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Journal of Research in Marketing
provided by Journal of Research in Marketing (JORM - Techmind Research, Canada)

Volume 10 No.3 August 2019

Consumer Preference on Paid Game Microtransaction

David Chua1, Nathaniel Kainama2, Mahesa Nararya Adji3*, Feranita Feranita4
1,2,3
Creative Marketing Program, Management Department, BINUS Business School Master Program,
Bina Nusantara University, Jakarta, Indonesia 11480
4
Taylor’s University, School of Management and Marketing, No. 1 Jalan Taylors, 47500 Subang Jaya,
Selangor, Malaysia
1
[email protected]
2
[email protected]
3
[email protected]
4
[email protected]
*
Corresponding author
Abstract- Online gaming has become prevalent with the rise of the internet availability, where the gaming industry is
experiencing a shift in business model in the last decade. The new model of microtransaction is to make players pay for extra
content and advantages to compete against other players. In this paper, we aim at finding out what the consumer preference
on microtransaction in paid game. Mode, Price, Genre, Microtransaction, and Payment Method are the preferences used as
benchmark for this research that influences decision making for players. To better understand the characters of the players,
cluster analysis is used to group players who have similar preferences with their respective preferences
Keywords- microtransaction; consumer preference; conjoint analysis

1. INTRODUCTION model, which we refer to as freemium business model of

gaming industry, is characterized by the free initial
Online gaming has become prevalent with the technology ‘purchase’ of the game and how the game generates
advancement and rise of the internet availability, where revenue by trying to upsell little bits and pieces of the
the online gaming market is experiencing a shift in game separately (Seufert Eric, 2013; De Picquendaele,
business model in the last decade. The traditional way of 2016)[6]. This business model has shown to be effective
doing a video game business by funding in creating a and successful as the majority of the top 300 applications
game to publish on high end consoles, sold through in Apple’s App Store adopt the freemium business model
retailers and physical stores has decreased steadily since (Brockmann, Stieglitz, & Cvetkovic, 2015)[3].
the last increase in 2008 (Dillon & Cohen, 2013). This Generating revenue of real money through the sales of
happens due to the internet penetration that is being used virtual goods has increasingly become a popular revenue
by the world, with the infrastructure that supports better model for consumer-oriented online services, social
internet usage, easier and faster access that continues to networking sites (SNS), massively-multiplayer online
grow every year. Internet users are increasing throughout games (MMOs), and virtual worlds (Hamari and
the world, having the biggest impact on Asia, especially Lehdonvirta, 2010)[18]. On the one hand, developers
South East Asia. the impact of the increasing population have made compelling game designs throughout the years
of internet users, changing people's styles of in the industry but still lacking the expertise on marketing
communication, exchanging information, and even in the virtual goods to the players. On the other hand,
playing games. Changes in playing games through the marketers who are expertise in marketing games to
internet also changed the model business in the gaming consumer as a whole service lacks knowledge in regard to
world, where there was not only a sale and purchase internal design and mechanisms of games (Hamari and
process, but also a system of subscription and the process Lehdonvirta, 2010)[18]. There is an ever-growing major
of selling and buying virtual goods. this process can also new revenue model on the rise for online services such as
occur without needing to go through a third person or MMO game titles, particularly in the East Asian market
retailer via download, so the process occurs directly (Hamari and Lehdonvirta, 2010)[18]. Research has
between game developers and customers (Dillon & shown that 32% of the game titles in Japan used virtual
Cohen, 2013) The increasing use of mobile phone makes item sales as their main revenue model and that the share
mobile gaming an ever-attractive market for businesses has grown rapidly up to 60% by the end of 2006 (Nojima,
(Montag, C., Błaszkiewicz, K., Sariyska, R., et al., 2007). As of 2006, the global volume of real money
2015)[27]. At such, online mobile game takes a toll, with generated by trading virtual goods was estimated at 2.1
most of the games designed as free-to-play - freemium billion US dollars (Lehtiniemi & Lehdonvirta 2007).
business model (Hamari, 2011)[16]. The ‘free-to-play’

