GAME DESIGN’S INFLUENCE ON PURCHASE MOTIVATIONS IN : WARZONE Why players purchase goods based on the design of

Johann Young

Bachelor’s Thesis Instructor: Miikka J. Lehtonen Date of submission: 6/4/2020

Aalto University School of Business Bachelor’s Program in International Business Mikkeli Campus

GAME DESIGN’S INFLUENCE ON PURCHASE MOTIVATIONS IN CALL OF DUTY: WARZONE Why players purchase goods based on the design of games

Johann Young

Bachelor’s Thesis Instructor: Miikka J. Lehtonen Date of submission: 6/4/2020

Aalto University School of Business Bachelor’s Program in International Business Mikkeli Campus

AALTO UNIVERSITY ABSTRACT OF SCHOOL OF BUSINESS BACHELOR’S THESIS Mikkeli Campus

Author: Johann Young Title of thesis: Game Designs’ Influence on Purchase Motivations in Call of Duty: Warzone

Date: 9 April 2021 Degree: Bachelor of Science in Economics and Business Administration Supervisor: Miikka J. Lehtonen Objectives The main objectives of this study were to understand the elements of game design that affect the purchases of non-functional in-game content. An additional objective was to focus on the Games-as-a-service business model and how its structure influenced game design.

Summary Games-as-a-service games have become increasingly popular within the industry, with one example of this being the Call of Duty: Warzone. Research has been completed on various aspects of the industry, but not much research has been conducted on the design of games that utilize the Games-as-a-service model. Interviews based on Hamari’s (2015) research model were held to examine purchase influences in players. Results indicated that factors such as enjoyment of the core service, continuous use intentions of the core service, attitudes towards , and subjective norms towards microtransactions all played a role when discussing game designs influence in purchase motivation.

Conclusions Design elements utilized in how content is offered were the most significant factor in game design's influence on purchases, primarily through the creation of artificial scarcity and limited promotion of content. However, design elements, such as the design of the content itself was also considered to influence purchases. Key words: microtransactions, games-as-a-service, game design, virtual goods See: http://web.lib.aalto.fi/en/helevoc/pdf/

Language: English Grade:

Table of Contents

1. INTRODUCTION: GAME DESIGN IN TRANSITION ...... 1

1.1 Background ...... 1

1.2 Research Problem ...... 2

1.3 Research Questions ...... 3

1.4 Research Objectives ...... 4

1.5 Definitions ...... 4

1.6 Structure of Thesis ...... 5

2. LITERATURE REVIEW ...... 6

2.1 Introduction ...... 6

2.2 Video Game Business Models ...... 6

2.3 Microtransactions ...... 10

2.4 Conceptual Framework ...... 14

2.5 Conclusion ...... 15

3. METHODOLOGY ...... 18

3.1 Data Collection ...... 18

3.2 Interview Design ...... 19

3.3 Data Analysis ...... 20

3.4 Research Ethics ...... 21

3.5 Conclusion ...... 21

4. FINDINGS ...... 23

4.1 Perceived enjoyment of the core service ...... 24

4.2 Continuous use intentions of the core service ...... 27

4.3 Subjective norms towards microtransactions ...... 29

4.4 Attitude towards microtransactions ...... 33

4.5 Synthesis of findings ...... 36

4.6 Conclusion ...... 39

5. DISCUSSION ...... 42

5.1 Motivators for in-game purchases...... 42

5.2 Game designs influence on in-game purchases ...... 43

5.3 Influence of GaaS on in-game purchases ...... 45

5.4 Conclusion ...... 45

6. CONCLUSION ...... 48

6.1 Main Findings ...... 48

6.2 Implications for International Business ...... 50

6.3 Limitations ...... 50

6.4 Suggestions for further research ...... 51

Reference list ...... 52

Appendices ...... 57

1. INTRODUCTION: GAME DESIGN IN TRANSITION 1.1 Background Since 2002, the has doubled the revenue of both the music and film industry combined, reaching total revenue of 159.3 Billion dollars in 2020 (LPE, 2019, Newzoo, 2020). For the longest time, publishers in the industry relied on the more traditional business model of pay-to-play, where players would pay a set amount to gain access to the full game (Marchand and Thurau, 2013). The video game industry has begun to focus more on monetization, with new business models replacing the traditional pay-to-play model. How the design of games that utilize these business models motivates players to purchase in-game content needs to be researched.

While the more standard business model of pay-to-play is still used, there has been a significant shift towards free-to-play and games-as-a-service. While these models allow players to access their games for free, various in-game purchases are available for players to buy. These business models have been predominantly successful in the mobile gaming market as most of the games in the top 300 apps in Apple's App Store utilize a free-to-play model (Chua et al., 2019). However, while mobile gaming is where the models found their initial success, they have also implemented them in AAA games. The ethics of the purchases offered in these business models have been put into question by researchers such as Heimo et al. (2016). However, some argue that they are offered for players with less time to play (Nieslsen, 2018), while others find them unethical for players who do not buy them (Hamari et al., 2017). Nonetheless, the implementation of free-to- play and GaaS models has been successful and continues to appear within the industry.

In-game purchases, better known as microtransactions, can be classified into two categories: functional or non-functional (Chua et al., 2019). Functional microtransactions are items that directly affect the gameplay of a game by either speeding up progression within the game or increasing a player's attributes (ibid). Non-functional items, better known as cosmetic items, do not affect how the game is played and are simply there to change a visual aspect of the game, be it the player's avatar or their environment (ibid).

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For this thesis, there will be a focus on non-functional cosmetic microtransactions, and the methods game developers take to promote the purchase of such items.

Within the past few years, there has been an increase in Battle Royale games, where one-hundred players enter a map that gets smaller till one player or team is left standing, with one of the more popular titles being Call of Duty: Warzone. The game utilizes the GaaS business model and offers various cosmetic items and the ever-popular system. This thesis will analyze Call of Duty: Warzone and determine how the game's structure motivates purchasing cosmetic items to see how game design affects players' purchase motivations.

1.2 Research Problem Thorough research has already been conducted within the video game industry and its various business models (Davidovici-Nora, 2013, Alha et al., 2014). However, when it comes to how the design of games that utilize the GaaS business model influence purchases, little direct research has been accomplished. It should be stated that research done on the free-to-play business model research can be applied to games-as-a-service. Hamari et al. (2017) studied the purchase motivations of in-game purchases, with Hamari's (2015) earlier work viewing the relationship between game enjoyment and in- game purchases. Additionally, Mäntymäki and Salo (2015) focused on why teens purchase virtual goods in video games. These researchers looked at in-game microtransactions, focusing on both functional and non-functional, or one specifically. Many of the research conducted found similarities with purchasing behavior in players and had some contradicting findings. These contradictions being Mäntymäki and Salo's (2015) findings of players preferring non-functional in-game items and Chua et al.'s (2019) findings of players preferring functional in-game items. Most of the research was published within the past five years, trends have changed, so have the implementation of in-game purchases. As the video game industry continues to grow and changes are made to its business strategies, so should the industry's research findings.

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Researchers such as Chua et al. (2019) investigated the consumer preference of microtransactions, primarily on whether they prefer functional or non-functional in-game content. While this study focuses on gaming, analyzing the types of games people play and their subsequent purchasing habits within such games, many like this study focus on specific genres of games. Little research has been conducted on the new sensation of Battle Royales, and researchers have mainly ignored systems such as the Battle Pass. The genre itself and the growing implementation of Battle Pass systems across the industry are popular among consumers, and research into how these systems influence players' purchasing behavior should be organized. Moreover, as industries, especially the gaming industry, continue to change, it is essential to see what keeps players captivated to a title and how in-game content and systems like the Battle Pass can increase player retention.

The standard method of data collection conducted by gaming industry research has been quantitative data collection methods. Data was collected primarily through surveys, which can produce unreliable data, as respondents may not be as forthcoming about habits that may be perceived as unfavorable (Duffy et al, 2005). For this thesis, a qualitative approach to data collection was chosen to gain a more in-depth look at consumer behavior.

1.3 Research Questions The research questions were designed to address the research problem of this thesis. These research questions were asked to see how the design of games inherently influences the purchase of in-game content through perceived value:

1. What are the purchase motivations for in-game content?

2. How does the design of games influence the purchase of in-game cosmetic items?

3. How has the GaaS business model influenced the purchase of in-game cosmetics?

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Answering these research questions will allow for a clear insight into the solution of this thesis's research problem and explain how game design influences the purchase of microtransactions.

1.4 Research Objectives The research objectives were chosen to support the research that this thesis is trying to achieve. Furthermore, these objectives were chosen to produce pertinent research questions to support the thesis's theories. The research objectives set for this thesis are:

1. To identify game design elements that affect players purchase motivations for in- game microtransactions.

2. To identify how the GaaS business model influences players to continue playing after a game initial launch as well as supports the purchase of in-game purchases.

3. To understand how perception of in-game content affects the purchasing of in- game content.

These objectives will aid in finding how game design elements influence consumer behavior within free-to-play or games-as-a-service titles and understanding what affects player's in-game purchasing decisions. The objectives will also help see how the perception of microtransactions affects the purchase intentions of in-game purchase decisions.

