How Freemium Gets Consumers to Pay a Premium: The Role of Loss-Aversion

Mishra, Nishant; Najafi, Sajjad; Asadolahi, Sami Najafi; Tsay, Andy A.

doi:10.2139/ssrn.2961548

Cited by 7 publications

(3 citation statements)

References 1 publication

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“…Some players may not proceed to purchase items or features sold in the game. However, the results showed that players tend to be willing to pay more in the game because they do not puas with the free version, because it turns out that the value they get is lower than expected (Mishra et al, 2018). This means that players can choose to feel more satisfaction or not from a freemium game.…”

Section: Introductionmentioning

confidence: 91%

Effect of Perceived Value on Satisfaction to Microtransactions in Valorant

Arifin

Gricelda

et al. 2023

Eduvest

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Current technological developments, especially in the digital game industry, have built new business opportunities in a digital game and caused a new phenomenon that is linkedto Microtransaction, which is also found in the Valorant game. There are pros and cons of using microtransactions, as well as limited research on Valorant games, especially those related to the variables of emotional value, social value, functional value, value for money (good price), satisfaction, and purchase intention of the game, so this study aims to examine more deeply about consumer motivation from perceived value to satisfaction to purchase intention, especially in the Valorant game. A total of 333 respondents in the Jabodetabek area have been studied using purposive sampling techniques. This study used Smart PLS 3.0 to test the validity, reliability, and hypote results ofsis. This study looked at the relationship between perceived value to satisfaction and satisfaction with purchase intention, especially in Valorant games. The results of the study stated that social value, functional value, and value for money have aneffect on satisfaction, as well as satisfaction affects purchase intention. Meanwhile, emotional value has no influence on satisfaction

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Section: Introductionmentioning

confidence: 91%

Effect of Perceived Value on Satisfaction to Microtransactions in Valorant

Arifin

Gricelda

et al. 2023

Eduvest

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“…Mäntymäki, Islam, and Benbasat (2020) find that the enjoyment and cost related to the premium subscription predict the intention to upgrade to premium, while retention in the premium subscription is driven by ubiquitous and convenient accessibility of the service and features that enable users to discover new content. Streaming services may also decrease the utility of the free version (e.g., restricting the number of features) to incentivize users to adopt the profitable paid channel (Wlömert and Papies 2016), as users may become dissatisfied with the free version's value (Mishra et al 2018). In line with this argument, Hamari, Hanner, and Koivisto (2020) propose the “demand through inconvenience” hypothesis, which claims that high enjoyment of the free version decreases the intention to switch to the premium version.…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Conversion in Music Streaming Services

Seifert,

Denk,

Clement

et al. 2023

Journal of Interactive Marketing

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Demand spillovers between distribution channels are critical for revenue streams in the music industry. Drawing on consumption capital theory, this study investigates the impact of a subscription (unsubscription) or upgrade (downgrade) in music streaming on live, physical, and digital music consumption. The propensity score matching approach applied to a biannual panel with six waves indicates that conversion in music subscriptions spills over to the live market and changes willingness to pay (WTP) and demand for live events. Converting from no streaming or free streaming to a premium subscription leads to a particularly high surplus in WTP and demand for live music. Unsubscribing or downgrading a music subscription decreases WTP and demand for live events. However, changes in music subscriptions are rather unrelated to physical and digital purchases. A scenario analysis indicates that deleting the free streaming option outperforms restricting the features available to free users. The authors provide contingencies of this finding.

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“…a version with limited functionality of the premium version. After installing the app, the customers can assess their satisfaction and consider the costs of installing the premium version (Mishra et al, 2018). This suggests the importance of pricing as a topic even for apps that are released for free.…”

Section: Investigating the Effects Of Pricing On Consumer Reviewsmentioning

confidence: 99%

Effects of app pricing structures on product evaluations

Wolkenfelt

Situmeang

2020

JRIM

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Purpose The purpose of this paper is to contribute to the marketing literature and practice by examining the effect of product pricing on consumer behaviours with regard to the assertiveness and the sentiments expressed in their product reviews. In addition, the paper uses new data collection and machine learning tools that can also be extended for other research of online consumer reviewing behaviours. Design/methodology/approach Using web crawling techniques, a large data set was extracted from the Google Play Store. Following this, the authors created machine learning algorithms to identify topics from product reviews and to quantify assertiveness and sentiments from the review texts. Findings The results indicate that product pricing models affect consumer review sentiment, assertiveness and topics. Removing upfront payment obligations positively impacts the overall and pricing specific consumer sentiment and reduces assertiveness. Research limitations/implications The results reveal new effects of pricing models on the nature of consumer reviews of products and form a basis for future research. The study was conducted in the gaming category of the Google Play Store and the generalisability of the findings for other app segments or marketplaces should be further tested. Originality/value The findings can help companies that create digital products in choosing a pricing strategy for their apps. The paper is the first to investigate how pricing modes affect the nature of online reviews written by consumers.

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How Freemium Gets Consumers to Pay a Premium: The Role of Loss-Aversion

Cited by 7 publications

References 1 publication

Effect of Perceived Value on Satisfaction to Microtransactions in Valorant

Effect of Perceived Value on Satisfaction to Microtransactions in Valorant

Conversion in Music Streaming Services

Effects of app pricing structures on product evaluations

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