Economic Analysis on Gacha Game Pricing - Part 1 - General History
Written by Researcher Alex and Edited by Rei Caldombra 11/17/25
Introduction
Video games are a key entertainment element that allows consumers to spend their disposable income to obtain additional happiness, value, and other emotions. Consumers can use video games to express their imagination and to make social connections with other individuals, fictional entities, and social groups. Businesses can capitalize on selling physical games and digital products to the consumers which reinforce social connections and assist in creating settings that fits the ideals, ideas, and imagination of the consumer. In the past several decades, the business world has merged and integrated into the entertainment world of consumers. Business practices such as randomised chance systems to obtain a digital product, in game microtransactions to buy power ups or cosmetics, digital advertising, and digital store platforms to buy games or subscription services are now present in the world of video games. These are monetization systems that extract disposable income from consumers that want to play video games.
I want to observe how consumers with a budget constraint are incentivised to buy into an idea. I explore how video game companies perceive video game pricing and the sale of an idea to the consumer from an economic perspective to explain why video game companies shifted to using monetization systems. I will focus on digital product economics and how businesses use randomized chance mechanics in their digital products. My main objective is to identify commonly specific characteristics such as logical decisions and financial choices made by consumers and businesses under realistic conditions. When explaining and exploring these characteristics, I will be specific and as general as possible to capture all scenarios and states that could apply to a talking point. I am doing this to make the information as relatable as possible for this research to be digestible for the readers.
After observing and finding specific characteristics that can be explained by using economics, I will present different ways on how a digital product in a video game is priced to a consumer. The purpose of this is to compare a digital product with a fixed price against a digital product that requires consumers to purchase chances or “rolls” which each purchase will give a chance for the consumer to obtain this digital product. The digital product that requires a fixed price will be called a fixed sale. This digital product which requires the consumer to purchase chances will be called a chance sale.
Once comparing the fixed sale and the chance sale is complete, I will simulate a market where the chance sale will be tested in a consumer group which has consumers with different amounts of disposable income. Different changes will be applied to the consumer group such as removing a consumer, having a consumer lose spending power, or have both effects happen at the same time. The point is to see how the revenue and pricing strategy of a gaming company for a digital product is affected if their consumers are affected by a reduction of disposable income.
Based on the market simulation, the results will be inputted into an analysis on how the business strategies of video game companies using a chance sale system as a monetization method can affect the ability for consumers to spend in a chance sale dominant free to play video game ecosystem. By using the conclusions from the market simulation, different types of consumers can be realistically mapped out to show how video game companies, their free to play games, and video platforms impact where consumers are and move in a chance sale dominant video game ecosystem. In short, this map shows how consumers move between different free to play video games like gacha games and video platforms such as YouTube. This map will show how different strategies used by video game companies to cause consumers to spend their disposable income will affect the health of a free to play video game ecosystem that relies on a chance sale monetization system.
Section 1- Purpose
The release of video games to consumers are designed with three purposes. The first purpose is to give a sense of fun to the consumer through the feeling of happiness, complete understanding from a gain of knowledge, and satisfaction of perfectly completing a task.
The second purpose is monetization which gives a person like a player the incentive to give money to another person or company. Simply buying the copy of a game, using gambling mechanics, and paying for virtual objects or services in the game are several examples of this exchange. A common theme of incompleteness of not having the game, limited knowledge of a story, not having a limited virtual object or service often gives the possibility for the player person to give money. Since money is a material representation of a person's time or value (an opportunity cost), the feeling of frustration is a product of putting in effort either materially or directly. Playing the game does not achieve the result of completion displayed by the game. Feeling incomplete is the level of the total sum of effort and financial value given in comparison to the set standard provided by the medium. The feeling of frustration is the remaining difference between the level of the total sum of effort and financial value input given in comparison to the set standard provided by the medium.
