(The) effect of pricing strategies on user satisfaction

Abstract

Digital platforms have introduced business models that are in constant evolution. In the video game industry, monetization tactics such as free-to-play games or games as a service have been growing over the last few years. Various pricing strategies have emerged, including in-app purchases, known as microtransactions, which have sparked controversy and criticism within the gaming community. This research explores the impact of business models on user satisfaction, particularly freemium and microtransactions, by addressing a gap in existing literature, focusing entirely on variables related to pricing and monetization. Microtransactions, more common in free-to-play than paid games, have raised ethical concerns and are associated with controversies such as perceived unfair advantages and gambling-like mechanics, with continuously demonstrated hostility from users. The research, conducted on a sampleof nearly 15,000 games from the Steam platform, the biggest PC gaming platform, aims to understand how pricing strategies impact user satisfaction. The analysis revealed that although the initial price has a positive and significant effect on user satisfaction, the presence of microtransactions has a negative impact. In particular, the negative impact of microtransactions is larger in high-priced games.