Add On or Move On: Do In-game Purchases Help or Hurt Upgrading to Newer Game Versions?

Video game players frequently face trade-offs between investing in in-game purchases to improve their currently owned game version and upgrading to a newer, improved version altogether. This decision is significant, as upgrading usually implies losing all acquired in-game items, which are typically incompatible with the newer game version. From the game publisher’s perspective, in-game purchases may deter upgrading and cannibalize newer game versions. However, these purchases may also increase game usage, making upgrading more likely. We consider these two paths with opposite effects. We use over four years of longitudinal data from a major video game publisher, containing individual players’ gaming, in-game purchasing, and upgrading behavior. We find evidence for both paths, with a stronger negative path for cannibalization and a weaker positive path via increased game usage. Furthermore, the net effect of in-game purchases on upgrading is contingent on two salience-related moderators, with recency of in-game purchases reinforcing the positive path and buzz about an upcoming game version attenuating the negative and reinforcing the positive path.