The third purpose is the concept of research which is rarely present in modern gaming. Experimenting with new hardware such as a new game console or with new graphic systems only provides surprise which generates potential for an avenue of happiness or monetization. This purpose is usually carried out of necessity for a company or person to expand markets or experiences. With more known methods used by game designers, tried methods to achieve happiness or monetization in certainty replaces the purpose of research which has an uncertainty to get the other desired two purposes. As an industry expands, the research and experimentation are phased out as systems with certain outcomes are perceived as more stable methods.
In short, fun is achieving happiness through perfection and completeness. Monetization uses incompleteness which creates frustration by an incomplete difference in effort and direct value to make a player give money to another person or company. Research creates the possibility of new methods or devices to create fun or monetization.
These three categories of fun, monetization, and research have shifted across the years. Companies are generally focused towards generating business opportunities since they are financial entities if their motive is for profit. Logically, new companies would first conduct research, discover new fun and monetization mechanics, then shift the fun mechanics into additional monetization mechanics.
Historically, when the game industry began with pixel systems, limited hardware, and low resolution visuals, developers created consoles and new video games with new game mechanics, stories, and control systems. Monetization systems were also generated out of research with arcade games, game cartridges, and software licenses. An expansion of the pie allowed for the growth of fun and monetization to coexist without conflict. Growth of new consoles and handhelds to give new experiences like the Sega Saturn, Gameboy, Gameboy advanced, Xbox 360 are examples of research being converted to both innovation for monetization (price tags on consoles/hardware) and fun (like new gameplay experiences and graphic systems). However, around the years of 2010-2015, the cost to conduct research began to become redundant and expensive with all the current knowledge and system present to generate new content. Since there was no more sustainably overall growth, monetization and fun intentions began to compete with one another. This led to the creation of the gacha game system in 2010 where monetization ran in conflict to the purpose of happiness.
The growth of the gacha system soon increased the use of direct payment methods supporting chance-based systems. The increase in direct payment methods such as paying for cosmetics, skins, or season passes in games first arose from pay to win items and skins then to paying for a chance to gain these items and skins. The combination of direct payment and chance systems allowed for larger direct payment systems like paying for season passes or even economies for digital items.
Since companies in the video game business are inherently for profit, it would make sense that their end goal is to make monetary incentivized games rather than maximise giving fun experiences for a consumer. Video games that use aesthetics, randomness mechanics, and story elements together are optimized to get money out of consumers. Therefore, it is important to observe the evolution of monetization in video games. By keeping grounded on the initial root nature of a for profit business wanting to make money, it would provide basic yet relevant context on how for profit companies ended up using chance based monetization systems.
Section 2- Monetization Systems
The historical use of monetization systems in video games can be summarized in three points.
1. First, there were small direct payment methods like skins, cosmetics, and pay to win items.
2. Then there were direct payment systems like digital currencies to support a new system of paying for having a chance to gain these items and skins.
3. This allowed for larger direct payment systems like paying for season passes, subscriptions, in-game digital economies, or digital currency to pay directly for digital items.
These three points can be split into three historical stages.
Stage 1: Uneven accelerated research for fun and monetization.
Stage 2: Growth of chance-based monetization systems.
Stage 3: Cementing of formal storefront development of monetization systems
Stage 1: Uneven accelerated research for fun and monetization
The first notable Stage 1 of players buying direct cosmetics was documented in 2006 from Elder Scrolls IV: Oblivion, but this is overshadowed by the general scope of what defines as a direct payment for games. Arcade machines dating back to the Computer Space arcade game in 1971 are categorized as a player using direct payments to keep a player paying and playing. At this time up until the relative start of stage 2, research towards monetization and fun was largely untapped which allowed for the growth of the game market without any conflict between these groups of fun, monetization, and research purposes for games.