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Unlike the subscription model, microtransactions involves which segment they belong to, this allows us to have an
selling virtual goods in different forms, such as avatar, overview of the unique behavior each segment has.
expansions, in-game extras, and upgrades (Evers et al., Subsequently, we determine their preferred type of
2015)[9]. These virtual items can range from clothes for content (categorized into genre, mode, microtransaction,
game characters with no specific function or weapons and price, and payment method) based on a simulated set of
armors that give the player advantages in online games. data. This paper has two main contributions. Firstly, as
These virtual transactions in the gaming world require the topic on the revenue generating models in regard to
players to trade their real money in exchange for a digital online gaming is still in the nascent stage and still
currency. One example would be L$ (Linden Dollar), a evolving, our findings will provide new insights for future
virtual currency in a game name Second Life, the pioneer research on the preference on purchase decision of each
of the so called “virtual assets”. In some other online segment of gamers. Secondly, our findings shed light for
games, the virtual currency comes in the form of practitioners in designing revenue generating models for
“diamond” or “gems” to be spent according to the cost of their online games within the chosen segment.
the virtual items. Virtual assets have become a new This paper is structured as follows: Firstly, we review the
phenomenon that provides a new unique business literature on consumer preference in the theoretical
environment consists of intangible valuables that exists background section. Secondly, we outline the
only in the digital realm (Yue Guo & Stuart Barnes methodology used to answer our research question.
2011)[47]. These items are ways for players to fulfil Thirdly, we present the statistical findings in the results
social and aesthetic functions as physical commodities in section. Finally, we discuss our findings and propose
the consumer culture (Lehdonvirta, Wilska & Johnsson future research in the discussion and conclusions section.
2009).
On the other side of the spectrum, comes the traditional 2. THEORETICAL BACKGROUND
way of video game play: Pay and play. Top game 2.1 Decision Making, Motivation, and
developers in the industry like Electronic Arts, Ubisoft,
Consumer Preference in Online Games
and 2K Games have tried to evolve from the revenue
Solomon (2017)[37] has categorized decision-making into
model by combining the elements of traditional model
three different kinds of consumer decision making.
and freemium model. Games like Star Wars: Battlefront II Firstly, “Cognitive Decision Making” refers to the
(2018), Assassin’s Creed Origins (2018), and NBA 2K19
consumer calmly and carefully integrate as much
(2018) adopts a model where players still have to pay its information as possible in determining whether a product
full price of USD$60 up front to purchase the game, but
is deemed worth his/her sacrifice. Secondly, “Habitual
can also pay for its little bits and pieces in game like a
Decision Making” refers to the consumer deciding with
freemium game while not inherently being ‘free’ initially.
little or no conscious effort. Finally, “Collective Decision
There exist two types of gamers in the market, the non- Making” is where it involves more than one person in the
committal casual gamers and the committal hardcore
process of deciding the products or services that he/she
gamers (Jacobs, Ip, 2004; Lee, 2015), with casual gamer
would be using.
taking 56% of the market share in the industry (NPD
Guo and Barnes claims that motivation is one of the
Group, 2014). These two types of gamers are separated reasons someone gets something they want (Guo &
mostly by motivation (Lee 2015)[24]. Therefore, the
Barnes, 2011)[15]. On the other hand, Broussard and
types of players that the game is targeting have significant Garrison (2004) refer to motivation as the attribute that
implications in the creation and design of a video game. can encourage someone to do or not to do something.
Even though hardcore gamers accounted for only 20% of While Lai (1999) found that motivation involves a
the market share, games are targeted to hardcore gamers
constellation of beliefs, perceptions, values, interests, and
as they spend more time in game compared to casual
actions that are all closely related. In the context of game,
gamers (NPD Group, 2014). The ever-evolving revenue
the motivation of a gamer is to win or obtain an
model of online games and recent trend of combining the
achievement. This achievement in gaming can be
traditional and freemium model probe a deeper look into achieved by developing his/her character to be stronger
the purchase intention. Existing research has explored the through virtual items provided in the game to increase the
psychological aspects of buying digital content. However, level against other players. In addition, gamers also get
to date, there has not been any research on the consumer satisfaction and self-esteem through personalizing the
preferences toward the combination of two design
appearance of their characters by using rare virtual items,
philosophy: traditional model and the freemium model
showing off to other players. Developing the game
(Hamari, Alha, Järvelä, Kivikangas, Koivisto, & character to be stronger, having abundance of wealth, or
Paavilainen, 2017)[17].
obtaining appearance better than other players in game are
In this paper, we aim to explore consumer preference on
among the motivations for gamers in pursuing and
game purchase decision from the way players play/use the
purchasing functional or decorative virtual items.
product itself. First, we take into considerations players’ Furthermore, Guo and Barnes identified three main
demographic data. Next, we measure their behaviors motivations for gamers in pursuing advanced virtual
toward the video games they play in order to identify
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Volume 10 No.3 August 2019

