Gaming is one of the most exciting and engaging activities you can do online today. And like with anything fun, you rarely stop to wonder just how much you are spending on gaming. A recent survey has answered this question for you. According to a survey by All Home Connections economists, gamers spend way more than they think on gaming. The authorized AT&T reseller has the following to say about gamer spending and how it might affect your future.
Average Gamer Budget
Game spending seems to be a trending topic at the moment. CasinoAus has noticed an upsurge of gamers joining real money casino sites to play various games online. In fact, recent statistics show that online casinos in Australia made $4.5 billion in 2022.
Much of this may be due to the ever-increasing ways to spend money on gaming. Services like gaming subscriptions and microtransactions can quickly rack up a gamer’s budget. To prevent overspending, gaming providers and experts now recommend setting and sticking to a monthly budget and tracking spending.
In a bid to accomplish the latter, the economists that conducted the study interviewed 1,000 gamers in the United States to find out things like how old they are, how often they play, and, of course, how much they spend on gaming monthly. The survey also required that participants compare their spending on games to what they paid for travel and fitness, among other expenses.
Per the findings, the average American gamer spends approximately $76 (£60) every month on games. Compounded, this comes to about $58,000 (£45,600) in their lifetime. Lifetime, in this case, was defined as between 16 and 80. So, assuming that you start gaming at 16 and play until you are 80, you will have spent $912 on games every year ($76 x 12) and $58,368 by the time you stop ($912 x 64).
The survey went a little further to determine exactly how age affects game spending. According to the numbers, millennials spend more on gaming than other age groups, at approximately $86 a month, $1,032 annually, and $66,000 in a lifetime. Gen Z is not very far behind at $80 a month, $960 annually, and $61,440 in a lifetime. Last on the list are baby boomers who spend about $52 a month on gaming.
These numbers make a lot of sense considering that millennials currently make up much of the stable workforce and, therefore, earn more than Gen Zers. Millennials also have a longer history with gaming and have watched it grow into the multi-billion-dollar industry it is today.
How Do Gamers Spend Money on Video Gaming?
But how exactly do millennials, baby boomers, and gen Z spend money on gaming. Apart from the obvious expenses associated with gaming, such as setting up a gaming system, video games are monetized in the following primary ways.
Retail purchases are the most traditional form of video game monetization. They encompass online retail and brick and mortar sales, through which gamers acquire physical or digital copies of their favorite games. Additionally, retail purchases include buying of game consoles, whether as an initial purchase or upgrade to a currently owned game console.
Previously, retail transactions accounted for most game-related transactions. Statistics show that the revenue from these sales was worth $52.4 billion in 2021. However, projects show that this market size will decrease to about $45.8 billion by 2025. This decline of retail transactions is due the increased popularity of mobile gaming, in-game purchases and free-to-play games.
That said, retail game stores remain a central part of gaming. In addition to providing important gaming equipment and titles, they also provide a physical meeting place for passionate gamers. They regularly sell collectibles, offer celebrity signings, and arrange conventions to draw in avid gamers.
Microtransactions have taken over much of the territory once held by retail transactions. They are in-game purchases that allow a player to access special features within a game or continue playing. Per some estimates, micro transactions within a video game can cost as little as $0.99 to as much as $99. Tuoro University describes four types of transactions within this monetization model. These include random chance purchases, subscriptions, in-game items, and level unlocking.
Obviously, the monetization methods vary across different titles. Some games require you to pay to access higher levels while others are technically free-to-play but you can get an upper hand by using money to purchase in-game perks like skins and weapons. World of Warcraft is a good example of this.
The overall purpose of microtransactions is to create revenue for copyright holders, game developers, and other stakeholders. However, their ability to push a gamer past their gaming budget and encourage overspending has made them very controversial.
Subscriptions and Subscription Services
Another way gamers spend money on gaming is through subscriptions and subscription services. In the former, some game developers design their game so that players need to make continuous, ongoing payments to play. This is usually done so that the game is broken down into incremental blocks that you access through monthly payments. When your subscription times out, your access to the game is reduced or stopped entirely until you re-subscribe.
Subscription services are slightly different from subscription games. They are usually offered by gaming and digital platforms like Sony and rather than allow you access to a particular game; they provide gaming-related services. These may include monthly games, multiplayer online sessions, and access to a gaming library, among other perks.
Many free-to-play games also often feature advertisements as an indirect form of monetization. These advertisements appear within the game, either as product placements, commercial breaks in play, or banner advertisements. As a doorway to microtransactions, players can update to a paid version of the game to get rid of these advertisements.
Outcome of Game Spending
All of these costs accumulate to the levels of game spending shown in this report. In a further step, the economists at All Home Connections sought to find out how these costs affectc gamers’ futures. The surveys tried to determine how much gamers would save by retirement if they stopped gaming. Apparently, millennials can expect about $307,000 by retirement if they put their gaming pads down, and Gen Zers $221,000. These numbers are adjusted for a 6 percent annual return and assume that the gamers will retire at 65.
All in all, the survey by All Home Connections seems to point to increased spending by gamers. And while it does not recommend any solutions, it might help to create a gaming budget to ensure that your gaming needs do not overshadow your other financial responsibilities.