1.5 Definitions Free to Play - The Free to play model or model is where the player gets the game for free but have multiple options of in-game purchases in the form of microtransactions. (Tomić, 2017)

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Games as a service - A model of free-to-play games that allows developers to release a game for free with the promise of balancing game mechanics and features past the initial launch of the game. (Alha et al., 2015)

Microtransactions – Microtransactions are any content purchased within a game. These purchases often come in the form of functional or nonfunctional item purchases. (Call and Fordham, 2018)

Call of Duty: Warzone – A battle royal which players try to be the last player alive by the end of the game. Like other games of the genre it offers a large catalogue of cosmetic items. (Activision, 2020)

Battle Pass – A Battle Pass is reward system where player have the chance to unlock cosmetic items as they progress through various levels. (Petrovskaya and Zendle, 2020)

1.6 Structure of Thesis The structure of this thesis is as follows. Next is the literature review, and it will discuss previous research related to this topic and their findings. The methodology section will then explain the data collection methods used for this thesis's primary data. Then, the findings section will analyze the results from the primary data collected. After that, the discussion section will take the primary data results and link them to previous research around the topics introduced in the Literature review. Finally, the conclusion section will conclude the thesis by discussing the findings, how it relates to international business, and make suggestions for further research.

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2. LITERATURE REVIEW 2.1 Introduction The purpose of this literature review is to shed further light on how game design itself creates motivation for various forms of monetization and the growing popularity of the GaaS business model. Sources related to video game business models, microtransactions, and purchase motivations have been amassed for critical analysis to unfold correctly.

Studies focusing on value creation, game design, and the GaasS business models’ use in games play an essential role in this paper. They will lead to the overall structure of the conceptual framework of this thesis.

2.2 Video Game Business Models The video game industry is one of the biggest industries globally, reaching a $159.3 billion value in 2020, a 4.7% percent increase from 2019’s $152.1 billion. The popularity of the market also continues to grow, with more than 2.7 billion gamers worldwide (Newzoo, 2020). The market itself even continues to diversify the various means for enjoying the content developers make through consumers' phones or computers (Figure 1). The video game market's attractiveness has been growing for the past 20 years, with Marchand and Thurau (2013) highlighting various industry factors. Mainly, the wide variety of ways to play and the large volume of content that can be consumed each year (Marchand and Thurua, 2013). Though, within such a large industry, there are bound to be different business models to promote the content developers create.

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Figure 1. 2020 Global Games Market Per Device & Segment with Year-on-Year Growth Rates (Newzoo, 2020)

Marchand and Thurau (2013) present some of these models, with the more traditional business model being that of pay-to-play. This model has consumers buying the game at a fixed price allowing the consumer unlimited playtime on their console or computer. However, Tomić (2017) states that there has been a growing shift towards the free-to- play models in recent years. Free-to-play allows consumers to play the game for free, though with different methods of additional payment depending on the type of game. While Marchand & Thurau (2013) mentioned such a model, they focused on Free-to- play’s freemium counterpart, which Davidovici-Nora (2013) defines as consumers getting a free version of a game with full access to the game requiring an additional payment. Davidovici-Nora (2013) also continues by saying free-to-play games are developed with monetization in mind to make sure that the design of gameplay and monetization work together. This methodology has shown its potential, with free-to-play games generating $77.2 billion in revenue in 2020, accounting for 48% percent of the global market (Figure 1). Moreover, Chau et al. (2019) call to attention that most of the top 300 applications in

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Apple’s App Store have adopted the free-to-play model. While this model has been proven to be successful, Davidovici-Nora (2013) presented key motivations to switch:

1. To continue the life cycle of an intellectual property 2. To boost the number of players after a failed launch 3. To allow for more casual players to enter an already established player base 4. To obtain more business and financial opportunities for an already successful franchise (Davidovici-Nora 2013)

Alha et al. (2014) reinforce such claims stating the main two reasons to switch to a free- to-play model are flexible price points for players and allowing complete access to the game. Davidovici-Nora’s (2013) first motivation, increasing the life cycle of intellectual properties, has led to developing a new business model within the industry, GaaS.

GaaS, as described by Alha et al. (2014), is a model of free-to-play games that allows developers to release a game for free with the promise of balancing game mechanics and features past the initial launch of the game. Though the format has not seen much scholarly research, the model itself is highly relevant to the industry today. Many games within the industry have adopted this model, such as the popular MOBA (Massive online battle arena) (hereinafter LOL) by . As Josh (2020) observed, through interviews with LOL players, consumers are content with the model as it is something that allows them to continue their enjoyment even after 1000s of hours of play.

“To me league is my primary form of entertainment. I don't pay for cable tv or anything like that which means purchasing RP [Riot points] could be looked at as my "payment" or "subscription" in order to play league. I don't feel obligated to purchase RP but it makes the game that much more enjoyable for me. I have also been playing for the last 4 years and spent over $1000 on the game. While that is a tremendous amount, if you calculate out the money spent/hour played, the cost is actually really

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low. Maybe that is just me justifying it but seeing as I play multiple games every single day, it's worth it to me.” (Josh 2020)

While the model has proven to be successful, Harhulati (2017) sees the GaaS design primarily as a platform for e-sports (Electronic sports) and live streaming, which has also started to be a significant focus within the industry. As stated by Davidovici-Nora (2013), free-to-play and, to the same extent, GaaS is designed with monetization in mind. While the games are free, they offer various ways for consumers to spend money depending on the developer's design. These models' reasoning comes from the idea that the purchasing of small in-game content will create greater profits than an initial base price for the game. One popular example of this can be seen in figure 2 with the game Call of Duty: Warzone by Activision.

Figure 2. Cosmetic bundle in Call of Duty: Warzone’s shop (Activision 2020)

Call of Duty: Warzone offers players cosmetic packs (figure 2) that do not offer changes to the way the game is played. The players purchase cod points, Call of Duty: Warzone’s in-game currency, with real money to buy these skins. This format for monetization is known as microtransactions, one of free-to-play and GaaS’s most

9 lucrative monetization forms. Since the industry itself has shifted more towards these business models, microtransactions have also adapted. The following section of this literature review will cover the history of microtransactions and their overall perception within the video games industry.

2.3 Microtransactions Call and Fordham (2018) define microtransactions as in-game purchases that unlock content for a game with prices varying from .99 cents to hundreds of dollars. The authors argue that microtransactions within their context do not describe small monetary transactions but rather small content purchases. In contrast, Tomić (2018) defines microtransactions with the more traditional definition of small monetary purchases instead of small content purchases. Research by Hanner and Zarnekow (2015) calls attention to its initial origins back to the early 2000s with real money trading for virtual items. Ho (2014) even highlights the continuation of such transactions with Blizzard entertainments 2012 action-rpg Diablo 3, where players could buy and sell virtual goods while the games company takes a small transaction fee from player transactions. According to Švelch (2017), traditionally, full-priced developers and publishers adopted microtransactions as an alternative source of revenue through market convergence.

Aside from its origins as virtual goods being sold between players, microtransactions have come in many forms, such as subscription fees and expansion packs (Švelch, 2017, Hamari and Lehdonvirta, 2010, Chua et al., 2019). Nevertheless, Microtransactions shifted for the purpose of speeding up the process of games for those who have less leisure time as according to Nielson (2018). In some cases, this use of microtransactions has been used to gain a competitive advantage, or pay-to-win, over other players, which is deemed unfair by Hamari et al. (2017). This is further supported by game professionals who see a pay-to-win model as bad game design (Alha et al., 2014).

Hamari et al. (2017) state that service developers have faced a dilemma when balancing high-quality service with creating sufficient demand for the premium microtransactions that augment the core service. Within Hamari’s (2015) earlier work, he introduces the fact

10 that when players are enjoying the service, they are less likely to spend real money on items that augment their experience. In order to urge players to pay for the service, developers have created artificial obstacles. Hamari et al. (2017) investigated why players play freemium games but not if they go premium, which supports the claim that a strong core service does little aside from player retention with no strong correlation between good service leading to the purchase of premium content. However, such practices have even been put into pay-to-play games such as Starwars battlefront 2, which has now adopted a GaaS business model, and ’s Assassins Creed: Origins, which saw player-driven backlash (Ball and Fordham 2018). Ball and Fordham (2018) draw attention to such agnostic game design and how it should not be underestimated as it can have a substantial impact on sales of a product. Heimo et al. (2016) went as far as to say, ”Looking at digital game business logic design from a purely Aristotelian virtue perspective makes almost all the monetization options seem somewhat unethical and calls into question the nuances of going against player desires”. Their view on the market is not clear cut; the concept of implementing game design elements for the sole purpose of creating revenue has been a heavily talked about topic, as seen with the backlash of many AAA titles. Nevertheless, what structures within game design promote player purchases of in-game content?

Švelch and Van Roessel (2019) interviewed game industry leaders to grasp what roles emphasize microtransactions within video games, with findings proving an overall integration for monetization throughout all aspects of creation. Even so, Ho (2014) argues through the process of creation and adjustment; value can be created through game design, primarily through game mechanisms in the form of functionality and aesthetics. By creating commercial value through game design, functional microtransactions can lower players' necessary effort alongside aesthetic microtransactions to create stronger relationships with the purchased player goods. Contrastingly, Hamari (2010) found that marketing tactics in game design contexts lead to purchases within games: item degradation, inconvenient gameplay elements, in-game mediums of exchange, inventory mechanics, special promotional occasions, artificial scarcity, and alterations to existing content. Moreover, Hamari (2010) highlighted the importance of the players' appearance

11 and items' functionality as an essential mechanic similar to Ho (2014). While game design has been shown to influence in-game microtransactions, consumers themselves also have their motivations for such purchases.