items, namely, character competency, perceived target audiences through various media channels.
enjoyment, and quest system requirements (Guo & Promising and delivering an outcome that is responsive to
Barnes, 2011)[15]. motivating conditions for which the brand is positioned is
Nevertheless, in the world of gaming, gamers often end a source of value for the user and of return on investment
up with impulsive purchases due to the impatient habit for the producer (Yang et al, 2002)[46].
being built up during game time. Especially in the However, in the context of online games, impatience
multiplayer mode, an instant win or “shortcut” is a serves as the biggest factor in the decision-making
preferable strategy on advancing throughout the game in a process when purchasing the game, as potential players
very quick manner, inherently beating other players. assess the efforts and sacrifices required in the process of
Combining the impatient habit and the desire to win game play. On the one hand, the players assess the brand
together with an easy payment method, such as Paypal or name of the game. On the other hand, the players assess
linking credit card to the game account, gamers are now how the game will be played later on. Some players may
able to purchase digital content at the tip of their fingers not have the time or willingness to go through the entire
in an instant. duration of gameplay process to achieve the desired level,
“I think developers are aware of impatience as a driving thus companies noted this impatience nature and offer
force” - Evans & Elizabeth, 2015 shortcuts to players in the form of microtransaction
Game developers seek to exploit the ‘get-it-now’ attitude (Evans & Elizabeth, 2015). From there, companies started
derived from the impatient behavior among gamers in to take advantage of the impatient nature of gamers to sell
order to monetize the impulse action in generating income their products until it becomes a habit (Wong, 2018)[45].
for the company (Feeld, 2016)[10]. Impatient behavior in The evolvement of impatience affecting gamers’
gamers itself has long been a part of video game culture purchasing decision leading companies to utilize
with the circulation of walkthroughs that offer detailed microtransaction warrants the need to further explore
guides on completing the games. Such historical types of content surrounding microtransaction in
relationship between the impatient habit bestowed upon understanding gamers’ preferences better.
gamers and impulsive purchase of virtual items leads to
2.2 Types of Content in Online Games
the uprising popularity of freemium games (Evans &
To determine the consumer preferences in online game,
Elizabeth ,2015). this research first needs a simulation of what kinds of
Preference is defined as “The usefulness of the brand in
video games are sold in the market and in what ways
helping individuals affect an impact on their gamers play the games. To achieve this, observations
environment.” (Yang et al, 2002)[46]. Yang et al., (2012)
were made by the authors on the video games that are
claims that it is of the utmost important for the
available in the market. From the observations, it can be
management to allocate resources in building and
concluded that there are five categories of video games
maintaining their brand(s) as a brand has great influence
that involves microtransaction.
on preference. Portraying such condition is the
management’s means of engaging the attention of its
Table 1 Conjoint Attributes and levels
Attributes Level, Descriptions

(A1) Mode L1: Single Player

L2 Multiplayer

(A2) Genre L1: Sports

L2: Shooter
L3: Role-Playing

(A3) Microtransaction L1: Cosmetic

L2: Functionality

(A4) Price L1: $20

L2: $40
L3: $60

(A5) Payment Method L1: Real Currency

L2: Virtual Currency
2.2.1 Mode mode where only one gamer is expected in a gaming
The existing games in the market are categorized into two session (Solomon, 2012)[36]. A Single Player game title
modes of playing for gamers. One is the Single Player focuses solely on its story-based essence of the game,