However, not all video game advancements were equal in growth. Some video game companies had a quicker Stage 1 research growth phase and adjusted their video games towards advanced monetization strategies. Within the early stages of the game industry, outliers such as large scale video games like Massive Multiplayer Online Games (MMOs) combined all of these monetization points in raids and auction houses. In this setting, these games accelerated to stage 3 in the growth model when the game industry pie was still growing, thus having no conflict with the purpose of fun by being under the guise of research through a new monetization system. However, the effects of the monetization system allowed for a monopoly of the market in the MMO sphere during this early time of 1990-2010. World of Warcraft (WoW) and RuneScape are some large MMOs during this time which likely crowded out smaller MMOs due to their accelerated monetization model relative to that time. The absence of other systems like the gacha market gave consumers only a few options to play in the realm of live-service games or social games (In comparison to the co-op, home console, and early lobby games). As the larger game market advanced to steps 1 and 2, the introduction of the gacha model caught up with the MMO systems, thus bringing in competition and reducing the revenue stream per game around the 2010 era.
This is the same time of when the game industry began to lose research purposes for developing games around and after the era of 2012 (with innovations being just modifications/evolutions of previous versions such as Minecraft Hunger Games to Players Unknown Battlegrounds (PUBG), big team battles of Halo games to Halo 5 Warzone multiplayer, rather than a new game concept like Mario in 1985, Pong in 1972, or newly released Pocket Monsters (Pokémon) in 1996. This is not to say that there is a defining line or time of what is innovative or not, but to state that the ratio of new content to previous content in a game is more back then compared to now where there is more previous content than new content per game.) This is specifically not to include reiterations or series such as Portal 1 to Portal 2 or Halo Combat Evolved to Halo Combat Evolved Anniversary (remaster) or the Halo the Master Chief Collection containing previous games like Halo 3 and Halo 4. Nevertheless, new content such as game modes like Vampire Survivors released in December 17, 2021 itch.io have modified versions such as HoloCure released on June 23, 2022 on itch.io still show that research for developing games is still evident in the era of 2020.
Stage 2: Growth of chance based monetization systems
The rise of Stage 2 monetization began with the popular MMO game Maplestory utilizing the loot box concept in 2004 (Gachapon Tickets) and then the notable application of Electronic Arts implementing this system in FIFA in 2008 and Overwatch in 2016. This is also compounded with games that ran Trading Card Games (TCG) booster pack systems like the digital game of Hearthstone in 2014 and physical card game systems like Pokémon in 1996. Randomized items being bought with real money or through in-game currency by using real money occurred during the time when research for fun and monetization was at its peak and was starting to lose its steam during this time. Gacha systems such as Fate/Grand Order (with Saint Quartz currency) released in 2015 and Arknights (with Originite Prime currency) in 2019 show that this era (2008~2012~2015 to present) is part of the stage 2 monetization model.
Stage 3: Cementing of formal storefront development of monetization systems
The rise of Stage 3 monetization closely aligns with growth of season passes, subscriptions, in-game digital economies, or digital currency to pay directly for digital items in the video game industry. This was pioneered in the MMO sphere with Meridian 59 (1995-1196 subscriber system) with notable games like WOW subscriptions since 2004 and RuneScape payment system following 2002 and well into stage 2 with the Final Fantasy XIV monthly subscription 2010 to the present. However, systems such as a season pass were seen in the 2010 era with the L.A. Noire game using a season pass in 2011. Large Gacha systems also caught on with the Arknights monthly card in 2019 and in 2020 Genshin’s version of a battle pass (called Welkin Moon) to enhance rewards in 2021. Interestingly, anime gacha games seem to have their seasonal passes introduced around 2019 and beyond while other games such as Star Wars Battlefront already had a season pass in 2015. Although these pass systems may have different content and systems in nature, the concept of enhancing the monetization model to stage 3 evolved over time from large games to gacha games from around the mid-2010 era to 2019 and beyond.