Hamari et al. (2017) present six dimensions for reasons players purchase in-game content: Unobstructed play, social interaction, competition, economical rationale, indulging children, and unlocking content. Of these six, unobstructed play, social interaction, competition, and economical rationale presented a more concrete association to players' purchase motivations. With these motivations in mind, Wohn (2014) and Mäntymäki and Salo (2015) found that players who tend to spend the most on in-game transactions tend to primarily buy items with no functional value aside from decorative to enhance social presence within the communities in virtual worlds. Adversely, Chua et al. (2019) found that many players prefer the functionality over cosmetics when it comes to microtransactions. Another perspective is taken by Hanner and Zarnekow (2015), who saw the longer player retention of the game was kept, the more likely they were to spend on the game compared to those who only played for a limited time.

Following Wohn (2014) and Mäntymäki and Salo’s (2015) findings with cosmetics shed light on the recent success of battle royale games such as , Electronic Arts Apex Legends, and Activision’s Call of Duty: Warzone, which feature purely cosmetic items. With a focus on Fortnite, Chua et al. (2019) found that players intend to improve their appearance through in-game purchases because these adornments create individuality and uniqueness in their gameplay. However, unlike Wohn (2014) and Mäntymäki and Salo (2015), Chua et al. (2019) found that these purchase motivations were with the intent of standing out compared to belonging to a community. Battle royal games have even created a strong following on streaming platforms and . These mediums have managed to create another motivation for in-game purchases with influencers. YouTube playthroughs and Twitch livestreams have been a growing medium, with the Twitch platform accounting for 40% of live streaming traffic in 2014 (Fortney 2014). King and Hera (2020) found that these entertainers create an inspiration to play and are endorsers to gamers. In turn, their content presents cosmetics

12 they use as giving social status and promoting new game mechanics and strategies. These same influences can be seen with other battle royale games, with the games themselves promoting the purchase of microtransactions with systems such as the Battle Pass seen in the figure below.

Figure 3: Call of Duty: Warzone Battle Pass (Battle Pass Call of Duty.com)

Battle royale games such as Epic Games Fortnite, Electronic Arts Apex Legends, and Activision’s Call of Duty: Warzone follow Alha et al.’s (2014) definition of GaaS, a free initial download with the promise of future updates. Each game offers in-game cosmetic microtransaction as well. However, the Battle Pass systems implementation in their games creates an additional layer to their monetization system by having players pay for the pass with in-game currency. Petrovskaya and Zendle (2020) define Battle Passes' core design as “a form of monetization in which players exchange money for the time- limited opportunity to gain additional in-game content as a reward for playing a game, rather than exchanging their money for specific content itself.” To unlock the Battle Pass's content, players progress through tiers, as seen in figure 3, to unlock progressively better cosmetic items. These systems generally run through seasons where the Battle Pass

13 lasts for a limited time until the next season starts providing new content. Petrovskaya and Zendle (2020) highlight that these systems have created a level of elitism with players higher in the Battle Pass, presenting them as superior to those lower. However, there is an overall positive engagement, with many players seeing the rewards as attractive. Cropp (2018) adds to the notion of positive engagement because the Battle Pass makes the players more inclined to continue playing as it creates an added intrigue to the game with the renewal of content. These Battle Pass systems follow Hamari’s (2010) mechanics for the desirability of virtual goods by creating a medium of exchange with in-game currency, special occasions, and alterations to content with new seasons. These create a flowing life cycle where the game develops, and new content is created for the players through new content releases as described by Alha et al.’s (2014) definition of GaaS.

Microtransactions have been a part of the video game industry for some time and have come in many forms, from season passes to virtual item bundles. In recent years, a focus on promoting microtransactions has received adverse reactions from consumers and media alike (Ball and Fordham 2018). A switch to purely cosmetic in-game content has led to the design of games not to require the purchasing of microtransactions but to promote it, with Hamari (2010) presenting some mechanics that are actively implemented into games that follow the GaaS business model. Little research has been done into games such as Call of Duty: Warzone to see the drivers that promote purchases and how consumer's perception affects purchasing habits. This paper's conceptual framework has focused on how game design and perception of in-game purchases influence consumers to fill this gap.

2.4 Conceptual Framework The figure below showcases the conceptual framework used for the purpose of this thesis. This research model was chosen due to its focus on how the perception of in- game purchases and the design of the games influence consumers' purchase intentions..

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Figure 4: Hamari (2015) research model for purchase motivation

For this thesis's conceptual framework seen above, Hamari's (2015) research model will be utilized to determine the drivers for purchases of microtransactions with the game Call of Duty: Warzone as the primary focus. The framework highlights the divide of attitudes and beliefs towards in-game content and the enjoyment and continuous use of the game as the drivers for purchase intentions. The subjective norms and the attitudes toward purchasing allow for a user perspective of microtransactions and how such feelings can lead to purchasing in-game content. At the same time, perceived enjoyment and the continuous use intentions allow for an understanding of how the core service can lead to purchasing goods through the game's overall design. This framework will help answer the research questions by showing how the flow of game design and consumer's view of microtransactions can lead to virtual goods purchasing.

2.5 Conclusion The video game industry has been growing exponentially in the last 20 years with revenue and market size. In reaction to this growth, the design of games and their business models have changed from the more traditional pay-to-play business model, which sees consumers paying the total price for a game to play it on their respective way to play.

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Many developers have utilized the GaaS business model in recent years instead of pay- to-play because, as Davidovici-Nora (2013) stated, more revenue can be created from continuous in-game content purchases than a single initial purchase of the game itself. This format allows for the developers to give continued retention to the game through the promise of balancing game mechanics, new features, and content well past launch (Alha et al. 2014). The overall design of the games even enforces the purchasing of new content in the form of microtransactions. These microtransactions come in two forms, functional and non-functional.

Functional microtransactions are classified by being able to give players an advantage through the purchasing of the item. Nielson (2018) stated that such microtransactions were created for players who have less leisure time and wish to speed up the gameplay process. However, the use of microtransactions that give a competitive advantage or pay- to-win has been deemed unfair by researchers such as Hamari et al. (2017). Many have even focused on designing games to enforce players' purchases of such items, which has been stated as lousy game design or even unethical (Alha et al., 2014, Heimo et al., 2016). The backlash from such game design has even lead games such as Electronic Arts Battlefront 2, which was initially a pay-to-play game, to adopt a GaaS business model. Now many game developers have switched to a primarily cosmetic approach to microtransactions.

Non-functional microtransactions provide no other effects aside from changing the appearance of players within a game. These generally come in the form of skins for player models or other additional visual modifications. Wohn (2014) and Mäntymäki and Salo (2015) found that those who spend the most money on microtransactions tend to buy purely cosmetic items rather than those that give some function in gameplay. Reasons for buying cosmetic goods differ; some see it as promoting individuality through self- expression. Some see it as a form of elitism within the community, while others site societal aspects, such as belonging in a group.

Various reasons for buying in-game content have been discussed for both functional and cosmetic goods. Hamari’s (2010) earlier work presented mechanics such as a medium of

16 exchange with in-game currency, special occasions, and alterations to content as motivators for such goods' desirability. Hamari et al.’s (2017) findings presented four dimensions that support player purchase motivations: unobstructed play, social interaction, competition, and economical rationale. Altogether, these factors influence players to purchase content through various motivations. These findings highlighted social and in-game motivations as standard practices within the industry for making purchases.

Call of Duty: Warzone is one of the biggest free-to-play battle royal games seen within the industry, with gameplay in the same vein as Fortnite. The battle royale dynamic is that 100 players land into a playable arena where they must collect equipment to be the last one standing in a continuously shrinking player area. The game's business model relies solely on the purchasing of the Battle Pass system and cosmetic bundles. The game's success has been equated to its Battle Pass system, which offers players a limited time to gain various in-game content rather than buy it separately. (Petrovskaya and Zendle, 2020) Although there has been an abundance of research conducted for purchase motivators within video games, little research has been done for the implementation of such models within exclusively cosmetic sales.

Hamari’s (2015) research model of purchase intention for in-game content was chosen for this thesis's conceptual framework. These intentions set the foundation for this thesis's interview questions, which will be analyzed in the following section.

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3. METHODOLOGY Primary data was collected for this thesis. Hamari's (2015) research model was utilized for this thesis's conceptual framework, and the interview questions for the primary data were created with this framework in mind.

As many studies related to this topic completed quantitative data collection methods, and with this thesis's nature being consumer-specific, qualitative data collection was chosen. Choosing the qualitative method allowed for a greater understanding of interviewees' purchase motivations and was subsequently seen as the preferable option (Chrysochou, 2017, Rogers et al., 2016, Hussain and Griffiths, 2009).

3.1 Data Collection Interviewees were gathered based on convenience sampling since I knew each participant before beginning the thesis process (Taherdoost, 2016). Each participant was contacted through means such as WhatsApp and Discord. For this study, it was confirmed that each participant had played Call of Duty: Warzone, as it is the focus of this thesis. Four interviews were done with players who had bought in-game content, and another four were done with players who had not bought in-game content. Eight interviews were conducted in total and held primarily through Zoom, apart from one being held through Discord. Each was recorded for further analysis and transcription. The calls were done through these mediums to avoid contact during the Covid-19 pandemic. While in-person interviews were not conducted, cameras were enabled to establish a connection between the interviewee and the interviewer. Table 1 below demonstrates the demographic of the selected sample.