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ensuring players the experience its storytelling journey of business model is widely different, where one of the most
the game. For example, while Uncharted Series (2017) influential factors in determining pricing strategy is the
relies heavily on its story campaign, Tomb Raider Series target market (Myriam Davidovici, 2014). The price of
(2016) is famous for its rich story regarding its one copy of a regular version game (physical or digital)
protagonist Lara Croft. Another example would be Heavy ranges from $20 up to $60 as the publisher or producer of
Rain (2010), a cinematic style game that encourages the the games sets the price for their products and that
gamers to dive into the world of the game’s universe and dynamic has been the norm in the video game industry.
is regarded as one of the most cinematically driven video 2.2.4 Microtransaction
games of all time. Another gaming mode is Multiplayer Microtransaction is the low-cost expansion of a game
game, where more than one player input is expected in an (Tomić, 2018)[43]. This in-game expansion can be in the
environment at the same time in a gaming session. form of new content in a game, for example, in Fallout 3
Examples of multiplayer games includes Dota 2 (2011), where additional areas within the game can be purchased,
Overwatch (2016), Fortnite (2017). There are also game as well as enhancements or supplements by buying bullets
titles that have both Single Player and Multiplayer mode, that can penetrate armor in the World of Tank game.
i.e. Gears of Wars (2008), Uncharted series (2017), and Microtransaction can be spent for various types of digital
Halo series (2001). content should the players wished to do so (Evers, et al,
2.2.2 Genre 2015)[9]. According to Tomić (2018)[43],
With the ever-expanding gaming industry, more and more microtransaction has three scopes of what is offered in a
people are able to get their hands on the latest and greatest game, namely, cosmetic, additional content and pay-to-
game titles on various gaming platforms. The availability win. Cosmetics are the most general form of
of game titles across different platforms ensure meeting microtransaction for gamers because cosmetics do not
the ever-expanding wants and needs of different gamers, affect the gameplay or mechanism of the game. First
where game developers cater to various types of gamers scope, cosmetic products such as costumes for characters
with different individual taste by categorizing games into that the gamer already possesses, buying new characters
genres. Research has found that there are approximately or narrator sounds for a character do not change anything
12 types of popular game genres, all specialized in its for the gameplay itself. For example, Far Cry 5 and
own categories (Solomon, 2012)[36]. Leaning on this Overwatch. The second scope is additional contents that
particular research, we have picked 3 genres to be studied do not change gameplay or create imbalances among
further in this research, namely, Shooter, Role Playing players, such as buying new missions in action games,
Game (RPG), and Sports. These 3 genres are picked due new nation or scenarios in strategy games, new cars or
to the fact that they are among the oldest genres and most trucks in racing games, classic team in sport games, or
widely accepted in the gaming industry that cater to many new characters in fighting games. DLC is the name of a
gamers throughout generations, making them highly combination of these content. But, DLC is not included in
profitable genres in the eyes of game developers. microtransaction because the transaction process is not in-
2.2.3 Price game and the price can be as same as the original game
The business model of the video game industry mainly and can even be more expensive. Examples of games that
consists of value creation for consumers and producers, have DLC include Mortal Kombat X and Mass Effect 2.
revenue generation models, and key processes and The last and the least popular scope among gamers is the
resources to deliver value (Myriam Davidovici, 2014). purchase of a product that affects the dynamics in the
The video game business model has several variances, game. For single players, this transaction can increase
such as subscription, virtual goods, free-to-play, promotion and allows players shortcuts to advance in
freemium, crowdfunding, early access, premium unit game. As for multiplayer mode games, this transaction
price, hybrid, player to player trading (Myriam provides benefits to players who make transactions and
Davidovici, 2014). Of the many business models in video discriminate against other players who do not pay.
games, Myriam Davidovici (2014) categorizes into two Therefore, for players who pay, the strength in game will
forms, namely, Pay to Play (P2P) and Free to Play (F2P). be increased and affect the balance in the game among
Arampatzis Paschalis (2014) finds that there are also other players and increase the chances of paying players for
various types of business models in the video game winning. This type of microtransaction is commonly
industry, such as Pay-once / In-game Fire and Forget referred to as pay-to-win. “Selling time” can also be one
advertising models, User Generated Content, Video form of pay-to-win where for the free user to get
Games Betting Sponsored Games / Donationware something, it requires a certain amount of effort and/or a
Crowdfunding, Subscription, Pay per play / Pay as you go certain time limit to unlock the required content. While
/ Pay per time, Bitcoin mining as a means of payment, there are many types of content that can be purchased in-
and Microtransactions. Of all these business models, they game in the form of microtransaction; this research will
are derived from two categories, Game as a Service and focus on Cosmetic & Functionality related contents
Game as a Product (Arampatzis Paschalis, 2014). With because these function of microtransaction generates the
the various types of business models that exist in the most revenue (Grubb, 2018[14]; Thier, 2019)[41]. The
