With nearly 17 million Australians playing video games and over 5 million households having two or more gaming devices, one thing is for sure: Aussies love gaming. These stats project a bright future for the Australian gaming industry, but there’s a growing concern, too.
This concern revolves around spending money on video games, especially among youngsters who are new to finances. Kids are obsessed with Roblox, Minecraft, and similar popular games, and this obsession often leads to them wanting to spend on in-game purchases (loot boxes, custom skins, extra features, etc.). But how much is too much?
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The Current Situation
The rising cost of living hasn’t put the brakes on Australians’ love of gaming. In 2024, consumers spent AUD 3.8 billion on games and related hardware, 3% less than in 2023. While that decrease is a positive indicator, examining the numbers more closely becomes concerning.
Within that figure, roughly AUD 1.34 billion was for digital spending, which you can further segregate into:
- AUD 416.4 million for full-game purchases (purchasing a game itself)
- AUD 648.4 million for in-game purchases
- AUD 273.5 million for game subscriptions.
Overall, digital, hardware, and retail sales have steadily declined. However, spending on in-game purchases and subscriptions has increased considerably, by 7% and 16%, respectively.
The Reasons Behind Increased Digital Spending
The gaming industry has evolved from simply offering recreation to employing exploitative design practices that prioritise profits over a person’s well-being. These practices typically include:
- Deceptive designs like disguised ads and trick questions that exploit user vulnerabilities.
- Game designs and reward structures similar to gambling, such as loot boxes, battle passes, and in-game skins (in most cases, all of these depend on chance and don’t guarantee the desired products after purchasing).
- Unfair in-game elements like currency packs and ‘pay-to-win’ items.
- In-game currencies that distort real-world financial consequences.
These have resulted in a paradigm shift in how gamers spend money, from one-time up-front payments to relying on revenue structures dominated by microtransactions, DLCs (downloadable content), and subscriptions. In turn, full-priced sales have plummeted.
‘Freemium’ Games Taking Over
One key reason behind the rise in digital spending is the prevalence of freemium video games. These are initially free to play, and players can download them for free. However, they get expensive over time through microtransactions for battle passes and in-game skins, thus pushing spending habits like subscriptions over one-time purchases.
Micro-Spending Is Getting Normalized
Exploitative design practices mainly leverage the psychology of micro-spending among consumers. In-game stores have psychological triggers, from limited-time sales to randomized loot boxes, that urge players, especially those who want to remain competitive, to pay for the whole experience.
A CPRC (Consumer Policy Research Center) report also revealed that 95% of consumers encountered at least one such deceptive game pattern last year, and 58% saw over 10 types of patterns during the same period. The most prominent were freemiums, data grabs (games collecting user information), and hidden costs.
Consumer Choice And Concerns
Some players spend responsibly on games, rarely purchasing cosmetic items and getting subscriptions to personalize their gaming experience. DLCs and battle passes are vital to extending a game’s replayability.
However, revenue models like subscriptions and DLCs are hardly transparent. There’s a lack of disclosure about recurring costs, odds of getting the items one wants, and the total scope of spending. While some are responsible gamers, many, especially children, are unaware of the underlying expenditure and spend a lot without realizing it, as reflected in the increase in digital spending.
In Conclusion
As the situation stands, saying that digital spending is out of control would be extreme. However, the numbers suggest that spending on in-game purchases is rising alarmingly, which means both adults and parents of children gamers must remain vigilant. Digital spending isn’t negative per se, but it can spiral out of control if unchecked.
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