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Table 1: Sample of study Participant # Age Gender Nationality Content Purchase 1Y 21 Male Finnish/American Purchased 2Y 20 Male Finnish Purchased 3Y 21 Male Finnish Purchased 4Y 20 Male Finnish Purchased 5N 21 Male Finnish/German Not purchased 6N 21 Male Finnish Not Purchased 7N 21 Male Finnish Not Purchased 8N 20 Male Finnish Not Purchased

A semi-structured approach was taken for the interviews with the sample of the study. This approach allowed the interviewees to give more in-depth responses to the questions, allowing them to engage more in their responses, generating more usable data. More in- depth responses were crucial for this process as seeing the difference between those who had and had not purchased content, as seen in the table above, was necessary for data collection. The semi-structured approach also allowed the interviewer to treat the interviewee as a knowledgeable individual, allowing for more significant responses than initially prompted by the interviewer (Goia et al., 2012). These responses allowed free discussion of their experiences and attitudes on the subject. Through these semi- structured interviews, more data was gathered on how game design and overall perception of in-game content led to purchase intentions.

3.2 Interview Design The interviews consisted of 24 questions, all of which were derived from Hamari's (2015) framework. Initially, Preliminary background questions were asked, such as the interviewee's name, age, and gender. Following the preliminary questions, questions 4-7 aimed to see the relationship the interviewees had with video games and Call of Duty: Warzone, specifically their enjoyment of the game and reasons for continuous use. Questions 8-14 focused on the interviewee's attitude towards microtransactions, if they had purchased any in-game content, and what lead them to either buy or not buy offered

19 content. To see the interviewee's subjective norms towards the microtransactions offered in Call of Duty: Warzone, questions 15-22 were asked. These questions specifically focused on systems like the Battle Pass, the perceived value of the cosmetics offered, and if other player's cosmetics affect their view towards them. Finally, questions 23 and 24 aimed to see how regular promotion of in-game content affected the interviewee and then what, in their opinion, was the most significant issue the game faced. These were asked to gauge if available microtransactions were promoted vigorously and if that was the biggest issue seen by the interviewees. Altogether, these questions, due to the semi- structured approach, allowed the interviewer to gain more data than initially prompted to the interviewee.

3.3 Data Analysis The Gioia method (Gioia et al., 2014) was chosen to be the data analysis method for this study. After a rigorous transcription process and carefully reading the transcribed interviews, the interviews' data were interpreted, and commonalities between responses were identified. These commonalities lead to the creation of four themes that represented how the overall game design of Call of Duty: Warzone and views on microtransactions either lead or did not lead to purchasing in-game content. The coding scheme in Table 2 below presents the coding scheme used for the conducted interviews.

Table 2: Code scheme emerging from the interviews First order concepts Second order concepts - If it doesn’t give others an advantage, I’m fine Opinion of microtransactions with it. - I don’t like to spend money on things like that. - I didn’t make a purchase because I didn’t like View of offered content what was offered. - I think players who have bought content have a certain level of skill.

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- I like it because it was more refined than other Enjoyment of game titles. - It didn’t evolve fast enough with the player base. - I kept playing because every game was different. Continued play of game - Being able to play with friends led me to play more.

As seen in Table 2, there were four themes found during the transcription process. These are opinion of microtransactions, value of offered content, enjoyment of the game, and continued play. These themes were then analyzed and compared to the secondary data collected and discussed in this thesis's literature review section. Comparing the collected data with the research already completed helped distinguish both the similarities between how game design influences in-game purchases from previous research and their contradictions. Subsequently, the cause of these similarities and differences were explored, thus completing the data analysis for this thesis.

3.4 Research Ethics The research ethics established by Aalto University were followed during the thesis process. To ensure this was accomplished, all research subjects were informed they were taking part of a study and all were asked for their consent for the use of their interviews in this study. Total anonymity was given and an opportunity to be withdrawn from the study if requested by the subject. The research was also conducted responsibly as according to Aalto University's Code of Conduct. The used research was cited correctly to ensure the authors of the research and studies used in this thesis received their deserved credit. I, the writer of this thesis, take full responsibility for acquiring related research and the standards set by both the university and the research community.

3.5 Conclusion This concludes the methodology section. Firstly, primary and secondary data was collected for use in this study. Secondly, Hamari's (2015) research method for purchase intentions was used to examine how game design and view on microtransactions lead to

21 purchase intentions. Finally, a qualitative approach was chosen, and semi-structured interviews were conducted as they gave a more in-depth analysis compared to its quantitative counterpart.

Interviews were conducted through convenience sampling, as each interviewee was selected due to experience with this thesis's topic. The already established connection between interviewer and interviewee allowed each interview to be organized through Zoom, except for one held through Discord. Altogether eight interviews were completed, all interviewees were male, Finnish, and all were either 20 or 21 years old. Semi- Structured interviews were completed to collect more in-depth data and allowed the conversation to lead into otherwise undiscussed fields.

The interview conducted for this thesis consisted of 24 questions, divided into five different sections. First, the interviewees' background information was collected to see their relationship with video games and their relationship with Call of Duty: Warzone and its respective in-game content. The rest of the interview was broken into various sections to see the interviewees' views on this thesis's various topics. Questions 8-14 looked at the interviewee's perception of microtransactions and what led them to either buy or not buy Call of Duty: Warzones in-game content. The two sections following, questions 15- 17 and questions 18-22, viewed how the Battle Pass and related skins affected their experience. Finally, questions 23 and 24 gauged how rigorous microtransaction promotions affected their view on the game and what they perceived as the most significant flaw of Call of Duty was: Warzone. The Gioia method was chosen to analyze the responses to these interviews as it was seen as the best way to interpret the data.

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4. FINDINGS Four dimensions for purchase intentions were based on Hamari's (2015) research model. The first dimension analyzed from the interviews is that of perceived enjoyment of the core service. The perceived enjoyment of the game can increase the likelihood of purchasing content offered within the game and subsequently lead to the second dimension of the findings, which is the continuous use intentions of the core service. Continuous use intentions of the game can ultimately lead to increased exposure to in- game content and those who have purchased said content. As Call of Duty: Warzone is a multiplayer-focused game, players are continuously exposed to other users. This exposure is covered in the subjective norms towards microtransactions portion of the findings. Subjective norms for the purpose of this study look at the users' perception of those who have purchased content, friends, or other players and how such interactions affect their view of the in-game content. The fourth and final dimension of the findings is attitude towards microtransactions. A consumer's overall perception of a product can significantly influence if they are willing to complete a purchase in any medium, and the same applies to video games. One of these dimensions alone did not influence purchase intent. The figure below represents a visualization of the findings and how these dimensions ultimately lead or did not lead to the purchase intentions of the participants. This visualization will continue to change during the process of the findings.

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Figure 5: Uncomplete visualization based on Hamari’s (2015) research model

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In many cases, two or more dimensions in the figure above lead to purchases. The same can be said for those who decided not to purchase content. Therefore, the following section will look at the dimensions separately, concluding with an amalgamation of the findings and how they lead to purchase intent. From the eight interviews collected, four did purchase content and are represented with solid lines and the four who did not are represented with dotted lines. To differentiate the participant's responses, Y is associated with participants who have purchased content, and N is associated with those who have not.

4.1 Perceived enjoyment of the core service One common theme found through all the participants was the fact that they had been playing video games for several years, some even starting to play games when they were as young as five years old, with many of them finding them as a good pass time when there is nothing to do. Both participants who either had or had not made in-game purchases had stated similar statements as the two examples below:

“I mean, I've been playing video games for a pretty long time, like a pretty big part of my life. It's a way to escape from stress. And it's a way to, you know, connect with friends and have fun. I see it as a leisure activity.” - Participant 1Y

“it is a hobby and a leisure activity, a good way to spend time when you have nothing else.” - Participant 8N

Each participant had years of experience with playing video games and playing various genres. Such experience aided in their understanding of the medium, paralleling their understanding of the quality of games. Participants held Call of Duty: Warzone to a higher standard than similar games on the market, with an overall positive experience associated with the title.

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“I did, I think that it was a lot more refined in terms of the whole battle royale scene. I think that compared to other games like Player Unknown’s Battlegrounds1… there were no minor glitches, or basically no glitches and everything worked well. And all my friends said the same thing” - Participant 1Y

The Battle Pass system is a crucial feature in games such as Call of Duty: Warzone, and Participant 5N offered a look into how their enjoyment of the game ultimately lead them not to purchase the Battle Pass offered by the game.

“‘if the game itself without Battle Passes, wouldn't really give you any of those incentives to like, play it and unlock new things that either make you look better or even give you a competitive advantage, then I would say it's probably worth it to buy a Battle Pass just if you if you enjoy the game overall… but if the game is good, or interesting enough without Battle Passes, I don't necessarily see any extra value purchasing.” – Participant 5N

While the title was held to a high standard between both groups of participants, both groups did have some issues that caused them to feel frustrated from a technical standpoint. The issue is an abundance of hackers within the community due to the lack of an anti-cheat system being implemented into the game.