world of video games, the pricing strategy of each players that purchase microtransaction are perceived
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differently from other players (Evers, et al, 2015). on the use of premium currency and also create a bias
Cosmetic contents are a type of content that a player can value so that gamers do not know the original price
purchase, which allows the players to change the aesthetic (compared to real-world currency) and cannot compare it
aspect of the game. For example, buying additional to the content in other games. Examples of games that
costumes (skins) for existing characters in the game, already have this concept are, clash of clans, Dungeon
different looks for characters, additional music tracks, a Keepers, Clumsy Ninja, Game of War, Farm Heroes saga,
different voice of a narrator or characters and decorations and real racing 3.
that change the environment but have no effects on the
quality of the game. Functionality contents are a type of 3. METHODOLOGY
content that players can purchase to help them gain an In order to satisfy the objective of this research, a
advantage in the game, in the form of shortcut to advance quantitative research was held. The main characteristic of
against others or enhanced chance of winning. For quantitative research is that it is mostly appropriate for a
example, Middle-earth: Shadow of War buying minions medium to a large sample while having its outcome
and/or items that gives the player an advantage, and in the measurable (Ashley & Boyd, 2006). Which is the main
case of the mobile game Clash of Clans players can buy advantage compared to a qualitative research.
collectable cards instantly (Tomic, 2017)[42]. This research will be conducted on the internet on public
2.2.5 Payment Method websites like Reddit. Specifically on dedicated gaming
When players decided to make an in-game purchase, forums like subreddits or official ones. We chose this
depending on the game, they have a choice to buy the because it is up to the judgement of the researcher to
content using a virtual currency (in-game currency) or select the respondents, in this case, gamers. Websites such
real-world currency. Whether virtual currency or real- as Reddit guarantees that the respondents would have the
world currency, these purchases cost real money. While sufficient knowledge about the subject being researched.
virtual currency converts the real money put in by the Because they have dedicated subreddits/forums where
player according to the in-game rate, real money people of similar interests gather (CGPGrey, 2013). The
purchases allow players straight up buying with real nationality of the respondents are not imperative for this
currency. Yamaguchi (2004) claims that, in ordinary research (Jacobs and Ip 2004).
economics, in-game currency is not considered real The main segment for this research are gamers. Though
because it is part of a game. In general, money has there are no tight restrictions for the background of each
functions as a medium of exchange, a measure of value, participant however they need to be at least 18 years old
and a means of storage. An object will have the functions (ESRB, 1994). This is due to the legal age required to
as money if the object has a value. The value in the virtual purchase video games content freely without any
currency is only valid for use in the virtual world, for restriction or boundary based on ESRB ratings is above
example, the currency in monopoly is only used and has the situated age. Except when their parents consent to
value only in the game. However, this does not imply a their purchase.
problem for virtual currency as a currency. For example,
Indonesian currency cannot be used in other countries but 3.1 Questionnaire Formulation
can be used in Indonesia because it has value in Indonesia The first and most important decision in constructing the
and not in other countries. Therefore, the value of an questionnaire was to consider whether or not
object can be referred back to the value possessed by the demographic distinctions would be sufficient for an
object (Yamaguchi, 2004). According to Tomić accurate segmentation of the computer and video games
(2018)[43], payment methods can affect a person's market. While some segmentation studies have found
decision to buy something. In the game, someone wants significant differences using gender and age
the transaction process to occur in the simplest way and classifications in terms of sociological and psychological
does not interfere with the gaming process. by slowing issues, Forsyth et al (1999)[11]. Soper (2002)[38] would
down the transaction process, as a result it will have an argue that as the market evolves, there has been a move
impact on decreasing desires. psychologically, someone towards ‘needs’-based marketing. Needs-based marketing
will try to avoid spending money on additional content was developed around the rationale that if marketers
unless they want it or need it. and psychologically too, understand a customer’s current and future needs they can
someone is easier to buy something if they do not know market the right product to them at the right time.
the original price or can not compare the price with other Demographic information in terms of age and gender
products. virtual currency can influence the decision would also be used for comparative purposes. As well as
making by creating a premium currency. This premium helping to promote a more detailed segmentation.
currency works as a real-world currency but in the game. Out of fifteen variables researched by Jacobs and
virtual currency can be bought through the premium Ip(2004) we have chosen the four most relevant for this
currency. Premium currency can also be obtained by research. The four variables are willingness to pay, play
gamers in the game, for example by getting a reward over long session, engaged in competition with CPU/other
from a mission, but not as much as a virtual currency. its human players, degree to which purchasing decision is
function is to provoke and create a sense of dependence based on the genre/type of game. These choices are

