The Freemium Economy: An Analysis of Consumer Spending in Free-to-Play Gaming

Abstract

This paper examines the psychological and economic determinants of spending in free-to-play (F2P) games, focusing on high-school students in Mumbai. Drawing on 49 survey responses, the study investigates how behavioural biases, such as impulsivity, social pressure, instant gratification, and sunk-cost effects, influence microtransaction purchases despite limited financial independence. The findings reveal strong links between gaming engagement and expenditure, with higher playtime and PC/console use associated with substantially greater spending. Results support existing literature on the freemium model’s reliance on cognitive biases and reward mechanisms. The study highlights how F2P game design effectively converts non-paying players into paying users, even among youth with constrained resources.