“Well, I guess like it just didn't evolve fast enough with its player base. They definitely didn't implement an anti-cheat system early enough and I still don't think they have one.” - Participant 2Y

“The reason why I stopped playing warzone for a while was because I usually played with people that were playing on PC, even though I play on console. And on PC, there is a decent amount of people that are hacking the game… and when you get killed by hackers all the time, it's not fun anymore.” - Participant 5N

1 Player Unknown’s Battlegrounds is a battle royale game released in 2017 (Choi & Kim 2018) 25

While many found hackers as the main problem facing the game, two participants found that the game's overall balance came into question with the release of new content. One participant highlighted the release of 'Call of Duty: Cold War' (a standalone title that had content integrated into Call of Duty: Warzone) being the main issue.

“I feel like it’s always going to be an issue but the balancing issue when they release new stuff. I think it's every season when there's like a new gun they always have to adjust it a little” - Participant 7N

“Just the poor weapon balance that they had. You couldn’t unlock all these weapons if you had not played Call of Duty: Cold War before. So, there was that like, slight pay to win element there. You know? Like, if you only played Warzone, you were at a big disadvantage.” - Participant 3Y

From the participant responses, perceived enjoyment was merely seen as a reason for continuous use intentions. These findings are represented in the figure below.

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Figure 6: Findings of perceived enjoyment of the core service visualized.

Overall, participants from both groups found the experience provided by Call of Duty: Warzone enjoyable. Each participant found video games to be a form of leisure activity done in their free time, and Call of Duty: Warzone was yet another entry to the media consumed by them. Many stated that the overall game had a higher quality than others within the genre but found hacking and gameplay balances as the main issue plaguing

26 the experience. A unique response came from Participant 3Y, who stated the game gained a pay-to-win feeling with the addition of content from the Cold War update since players of the standalone title got immediate access to new weapons upon release. Participant 5N's statement about the game's overall enjoyment being enough not to purchase the offered in-game content did show a particular reason not to purchase based on enjoyment of the game (Figure 6).

4.2 Continuous use intentions of the core service Continuous use intentions of the game yielded interesting results as participants who had and had not purchased content called to attention the constant release of new features to the game as their reason for playing. This aspect of the game kept the game "fresh", according to participant 4Y. However, Participants 1Y, 5N, and 7N had other continuous play factors, supplementing the consistency of updates.

“I feel like the reason I kept playing was because every single match I played felt like a different experience. It was unique. So, like, it didn't get boring, I guess is what I'm trying to say.” - Participant 1Y

“I think like the most fun part about it is that you're able to play with people that have different consoles or playing PC. So, you get to play with people that you weren't able to play with before, because cross play between different consoles and PC was not enabled in other games.” - Participant 5N

“The initial thought of it being free, is like a big factor on it. And then I have a couple of friends who play, who I haven't been in too much contact without playing Call of Duty. So, there's definitely the social aspect.” - Participant 7N

Participant 1Y's approach ultimately highlights the gameplay loop of the game; each player starts at a different location of the map at the start of the game, as one of their primary reasons for continuous play. This gameplay loop is ultimately a staple of the battle royale genre, with each match creating a different experience. Participants 5N and 7N

27 found the game's social aspect as their motivation, with 5N emphasizing the game's cross-play functionality. Participants 5N's notion of cross-play functionality brings a compelling dimension for social interactions between users. The Battle Passes influence on continuous play was also heavily discussed during the interviews, with many participants underlining the further progression the system adds to the game.

“The reason I bought the Battle Pass was because I was so into the game, I was playing it a lot, and since the Battle Pass kind of requires you to play to get the rewards. I thought that it was justified because I knew that I would be getting the rewards because I was playing it a lot.” - Participant 1Y

“I mean, it just depends on if I think I'm really going to be playing this game for a while I might as well put in a little extra money because I got the game free, so I figured you know might as well spend a little and maybe get some more enjoyment out of it” - Participant 2Y

“I think it's a lot to do with like progression because basically, that's another set of progression that you can buy into the game. And while a lot of things there don't affect the gameplay, but it gives the player a sense of like accomplishment - Participant 7N

“I think the Battle Pass just sends the message to the consumer that the company is planning to add more content constantly and develop the game. Like if you're going to release a Battle Pass it usually means that you're going to keep improving and updating the game. Like some of the games just dropped the game and they're done with you know, and the Battle Passes is usually like a commitment the game's future. So I think that's more value to the experience itself, because, you know, it's going to continue for a while like warzone has now.” - Participant 4Y

Conclusively, both groupings found that the Battle Pass system creates an additional layer to the game. Those participants who had purchased content stated a higher incentive to continue playing, and the participants who had not equated this action to the

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Battle Pass's progression system. Participants 1Y and 2Y specified the reason they purchased the Battle Pass was because they knew they would be playing a lot and could subsequently progress through the Battle Pass at the same time. Their reasoning for purchase materializes the possible reason many potentially purchase the Battle Pass. They see the inherent value added from the system offered, especially if the player sees themselves playing the game for an extended period. Moreover, Participant 4Y's response was unique, citing the message the Battle Pass gives to the consumer. Their response provided an insight into what consumers can take away from an offer such as the Battle Pass. The progression added to the game by the Battle Pass was one of the primary reasons for continued play from those who bought in-game content (Figure 7).

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Figure 7: Findings of continuous use intentions of the core service visualized.

Nevertheless, as Participant 5N stated earlier there enjoyment of the core service was enough, which can be equated to the primary reason for not adding the Battle Pass to their continuous play even when seeing the value, it adds to the experience (Figure 7).

4.3 Subjective norms towards microtransactions This study's subjective norms focus on how the players perceive the value of in-game content and those who have either purchased or not purchased content within Call of Duty: Warzone. Skins and are a strong focus for games such as Call of Duty: Warzone and its player base as the Battle Passes primary value is derived from the skins presented

29 in it. Participants who did purchase content saw this as the one main reason for buying the Battle Pass.

“Actually, whenever I would purchase Battle Passes, I first always look at the last rewards you get, because obviously, those are going to be the best ones. And if a Battle Pass didn't have something that I found attractive, I wouldn't be that interested in buying it.” - Participant 1Y

“I've skipped the Battle Pass just because I didn't like any of the skins that were in it. I just didn't see like the point necessarily.” - Participant 2Y

“I'd say definitely, yes 100%, say like, in any other game if it's something like the Battle Pass, if it's something that's only once and it won't come back, and you like it your way, I'd say at least I'm way more likely to purchase it like right then and there, because I know it's not coming back.” - Participant 3Y

“In the Battle Pass, if you play a lot, and you get top end items, those are more rare. And that really is the goal, when you buy the Battle Pass and get those items so i'd say the rarity is really important for buying skins and items because you want to like stand out of the crowd.” - Participant 4Y

Those who had purchased content saw inherent value within the content available in the Battle Pass, however many of the participants who had not noted missing out on aspects of the experience but did not see the value.

“Well, I guess they can have values on, for example people that have like a deeper connection with the game or the franchise itself…I don't really have a deeper connection with that. So, I don't really care about those. Other than that, I mean, obviously, it can be fun to like, level up your Battle Pass and unlock all these different things while playing. But I've had enough fun without doing that part.” – Participant 5N

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“I'm not missing out because I'm such a casual player of Call of Duty. So, my friends, if I don't have some skin, they're not like, oh so you don’t have the skin. So, I don't feel like there's social pressure. I think there are a lot of cool stuff already in the game that I can customize, as I want to. Yeah, so I don't feel like I'm missing out too much.” - Participant 7N

“I would say that you may miss out a little bit on the community experience or feeling of community, you know, being part of the gaming community if you don't buy them since most people have them” - Participant 8N

A unique viewpoint given by participants in the interviews was that the skins in Call of Duty: Warzone did not allow the player to express themselves due to minor variations to the player models. Their stance was interesting as cosmetics' sole function in games such as Call of Duty: Warzone is to create substantial changes to the player. In contrast, some participants offered differing views on the matter.

“There’s not a whole lot of personality like I guess there's like five good ones pretty much that everybody uses, I don't know it's like the skins are so just so limited that I guess you can show off a very minuet fraction of your personality or something by choosing different skins.” - Participant 2Y

“I'd say because there's multiple color and characters available, so you can choose the ones that appeal to you most. So, every person is going to have a have a unique combination. So, I'd say that really enhances your personality in the game” - Participant 4Y

“I don't really think that in Warzone skins can express anything too much because they're like, as I said, usually just slightly different. At least the ones that I've seen.” - Participant 5N

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“I remember there was this fourth of July pack or something. Which kind of Well, I mean, if you buy it and you have a golden AR with an American flag that is shooting red, white, and blue, that's a statement you can make.” - Participant 7N

Nevertheless, both participants who had and had not purchased content produced similar responses for how they perceived other players based on whether they had purchased content or not. The general understanding from both groupings is that players who had purchased various in-game content were better than other players.

“I think if you spend more money on it, people think that you play it more. Usually if you spend money on it, you play it more often. And it kind of shows your status like you're a better player and I play often, so yeah, it gives out a certain status to you if you have skins and stuff like that.” - Participant 8N

“I think they're better but also sometimes it's like, if they're not that good, and they have a lot of skins it's also like, I kind of mock them a little bit. I'm like, well, so you put all this money in the game, so it could be slightly embarrassing, I guess.” - Participant 3Y

“When people have the Battle Pass, obviously, they're going to be playing more, but then I feel like it also might incite like, toxic behavior in the games, because people want the rewards and maybe if things aren't going their way, they'll you know, be more aggressive to other players because of that.” – Participant 1Y

“I guess it doesn't change my view that much, but I just know that like, you're able to tell if they bought the Battle Pass or not, but I don't really care if people buy” - Participant 6N

Altogether, those who had purchased the in-game content saw inherent value within the Battle Pass’s offerings compared to those who had not. Which, in turn, led to their purchases of said content (Figure 8).

