a great way to get more people interested in playing these types of games.

The answer lies in one of the cornerstone behavioral patterns that accompany motivation: overjustification. This well-documented mechanism reduces peoples’ interest in an activity. When people are motivated by external rewards such as money or grades, they are more likely to lose interest in the activity once the rewards are gone. This is because they are no longer doing the activity for its own sake, but for the external rewards.

It is the presence of extrinsic rewards, such as cash and prizes. Money weakens intrinsic motivation, which traditional developers say is crucial to long-term player retention. While it is true that extrinsic rewards can weaken intrinsic motivation, I believe that developers should still offer them as they can be a powerful motivator for players.

Games need to avoid injecting monetary rewards into an experience that is designed to be intrinsically rewarding. The enjoyment of beating a tough boss in a Dark Souls-style game stems from the fact that it requires considerable skill. If players are simply given rewards for completing these challenges, it cheapens the experience and takes away from the sense of accomplishment. Games should focus on providing players with enjoyable experiences that challenge them mentally and emotionally, not just providing rewards for completing tasks.

It's clear that money doesn't always buy happiness, and this is especially true when it comes to video games. If you attach a monetary value to the experience, it takes away from the fun and enjoyment. Participating in a FIFA video game tournament with your friends only to earn a small amount of money would take the fun out of it. Offering zero dollars removes the monetary consideration and channels the focus entirely toward the game experience. This is where the true value lies - in the experience itself, not in the money.

It's not enough for game developers to simply offer in-game rewards for players who stick around or make purchases - they need to design their games with user retention, monetization and reactivation in mind. By doing so, they can keep players coming back for more, and ensure that their games are more profitable in the long run.

Economics Without Psychology

As an economist, I would first consider how to incentivize users to play more. The more hours a user plays, the more value they can extract from their transactions; consequently, power-users are more likely to pay for items and transactions within the game. By incentivizing users to play more, we can increase the overall value of the game and make it more attractive to potential users.

Therefore, increasing user retention is imperative. It increases monetization and the projected revenue per user. Suppose a user generates $0.60 per hour of gameplay on average, and you know from data and behavioral patterns that there’s a risk they stop playing entirely. The logic follows that you can start paying them $0.30 to incentivize them to continue. In this way, you can keep them engaged with your game and continue to generate revenue from them.

While overjustification can be useful in some situations, it can also lead to problems. For example, if someone is constantly overjustified, they may start to believe that they are better than they actually are.

It is clear that from a purely economic standpoint, play-to-earn games are a bad investment. Players are effectively paying to play the game, and then earning back only half of what they paid. This does not make sense from a business standpoint, and it ultimately hurts the players who are investing their time and money into these games.

Extensive studies into child behavioral psychology demonstrate the principle of overjustification. We do many things because they hold intrinsic value to us. We're willing to do these activities and enjoy them the most only when the intrinsic rewards exist. This is an important principle to keep in mind when raising children. If we want our children to enjoy activities and stick with them, we need to make sure that they are intrinsically rewarding. Otherwise, they may quickly lose interest.

In my opinion, a child's motivation will not decrease if they are given a $1 reward everytime they play the piano. If anything, the child will be more likely to play the piano more often if they are given a reward. Hard, challenging hobbies are where our body or mind operates at peak levels. A state of flow is achieved when we are operating at our fullest potential. Losing that laser focus will likely make us fail.

I believe that a good matchmaking system in multiplayer games can help players of all skill levels to improve their game. By matching us against opponents that we have an exactly 50% chance to defeat, it comes down to who performs just a little better during the match. This encourages players to try their best and learn from their mistakes in order to improve their skills. Ultimately, this makes for a more enjoyable experience for everyone involved.

It's interesting to see how our brains react differently to activities that offer financial rewards. It's almost as if introducing monetary rewards into a flow state throws a wrench into the spinning wheel. Our brain starts to focus on the monetary outcomes instead of the joy of the challenge. This could have implications for how we approach work and other activities in our lives.

The State of Flow: How to Achieve Optimal Performance

The state of flow is the optimal place for users to be. Games like League of Legends and Overwatch create matchmaking systems that keep win rates at equilibrium, so that players are always in a position to operate at their absolute maximum limit. This generates the highest intrinsic reward by recognizing the player’s ability, providing them with the conditions to improve and ultimately succeed.

I believe that cryptocurrency games have the potential to be much more than they are currently. Right now, they are mostly focused on tokenomics and play-to-earn mechanics, which takes away from the actual game itself. I think that if they could focus more on the game loop and making the game fun to play, they would be much more successful.

I believe that crypto games have the potential to be very rewarding for both players and developers. However, I think that a death spiral could occur if these games are not able to create enough value to sustain themselves. In order for crypto games to be successful, I think that they need to be fun and offer significant rewards for players who invest their time and effort into them.

I believe that developers should focus on creating games that people want to play, rather than worrying about economics or adding crypto features haphazardly. Even a great game with good retention numbers could see those numbers drop if the play-to-earn mechanism is not well implemented.

I strongly believe that everyone should do their own research before making any legal or investment decisions. The views, thoughts, and opinions expressed in this article are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.