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supported by the usage of determining casual and - $20, $40, $60

hardcore gamers by Poels, Annema, et al (2012)[30]. ● Microtransaction
That is the rationale we have taken on this research, based - Cosmetics Only, Functionality Only
on those circumstances we have chosen four variables out ● Payment
of fifteen that were relevant to this research and they were - Real Currency, Virtual Currency
designed by Jacobs and Ip (2004). Four of those variables Those who agreed to take part were asked to provide a
are as follows. score for each of the four variables and the simulated
3.1.1 Willingness to pay content using a ten-point Likert scale. For the behavioral
The gaming industry doesn’t differentiate the type of variables the range of score is 1 for Not important to 7
gamers based on their finances and or age; the industry Very Important except on where the answer for the
categorizes the market with two types of gamers they are respective question needs a numerical amount for an
the “hardcore” and “casual”, these helps the industry to answer. And for the simulated content score 1 would be
pinpoint their targeted consumers based on the content Strongly Disagree to 7 Strongly Agree. A standardised
that they have made. Hardcore gamers are inclined to score (S) for all four variables and the simulated content
spend money regularly on games and games-related will then be calculated for each respondent
products without waiting for price discounts and special As far as data collection tools were concerned, the
offers. While casual gamers are characterized as those execution of the research involved the use of semi-
who want games for free. structured questionnaire, which was used as an interview
3.1.2 Play over long sessions frequently guide for the researcher. Some certain questions were
Playing video games is likely to be one of the hardcore prepared, so as for the researcher to guide the interview
gamer’s primary hobbies. Long session could have mean towards the satisfaction of research objectives, but
that the content is thoroughly driven by the story, additional questions were made encountered during the
gameplay mechanic, etc; this could help to identity the interviews.
success rate of a particular title, whether the gamer is Some sample questions that were included in the
actually enjoying the content that is offered upon structured questionnaire were the following:
purchase or not. 1. How important is it to spend money on
3.1.3 Engaged in competition with CPU/other human digital content?
players 2. How much are you willing to pay for
Separating between the casual and hardcore segment microtransaction in a free game?
whether or not they actively engaged in competition while 3. How much are you willing to pay for
playing video games, the mode a game has to have microtransaction in a paid game?
3.1.4 Degree to which purchasing decision is based on 4. How many hours each week on average do
the genre/type of game you play cell phone games?
Types of genre in the gaming industry is wide and kept 5. How many hours each week on average do
expanding, the purchasing behaviour on a game varies you play console games?
depending on the genre, one of the genres that fully 6. How many hours each week on average do
impacted the purchasing decision of the consumers are you play handheld games?
shooter games such as Call of Duty, Battlefield, Counter 7. How many hours each week on average do
Strike, etc; the game lets players to mainly customize you play personal computer games?
aesthetics on the characters, bump skills via loot boxes or 8. How many hours each week on average do
purchase new maps to play on, this created a never ending you play video games?
impulse demand for the players. 9. How important is it for a game to have
To determine the preferences of consumers a simulated competitive multiplayer?
product based on the available products in the market 10. How important is it for a game to have
must be made. The attribute of content simulated in this cooperative multiplayer?
research is divided into five categories. Continuing the previous series of questions, the
● Mode respondents would be subject to the next part of the
- Singleplayer, Multiplayer questionnaire which is the simulation of what kind of
● Genre products that they prefer. Using SPSS (Statistical Package
- First Person Shooter, Role Playing, Sports for the Social Sciences) 16 cards were calculated out of
● Price the five variables chosen, which are:

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Figure 1
For the purpose of this research the method chosen for knowledgeable about the specific topic along with a good
sampling the respondents will be judgemental sampling judgement ability then the sample selected will follow
where the researchers select a particular population to be accordingly.
sampled based solely on their professional judgement and Conjoint analysis will be used to analyze the data which
or knowledge, the method is based on the individual who will be gathered from the questionnaire. According to
select its own judgement that seems to be the most North and De Vos(2002)below conjoint analysis places
appropriate sample (Kothari,2004)below. However there more emphasis on the ability of the researcher to theorise
is no way to evaluate the reliability of the sampling. about the behaviour of choice than it does on analytical
At least 100 valid response must be recorded in order to techniques. Thus it should be viewed primarily as
produce valid data (Jacobs, Ip, 2004). Within that range of exploratory, since many of its results are directly
samples it should be enough to paint a picture of what the attributable to basic assumptions made during the course
preferences of paid game microtransaction for gamers are. of the design.
The success of a judgement sampling relies on the According to Green and Srinivasan(1990)below there are
excellence of the judgement, if the person is six steps in conducting conjoint analysis those steps are:
Table 2 Steps involved in Conjoint Analysis
Steps involved in Conjoint Analysis

1. Selection of a model of preference Vector model, ideal-point model, part-worth function model,
mixed mode

2. Data collection method Two-factor-at-a-time (trade-off analysis), full-profile (concept

evaluation)

3. Stimulus set construction for the full-profile Fractional factorial design, random sampling from multivariate
method distribution

4. Stimulus presentation Verbal description (multiple cue, stimulus card), paragraph

description, pictorial or three-dimensional model
representation

5. Measurement scale for the dependent variable Paired comparisons, rank order, rating scales, constant-sum
paired comparisons, category assignment

6. Estimation method MONANOVA, PREFMAP, LlNMAP, Johnson's non-metric

tradeoff algorithm, multiple regression, LOGIT, PROBIT
According to Green and Srinivasan(1978)below, there are Data collection procedures in the conjoint analysis have
three ways to choose a model preference for conjoint largely involved variations on two basic methods:
analysis. The mixed model allows some attributes as ●the two-factor-at-a-time procedure
following the part-worth function model. The vector ●the full-profile approach.
model estimates the fewest parameters by assuming the The two factors at a time procedure acknowledges
linear functional form. While the part-worth model multiple attributes all at once. Meaning that the
estimates the largest number of parameters because it respondents are asked to rank all of the exhibits from least
permits the most general functional form. attracted to, to most attracted to.

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The full-profile approach is the approach that will be used Pictorial representation presents the exhibit through
in this research, This method displays the attributes of one several kinds of visual medium. Be it through images or
exhibit at a time, as not to overload the respondents with live presentation of the stimulus.
information. After seeing the exhibit the respondents must Depending on the purpose of the study, the measurement
give a score to the attractiveness of the exhibit. can be either in terms of overall preference or willingness
For these reasons, conjoint analysis is usually done with to pay. The latter is usually for studies of new products
hypothetical stimulus descriptions. This has the additional and services that consumers not currently using. In this
advantage of enabling us to compare predicted behavior research, the consumer's willingness to pay is the one
with the actual behavior of the respondents towards real going to be measured. This research will use the ten-point
brands or services. Likert scale to score the exhibit profile.
With that comes the fractional factorial design, consisting
of a carefully chosen subset (fraction) of the experimental 4. RESULTS
runs of a full factorial design. The subset is chosen so as At the data collection stage, 100 valid responses out of
to exploit the sparsity-of-effects principle to expose 107 were collected only 10 were female, 91 were male
information about the most important features of the and 6 prefers not to say, of which 7 were below 18 years
problem studied while using a fraction of the effort of a old, 67 were aged between 19-24, 17 were aged between
full factorial design in terms of experimental runs and 25-29, 12 were in the age between 30-35, and finally 4 are
resources. above 35 years old. The data is then processed through
Today the presentation of stimulus in conjoint analysis SPSS (Statistical Package for the Social Sciences) from
boils down to three-way. then on two clusters were made as the representation of
●Verbal Description the two segments, cluster 1 amounts to 36.5% and cluster
●Paragraph Description 2 amount to 63.5% of the respondents.
●Pictorial Representation
The verbal description here means that the researcher will 4.1 K-Means Method
be alongside the respondents in answering the At the suggestion of Jacobs & Ip, gamers could be
questionnaire. Their role here is to describe the stimulus segmented into two types casual & hardcore so, two
either using their voice or cue cards. clusters were set for the analysis using the K-means
Paragraph description is exactly as it sounds, the exhibit is method. The 16 profiles were used as the initial seed, as a
described in detail as a paragraph so that the respondents result one segment amounts to 55 (51%) of the
can make their own image of the description of the respondents and the other 52 (49%). The figure below is
exhibit. the mean representation of what the value for each profile
according to each cluster.