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Figure 8: Findings of subjective norms towards in-game content visualized.

Oddly enough, both groupings had participants who saw the cosmetic offered as not standing out compared to cosmetics offered in other games. However, there were also members of both groupings who found the cosmetics offered did offer a substantial change to appearance. Other players' status was also seen as being affected as players who purchased content were generally seen as more experienced than those who had not. The higher status is because since they purchased content, it is implied that they also play substantially more than others. Overall, the subjective view of the in-game content seemed to be a dimension that led to the purchasing of content for the participants who did make in-game purchases and discouraged those participants who did not (Figure 8). 4.4 Attitude towards microtransactions The dimension of attitude towards microtransactions aims to present the participant's general views on microtransactions and their implementation in video games. Participant's views on microtransactions can display how their views led them to purchase or not purchase content offered in Call of Duty: Warzone. Here were some views on microtransactions in general:

“It really depends on what kind of microtransactions we're talking about, if microtransactions are there for the player to become more overpowered than other players, I don't really like the whole pay to win aspect but if it's just for cosmetics, and stuff that doesn't actually impact gameplay that I don't mind.” – Participant 1Y

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“I don't like pay to win games where you get an advantage from their microtransactions but it's if it's purely like visuals or skins. I think it's fine.” - Participant 4Y

“I'm not a fan of just like cosmetics so skins. I don't really like those. I mean, I don't really like paying for anything to have a benefit either, but if you have to do it in order to be able to compete, then I'd consider it.” - Participant 5N

“I get why companies do them because of course, it brings a ton of revenue when people buy them, you know, most players in warzone do buy the Battle Passes. But in my personal opinion, I never bought it, because I don't really see the point of having a skin on a gun when it does the same thing without the skin.” – Participant 6N

The consensus for those who did participate in microtransactions was that if the content is purely cosmetic, they were fine with them being implemented into games. The same could be said for those who did not buy microtransactions, though because there was no effect to gameplay, they did not see a reason to buy it. One issue seen with games recently has been the heavy promotion of the available in-game content. When asked about their opinion on frequent promotion, these were the responses:

“Like before I was inclined to buy the Battle Pass. I played Warzone and I was like, Oh yeah, I'm not gonna buy it. And it was annoying because at the end of every round, a little pop up would come up and it'd be like, oh, buy the Battle Pass now, and you can get these rewards. That came up every single time so that was a bit annoying.” - Participant 1Y

“Especially warzone when it tried to like shove it down your throat. Yeah, like it made me not want to buy the Battle Pass. It just felt super counterintuitive because I got so annoyed by it blasting you into the store page like every single opportunity it had, like every single time you open up the game” - Participant 2Y

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“I didn't feel a need to put any money in there. Then if you've made that decision already, and it's almost like after every game that you quit and go to the main lobby, there's this huge pop up in the middle of the screen… I think that's pretty annoying. And, in the lobby, everything else is like gray, but the part where it's like the Battle Pass it’s highlighted.” - Participant 5N

The attitude towards microtransactions was positive from all participants, though this mainly depended on the service’s implementation. Participants who did make in-game purchases saw that the implementation of purely cosmetic skins was more favorable compared to content that gave an inherent advantage to another player. This view of the offered microtransactions influences their subjective view of the content as inherently being of some value since it aligns with their view of acceptable in-game content (Figure 9).

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Figure 9: Findings for attitude towards microtransactions visualized.

For the participants who did not purchase content, it was a reason not to buy as they did not align with their preference on offered content (figure 9). These participants generally wanted more substance instead of simply changing their appearance. While they did want more than simply cosmetic changes, they stated that pay-to-win microtransactions were not something they enjoyed in games. Another point mentioned through the interviews was the promotion of the offered content. Participants who had either purchased or not purchased in-game content also found gratuitous promotion of content as annoying. Many participants stated that after most games, they would have to wait for a promotional

35 message of the Battle Pass for a set amount of time before resuming control of the menus. An intriguing notion was also seen because the Battle Passes menu was gold compared to the grey of the other menus. While this was annoying to those who had purchased content, it ultimately did not discourage them from making their purchase. In conclusion, attitude towards microtransactions differed on implementing the content as participants who made purchases felt the in-game content was acceptable to their fair content beliefs. While those who did not make purchases felt that the implementation of non-functional content was fair, it ultimately did not offer the changes they felt made the purchase worthwhile.

4.5 Synthesis of findings Call of Duty: Warzone and its subsequent design supplements four dimensions that support the purchase intent of the in-game cosmetics available for purchase. Enjoyment of the core service, continuous use intentions of the core service, subjective norms towards microtransactions, and attitude towards microtransactions ultimately influence the interviewee's intention of spending or not spending money within the game. However, the choice was not affected by just one dimension alone but noticeably affected by a combination of all dimensions.

Perceived enjoyment in the core service did not lead to purchase intentions for either grouping; furthermore, it seemed to lead away from purchases in those who did not buy in-game content. All participants had a rich history with video games and saw Call of Duty: Warzone as another benchmark in their "leisure" activity. While opinions on Call of Duty: Warzone was thoroughly positive, this positive experience was a reason not to buy the in-game content provided by Participant 5N. Even though they saw the benefits someone can get from the content, they nevertheless felt the experience was good enough on its own. Even with the positive experiences shared with Call of Duty: Warzone, many shared complaints on technical issues stemming from hackers being a prolific problem within the experience. One participant's feeling that it "didn't evolve fast enough" to the large number of players coming to the experience. Another issue also came in balancing new content upon release, specifically with the Cold War update making the game have a pay-to-win

36 feel. In the end, perceived enjoyment of the core service merely reinforced the next dimension analyzed within these findings and even led some of them not to buy any of the purchasable in-game content.

Perceived enjoyment of the core service worked together with the second dimension of the findings, continuous use intentions of the core service. All participants found they had played the game for an extended period, with members in each grouping noting the constant updates for this. These constant updates are ultimately enforced through the design element of alterations to existing content. Participants who purchased content noted that this was one reason for their purchase of the Battle Pass as they saw value in additional content to the experience. While those who did not buy content saw it keep the game fresh, they did not see any additional value from purchasing content. One stance taken from those who had purchased content saw that the Battle Pass sends the message that there will continue to be support for a title with the additions of systems like the Battle Pass. An interesting note from those who did not make purchases came from the mention of cross-play functionality found in the game, allowing console and PC players the opportunity to play together, which has only recently become a feature in many games. Perceived enjoyment definitively supported continuous use intentions of Call of Duty: Warzone as those who purchased content attributed enjoyment as a reason to keep playing and buying content. Reasons for continuous play varied between players but laid the foundation for purchase intent. Those who did not purchase content saw their enjoyment as a reason not to follow through on purchases.

Subjective norms towards microtransactions saw how participants valued content offered within Call of Duty: Warzone and their view on those who purchased said content. Participants who made purchases found that they purchased content such as the Battle Pass because of the progression system's skins. Which ultimately highlights the design element of artificial scarcity and special promotional offers. Contrarily, those who did not make purchases found value in systems, such as the Battle Pass, but did not feel pressured into buying the content. Interesting stances on the cosmetics available came in the form of contradictory statements from each grouping as some felt the cosmetics

37 did not offer much personality. In contrast, others noted how the options available did create methods for personalized distinction from other players. Consistency in responses from all participants came when discussing their view of other players. Many associated those having purchased content as better players, one participant seeing negative actions in such players, compared to those who had not. How the participants viewed the content available for purchase highlighted a cause for purchase intent, with those having made purchases seeing enough value within the content to make their purchase. The value generated from the content ultimately comes down to the cosmetics' design, be it their appearance or animation. Participants who had not made a purchase understood the value of a different progression system provided by the Battle Pass but did not see a need to purchase anything in addition to enjoying what was initially available in the game.

Attitude towards microtransactions sought to see how each participant viewed microtransactions in general and their effect on purchase intent. Contradicting statements came from participants that purchased content and those who had not. Participants who purchased in-game content viewed purely non-functional microtransactions such as cosmetics as an acceptable implementation. However, those who had not purchased in- game content wanted more substance from the content provided other than simply changing how their weapons and character looked. While this was the case, they did view microtransactions that gave an advantage as unfair. Consistency between all participants came when asked about frequent content promotion, with all participants finding frequent promotions that halted the experiences as annoying. Another view came from the Battle Pass menu being distinctly different from others, noticeably its gold color compared to the grey of other menus. The distinction between participants who had purchased content and participants who had not come down to those having bought the Battle Pass saw its implementation as fair for other players and those who had not wanted more substance than a different appearance. The synthesis of the findings culminates in the figure below.

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Figure 10: Visual representation of findings based on Hamari’s (2015) research model.

The four dimensions ultimately lead to purchasing or not purchasing in-game content in various ways, as seen in the figure above. Perceived enjoyment reinforced continuous play, which was a factor leading to participants buying in-game content. However, it was also a reason for participants not to purchase content as they enjoyed the game enough without spending money. Attitudes towards microtransactions alone did not cause participants to purchase content though it did cause those who did not purchase content to now follow through on purchases. The attitude of microtransactions for participants who purchased content was observed as a driver for seeing inherent value within the offered content, leading to purchases. However, subjective norms for those who did not purchase content found little value in the offered content, causing them to no make purchases.’