Interestingly, Maplestory seems to have had a gachapon system since 2004 and a cash shop in 2005 (web sources and point shop in JMS 2005 guide and YouTube picture). This MMO system surprisingly could be one of the few rare systems that used both stage 3 systems that included a stage 2 gacha mechanic simultaneously. Therefore, this game can be classified as part of the large-scale gaming industry due to it both being a large-scale game as an MMO (stage 3) and a normal gacha game due to the presence of the gacha element (stage 2). The implementation time from the stage 2 system to the stage 3 system is also different from MMOs that instantly implement stage 3 business models like subscription models or season passes. *Sources for Maplestory can be found at the bottom of the article.
In the large game sphere, games like Destiny introduced microtransactions for emotes in 2015 along with a directly purchasable loot box system called Sterling Treasure in 2016. Combined systems like Black Ops 3 that uses their currency that can be used for supply drops (chance to get items) or to directly purchase loadout slots in 2015. This coincides with the introduction of season passes in 2015 in the large game sphere. Furthermore, combination systems like the Team Fortress 2 crate and key systems from 2010 were used alongside trading introduced in 2011. Economy systems in the large game sphere (excluding MMO development) were interestingly developed in the early 2010 era and matured around the 2015 era. Nevertheless, it can be said that large gaming companies or AAA companies actually achieved stage 3 first with gacha games following suit in around 2019 and beyond.
Chart 1: A general evolution of monetization systems of large-scale games (AAA companies). This does not include individual developer games. This is based on releases or systems from notable games (AAA games in news sources) from a general and relative perspective. Times are not exact and level of severity by arrow widths and severity may not include all games within the industry.
Using the general history of monetization, a chart can be created to visually show how monetization evolved throughout the years. This chart shows that monetization is evolving towards formal structures with their own currencies and storefront systems. I wanted to include this because it shows that the growth of large direct payment systems is paired with monetization systems that want the consumer to pay for a chance to get a digital item. In short, gacha practices eventually become paired with other monetization systems like subscription services, digital storefronts for direct purchases, and digital economies.
There are several points I'd like to emphasize in this article. Video game companies are profit driven businesses, and they would research first on how to attract consumers and then improve upon their findings to retain consumers. Creating fun systems that satisfy a consumer is a byproduct of research and innovation for companies. Ultimately, companies want to maximize their monetization systems while minimizing costs for attracting or retaining consumers with fun systems. This uneven balance is historically the ideal cycle for a video game company.
Conclusion
For the next article, I will talk about why video game companies choose optimal video game monetization strategies from an economic viewpoint. If this historical article is a macro overview of video game monetization, then describing why video game companies economically choose specific monetization strategies will be the micro overview of the evolution of video game monetization.
My next goal is to see why and how monetization practices appear from the viewpoint of the company. I want to dispel the idea that video game companies are inherently bad, but instead to show that video game companies are logically rational towards themselves when conducting business. Companies are inherently for profit unless stated otherwise and whether they benefit the consumer or not is entirely dependent on the business's strategy. Pleasing a consumer base to retain loyal players or quickly draining consumer wallets through expensive gambling systems are both good and bad but it won’t explain why and how a company would eventually choose their monetization strategy or practice. Therefore, providing a different viewpoint from the business side would hopefully make these claims that a video game company is either good or bad to be more grounded and understandable. I aim to look at how a company gets to a result, not the result solely by itself.
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Sources:
Maplestory short video summary from 2005 https://www.youtube.com/watch?v=QPsjbAkPiuI
Maplestory timeline https://www.youtube.com/watch?v=pzTptdQHi5Y
Maplestory JP page from 2004 with returned gachapon tickets https://maplestory.nexon.co.jp/notice/view/1263/
Maplestory Reddit guide 2005 https://www.reddit.com/r/Maplestory/comments/1armg6k/maplestory_2005_guidebook_pictures_info/
Indirect and Possibly Uncertain Source:
Before Maple Story Namu Wiki https://en.namu.wiki/w/%EB%A9%94%EC%9D%B4%ED%94%8C%EC%8A%A4%ED%86%A0%EB%A6%AC/%EB%B9%85%EB%B1%85%20%EC%9D%B4%EC%A0%84#s-9.1.1