Figure 2: Representation of mean values on profiles for all the customers and each segment
Cluster 1: This segment consists of 5 females and 47 Cluster 2: This segment consists of 5 females and 44
males. The average age of this segment is 19-24 years old, males. The average age of this segment is 19-24 years old,
and the average hours of play per week are 16-20 hours. and the average hours of play per week are 21-25 hour.
The majority of this segment (38 respondents) thinks that The majority of this segment (29 respondents) thinks that
it is not important to spend money on digital content. This it is important to spend money on digital content. This
segment is more inclined to playing single player games segment is more inclined to play multiplayer games and
and spends most of their playing time in their personal spends most of their playing time in their consoles and
computer and smartphone. handhelds.
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4.2 Conjoint Analysis has is perceived to be a most important factor of what a

The conjoint analysis resulted in the importance of each paid game microtransaction have, while the second most
attribute. Microtransaction with the highest point of important is the genre of which the game belongs to, at
33.698 means that the type of microtransaction a game 24.954.
Table 3 : Importance Values
MODE 10.200

GENRE 24.954

PRICE 18.033

MICROTRANSACTION 33.698

PAYMENT 13.115
Figure 3 : Utility Estimate

For the Mode attribute, Multiplayer level was chosen to currency. While for each cluster, cluster 1 only has the
be the main preferences by the respondents when highest median preference level at number 3 of 7 points,
compared to Single player level. Next, for the Genre namely profile 3, 5, 7, 11, 12, 14, 15. whereas in cluster 2
attribute, RPG level is the least preferred of the levels has the highest median preference level in profile 11 on
followed by Sports and FPS (First Person Shooter) as the number 6 of 7 points. The results of the Conjoint Analysis
most preferred. Price attribute, the level that has the says that attributes and levels influence enough utilities
highest preference is the $20 option. Then for and clusters. But this research determines attributes and
Microtransaction, the option of having Functionality the levels by using existing observation methods in the
Only type is the most preferred. Lastly, the most preferred market.
type of Payment is the Virtual Currency when compared Nowadays, segmentation in marketing plays a significant
with Real currency. From all profiles, Profile 10 have are role in differing how to communicate and choose which
the most preferred by both of the segments. Profile 10’s product or services to sell. Results from conjoint analysis
attributes and levels consist of multiplayer, FPS, 20$, say that the attributes and levels from each profile
power-ups and virtual currency. influence the desired product, the highest being the
microtransaction type, followed by genre. The practical
5. DISCUSSION implication of such results would be that companies need
According to Jacob and Ip (2004) to segment the video to pay more attention to what type of microtransaction
game market they propose two segments called ‘hardcore’ they are shipping with the game.
and ‘casual’. In our case cluster 1 is considered casual and
6. RECOMMENDATION
cluster 2 is considered hardcore because among other
things, cluster 2 buy consoles only to play video games Since the nature of this research is exploratory then as
and on average have a higher playtime compared to stated by Sandhursen (2004) the findings cannot be used
cluster 1, and so are their preference for purchasing in a practical way but are useful as a groundwork for
microtransaction. future studies. For future research, it is recommended to
Out of 16 profiles, profile 10 is the most preferred by both delve deeper into the geographic and demographic aspects
clusters and its attributes being multiplayer, FPS (First of each segment. The choice of attributes and levels are
Person Shooter), 20$, power-up only, and virtual based on the observation of what is available in the
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