4.6 Conclusion In conclusion, Call of Duty: Warzone created various intentions for purchasing content and not purchasing content. Design elements of artificial scarcity, promotional offers, cosmetics design, and alterations to existing content were all seen through the participant's responses. The motivators of perceived enjoyment of the core service, continuous use intentions of the core service, subjective norms towards microtransactions, and attitude towards virtual content, created by Hamari's (2015) research model, allowed for a proper synthesis to be completed. Through the various aspects of a consumer's relationship with a title and the offered microtransactions. While

39 one motivator did not manage to encourage or discourage a purchase alone, ultimately, more than one motivator caused participants' actions.

All participants in both groupings enjoyed the core service. The enjoyment alone was a reason to not follow through on purchases from those who did not purchase content as the core experience was enough for them. Although it was a reason not to buy, it was also not seen as a sole reason to complete a purchase. Those who purchased the content offered never stated purchasing content out of enjoyment alone. The two groups found common ground with enjoyment leading to continuous play of the core service. Both grouping also noted the constant updates towards the game as one of their reasons for continuous play. This is where those who purchased content were converted to customers as they saw themselves enjoying the game and playing the title more than other games.

Subjective norms and attitude towards microtransactions contained the most significant difference between those who purchased content and those who had not. Those who purchased content saw the application of microtransactions in Call of Duty: Warzone as acceptable since there was no change to gameplay. This action led to them seeing inherent value in the content offered, which subsequently led to them purchasing systems such as the Battle Pass. These participants also noted that due to the Battle Pass's limited time, they played more to unlock the content within it. The opposite can be said for those who did not purchase content. They did not like the microtransactions' implementation as they wanted a more significant change other than appearance. However, they did state not liking pay-to-win microtransactions. They also did not see value within the content, leading them not to make purchases.

Overall, the four design elements that were seen to influence the purchasing of content in Call of Duty: Warzone were alterations to existing content seen with the constant updates to the game, promotions and artificial scarcity with the Battle Pass system, and cosmetics design. The constant updates lead all participants to continue using the core service, but the conversion from player to consumer appeared with the Battle Pass

40 system. This ultimately came from the limited access to the pass, as it is only available for three months, creating an artificial scarcity of the skins available. To conclude, the core service's continuous use opened those who purchased content to consider systems such as the Battle Pass as they knew they would be playing the game frequently. They saw the content offered to align with their views of acceptable microtransactions and saw inherent value within the content offered. Coupled with the fact that there was a limited time to acquire the content influenced their purchase of the content. While no single dimension led to the purchase of content, all four supporting each other lead those who purchased content to convert from player to consumer.

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5. DISCUSSION Three research questions were created for this thesis. The three questions asked were presented in the introduction section of this thesis. Previous research was collected to understand what has already been found concerning these questions, and primary data was collected in hopes of findings answers for each. How the collected data's findings connect to previous research will be discussed in this section of the thesis.

5.1 Motivators for in-game purchases Motivating players to purchase content is a significant focus of games such as Call of Duty: Warzone as the primary form of monetization is separate from the core experience and only supplements it. Hamari's (2015) work found that players who enjoy the game's core service are less likely to spend real money on items that augment their experience. The findings from conducted interviews found this accurate as the enjoyment of the core service was seen to merely support continuous play and drive participants away from making purchases as they felt the initial experience was enough. These findings were also supported through research conducted by Hamari et al. (2017). They found that enjoyment of the core service did little aside from increase user retention among players with no correlation between a good service leading to the purchasing of the content offered within games. Conclusively, findings for enjoyment and continuous use intentions of the core service support Hamari (2015) and Hamari et al.'s (2017) findings. Those who did not purchase content did not feel the need to convert from player to consumer as they enjoyed the experience. However, the findings did contradict prior research with continuous use intentions. Participants who did make purchases felt they would be playing the game frequently and saw systems like the Battle Pass as a worthwhile addition to the experience.

Hamari et al. (2017) presented four concrete motivators for purchasing in-game content though few play a role in the context of Call of Duty: Warzone. These motivators were unobstructed play, social interaction, competition, and economical rationale. Unobstructed play and competition do not correlate with Call of Duty: Warzone as gameplay is not affected by purchasing content. Some participants supported social

42 interaction as they felt a level of individuality could be shown through the game's offered cosmetics. However, other participants felt there was no clear visual distinction between most of the content. While not explicitly stated, one participant who did purchase content mentioned economical rationale, as they make sure they get the best value from the content before making a purchase.

Motivators also come from what content is offered in the game. As stated, Call of Duty: Warzone has purely cosmetic in-game content that provides visual changes to either the player's avatar or items. Wohn (2014) and Mäntymäki and Salo (2015) found that players who spend the most on in-game transactions buy items with no functional value to enhance their presence in the community. Participants who had purchased in-game content echoed these findings. They felt that items that gave others an advantage were unfair and found Call of Duty: Warzone's implementation of microtransactions as acceptable as they only provided cosmetic changes. All participants also mentioned Wohn (2014) and Mäntymäki and Salo's (2015) statement on cosmetics enhancing community presence. They stated that they felt players who had purchased content were inherently better than those who had not. The idea of elitism was found in Petrovskaya and Zendle's (2020) research on the Battle Pass system. They found that the elitism was created by those higher in the battle pass which created positive engagement for content, with players seeing the system's rewards as attractive. However, Chua et al.'s (2019) research found that players prefer functional in-game content compared to cosmetics which was seen in participants who did not purchase content. They wanted more than just visual changes, though did agree that such content is unfair in games such as Call of Duty: Warzone.

5.2 Game designs influence on in-game purchases Design in games such as Call of Duty: Warzone is utilized in influencing purchases made by players. Game design can cause influences in various ways, such as how the offered content is designed, how specific content is offered, and how others can interact. With the content explicitly offered in Call of Duty: Warzone, value is derived from how the player views the offered cosmetics. All the participants who had purchased content liked the

43 cosmetics offered within the games' purchasable content, which comes from game design, as stated by Ho (2014). His research looked at functional and non-functional content and how game design influenced the purchasing of said content. For cosmetics, the feeling that can come from the appearance, movement, and sound of the cosmetics is formed from the design created for them. One participant who had not purchased content highlighted this fact as they did not understand the history behind some of the skins from the previous Call of Duty titles. He understood that while the content could have value for players who played the other titles, he did not see that character's importance. While the characters' design ultimately can be created, the value comes from how the player views them. Though the value was not seen from those who did not purchase content, it was seen in the participants who did.

How the content is offered to players plays a considerable role in the influence of design in Call of Duty: Warzone, specifically with the Battle Pass system. As each Battle Pass is active for only three months before a new release, players only have a limited amount of time to unlock all the content available. This aspect of the Battle Pass follows the marketing tactics used in game design seen by Hamari's (2010) research. He found that marketing tactics such as special promotional occasions, artificial scarcity, and alterations to existing content played a sizable role in purchases of content within games. Responses from participants echoed these sentiments as those who had purchased content found that they were more likely to buy the Battle Pass because they knew the content would not be available for long. This fact plays into the special promotional occasions and artificial scarcity found by Hamari (2010). Alterations to existing content are also influenced by the Battle Pass as new content such as guns are free but is actively promoted through the Battle Pass system. Cropp (2018) highlighted this notion of positive engagement with the battle pass as it makes players more inclined to continue playing as it creates added intrigue with the renewal of content. Both participants who purchased and did not purchase content found alterations to existing content as a reason for continued play. However, those who saw value from the offered content made the conversion from player to consumer.

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Though only mentioned directly by one participant, it was an essential factor of game design that influenced continuous play, though it did not directly lead to purchases. This being the addition of cross-platform play in Call of Duty: Warzone. Cross-platform play is relatively fresh in the industry as the first example of console and PC cross-play came with in 2016 (Kerr, 2016). It has now made its way into more titles such as Fortnite, Apex Legends, and No Man's Sky (Petite, 2019). Little research was found for how it affects consumer's relationships with titles which should have further research conducted.

5.3 Influence of GaaS on in-game purchases Call of Duty: Warzone's use of the GaaS business model was ultimately seen as a method of player retention through the constant updates given to the title. This business model utilizes Hamari's (2010) design element of alterations to existing content as a focal point of its implementation. Alha et al.'s (2015) definition echo this sentiment as they describe GaaS as a free initial download with the promise of future updates. Participants from both groupings referred to the free download and constant updates as a reason for initial and continued use, with participant 2Y, who had purchased content, attributing the game's free nature with a willingness to purchase additional content. Each participant noted having hundreds of hours of playtime in Call of Duty: Warzone and constant updates being their reason for continued play; Josh's (2020) findings with LOL players echo this as the model allowed for continued enjoyment after many hours of play. Davidoivci-Nora's (2013) research into business models such as GaaS found they are developed with monetization in mind along with their design. As seen in the previous section, design in Call of Duty: Warzone primarily focuses on designing the microtransactions and subsequent promotion.

