Purchasing Behavior in Free to Play Games: Concepts and Empirical Validation

Free to play is supposed to be the future of monetizing games. On one side user can access the game for free, thus it is distributed quickly. On the other side the game generates turnover by user spending real money on virtual items. Even though only a small number of players buy in-game items, it seems to be a very successful revenue model for games. Yet there is little understanding of the purchasing behavior of paying customers. Due to the importance of understanding the small group of paying users, the customer lifetime value becomes a major issue. This paper contributes to the understanding of purchasing behavior in free to play games. With real data of paying users, we shed light on the purchasing behavior for conversion, retention and monetization of customers in free to play games.