5.4 Conclusion The findings of the thesis held many links to prior research conducted on similar topics. Hamari (2015) and Hamari et al.'s (2017) findings on how enjoyment affects the purchasing of content mirrored the conducted interviews' findings. Their research ultimately found that enjoyment dissuades players from purchasing content and allows

45 for player retention, as seen through the responses of participants who had not purchased content. Hamari et al. (2017) also presented concrete motivators such as unobstructed play, social interaction, competition, and economical rationale. However, unobstructed play and competition were not seen as applicable for Call of Duty: Warzone's content. Social interaction and economic rationale were applicable as they were explicitly mentioned through the interviews. Social interaction had differing opinions for participants who had and had not purchased content as some viewed the cosmetics as limited in the expression available. In contrast, others saw the possibilities with the offered content. Economical rationale was only explicitly mentioned by Participant 1Y, who saw the offered content as worthwhile. The type of microtransaction offered was also heavily mentioned within research completed by Wohn (2014) and Mäntymäki and Salo (2015), which found that players who spend the most on in-game transactions buy purely cosmetic items. The participants who purchased content echoed this sentiment as they stated a preference for purely cosmetic microtransactions. Contradictory research from Chua et al. (2019) also stated that players prefer functional in-game content compared to non-functional, as seen with participants who did not purchase content. However, they held the same ideals as those who did make purchases and saw content that gave an advantage as unfair.

Game design's influence on in-game purchases was seen with the design of content, how content is offered, and how others can interact. Ho (2014) noted that the emotion generated by cosmetic items comes down to how the content was initially design. Factors such as the content's look, motion, and sound play important factors. Participants who purchased content saw inherent value from the cosmetics, which led them to make the necessary transaction for the content, while those who did not felt the content was not worth their money. How the content is offered came down to the Battle Pass system's implementation as it followed the marketing tactics found in game design by Hamari (2010). The three tactics used by the Battle Pass are special promotional occasions, artificial scarcity, and alterations to existing content. Such influence was given by participants who purchased content as they felt the content's limited nature drove them to make the conversion from player to consumer. Both participants who did and did not purchase content also noted the constant updates to the game, released alongside the

46 release of new Battle Passes, as a reason for continuous use. The alterations to existing content were also discussed by Cropp (2018), who found that systems like the Battle Pass create positive engagement with players through the intrigue associated with renewed content. Though only mentioned by one participant, who did not purchase content, the cross-platform play feature of Call of Duty: Warzone was one of their reasons for continuous play. Though little research has been conducted on its effects on players, it has been implemented into more recent titles and should be looked at more closely (Petite, 2019). Overall, out of the three examples of game designs' influence on purchasing in-game content, how the content is implemented was the most influential.

The use of GaaS in Call of Duty: Warzone was a way of increasing player retention. Alha et al.'s (2015) definition of the business model can be seen as it was released with an initial free download with the promise of future updates. The design element of alterations to existing content, researched by Hamari (2010), is the primary influence created by the GaaS system. Participant's responses from both those who did and did not purchase content emphasized the free download and continued updates as reasons for continued play after the game's initial launch. The free download of the game was even presented as a reason for purchasing additional content by Participant 2Y. The GaaS business model's constant updates giving users a reason to continue playing and investing in games was also referenced in Josh's (2020) research into LOL players. His findings found that the model allowed for enjoyment after hours of playtime, which was stated by Participants that purchased and did not purchase content.

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6. CONCLUSION This thesis aims to analyze how game design influences the purchasing of in-game microtransactions, focusing on Call of Duty: Warzone. Secondary data was collected based on the research requestions and problems identified in this thesis's preliminary research information section. The literature review collected all necessary prior research for this thesis, focusing on value creation, game design, and the GaaS business model. The methodology presented the data collection process and how said data was then analyzed. The findings ultimately analyzed the participants' responses during data collection with the synthesis of said responses drawing conclusions based on the conceptual framework used. The discussion connects the findings to the prior research collected for the literature review.

6.1 Main Findings The main findings of this thesis will be answered through the research questions presented within the introduction section of this thesis.

1. What are the purchase motivations for in-game content?

Motivations for purchasing content were seen to be derived from the content offered in the game and continuous use intentions. Participants who purchased content enjoyed the core experience of the game, which lead to continuous use of the service. Continuous use of the game led those who made purchases to view the content offered as they felt they would be playing the title for a while. They also viewed the implementation of the offered content as acceptable since it did not affect gameplay and saw value in the cosmetics available in systems such as the Battle Pass. Value was seen from the individuality created by the available cosmetics though differing views on the quality of the content were made. Where those who did not purchase content differ is with the enjoyment of the core service. For those participants, the core service's enjoyment was enough for them not to make additional purchases and subsequently only supported their continuous use intentions.

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2. How does the design of games influence the purchase of in-game cosmetic items?

Game design's influence in Call of Duty: Warzone comes from how the content is designed, how content is offered, and how others can interact. The design of the content influences purchases from the design of its appearance, movement, and sound. As each skin utilized in the Battle Pass and skin bundles are created, the skins can be designed to influence players in various ways. Participants who purchased content saw value in the look of the available cosmetics, while those who did not purchase content failed to see any added value to their experience. The Battle Pass system's overall design also influences players since the time to unlock all available content is limited. Participants who purchased content saw this as a reason to purchase the Battle Pass as they knew they would not receive the content if they did not play to unlock each level. The Battle Pass is also released alongside new updates, ultimately creating new content, which was a reason for continuous play in all participants. However, those who did not make purchases did not see the offered cosmetics' value, resulting in them not adding the Battle Pass to their experience. The final element of game design comes from cross-platform play, which was a reason for continuous play from one participant who did not purchase content. Of the three examples of game design utilized in Call of Duty: Warzone, the design of how the content is implemented was shown as most influential.

3. How has the GaaS business model influenced the purchase of in-game cosmetics?

The GaaS business model has been implemented into various genres of video games. The business model's core focus is releasing the experience for free to attract players and retain them through various game updates. Call of Duty: Warzone follows this model with the in-game cosmetics present to support the core experience through visuals and an added progression system provided through the Battle Pass. Having a solid core experience and creating continuous use intentions with continued support and content, Call of Duty: Warzone effectively utilizes this business model. As the shift towards cosmetics only leads game design to inherently promote the content instead of imposing

49 it, exposure to players as in-game advertisements for offered content helps create a community standard. Where Call of Duty: Warzone failed to make conversions was through the value of the cosmetics. As the Battle Pass system was seen as inherently good for the experience, the visuals offered were not valuable to some respondents. Overall, the GaaS business model’s influence on in-game content purchases comes from frequent updates and new content given to players. The model's implied support inherently confirms to the consumer that their investment in the service will be worthwhile.

6.2 Implications for International Business This thesis offers a greater understanding of how game design ultimately leads players to become customers when utilizing the GaaS business model. As the GaaS system has become increasingly popular for AAA releases with the success of games like Call of Duty: Warzone, developers need to see how the model inherently leads to content purchasing. This is important as the game itself is free, with the titles' primary revenue coming from content offerings. The Battle Pass system is also becoming increasingly popular among games, so seeing how the implementation of such as system supports purchasing content and player retention is essential.

6.3 Limitations The most significant limitation of this study comes from the demographic of the participants of the interview. Firstly, all the participants were male, lacking the diversity commonly seen within the video game industry, seen with 49% of US gamers being female in 2020 (Gilbert 2020). Secondly, all participants were either Finnish or half Finnish, creating a lack of diversity with nationality and cultural differences. Thirdly, all participants were either 20 or 21 years of age; the difference in behavior from older to younger players is now left out of the research. The difference in purchase motivators from different age ranges would have been an interesting aspect to research. These limitations stem from the fact that this is a bachelor's study that lacked the necessary funds to find a larger demographic for interviews. If these factors were considered, this study's results would have applied to a broader audience of the gaming community.

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6.4 Suggestions for further research The study investigated how the design of the game influenced the purchasing of in-game content. Further research could investigate various other aspects of games like Call of Duty: Warzone, such as the story narrative created with subsequent releases of content and their effect on influencing in-game content purchases. The influence of game design in Call of Duty: Warzone could also be compared to other games within the genre. Cross- platform play was a design choice mentioned by one participant, which has seen little research in academic mediums. How this affects players would be an interesting prospect. Further research could also consider the use of focus groups for data collection. A focus group would allow participants to discuss with each other, potentially synthesizing greater data for the study.

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Appendices Interview questions 1. What is your name? 2. What is your age? 3. What is your preferred gender? 4. What would you say is your relationship with video games? 5. How much have you played Call of Duty: Warzone? 6. Do you enjoy the overall experience of the game? 7. What factors would you say led you to continue playing past the initial launch? 8. What are your general views on microtransactions? 9. Did you ever purchase the Battle Pass or skin bundles? 10. Do your purchase habits vary between content and why? 11. How much money would you say you spent on the game? 12. What factors do you think led to such purchases? 13. What do you look for in in-game purchases? 14. Has your attitude towards microtransactions changed? 15. What value do systems like the Battle Pass have on your overall experience? 16. Do you think you are missing out if you do not but the Battle Pass? What are you missing out on? 17. How do systems like the Battle Pass improve the overall experience?

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18. Do you feel that skins and other cosmetics affect your in-game status and how? 19. How do skins allow you to express yourself? 20. Does the rarity of a cosmetic affect you purchasing decisions? 21. How does the opponents skin affect your attitude towards them? 22. Does your view of other players change based on if they have bought in-game items or if they have not? 23. How do you feel if a game attempts to promote microtransactions regularly? 24. What would you say is the biggest flaw of games like Warzone?

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