Wednesday, July 17, 2019

People Spend Real Money On Imaginary Products

See You Spent $1,500 on Virtual Bazookas? Kids Are Splurging on Digital Goods:In-game purchases come under new scrutiny from lawmakers; with virtual spending, ‘money turns magical’ by Julie Jargon of The WSJ. Excerpts:
"Kids are now spending hundreds or even thousands of dollars on more ephemeral goods such as outfits for their videogame avatars and gems to help them level up in games."

"Buying an item while playing a game is instantaneous. Meanwhile, the dollar amounts add up without kids noticing how light the piggy bank is getting."

"“The danger with these purchases is that money turns magical,” said Nathan Dungan, founder and president of financial-education firm Share Save Spend. “Children’s brains can’t process these virtual transactions because it’s not tangible to them.”"

"A Microsoft spokeswoman said Xbox has family settings that allow parents to approve and limit purchases and to receive alerts when purchases are made."

One young person said "“feels a little weird” to spend real money on virtual items but that buying cool stuff gives him something to talk about with his friends and improves his game play."

"In-game spending is starting to get more attention from lawmakers, regulators and plaintiff’s attorneys. Inc. AMZN -0.89% in 2017 agreed to refund $70 million to customers who were charged for unauthorized in-app purchases made by a child, as part of a settlement with the Federal Trade Commission."

"“Fortnite” has made $3.9 billion in revenue since its July 2017 launch, with almost all of it coming from microtransactions"
How to Manage Your Child’s Virtual Spending
Control the money. “You are the bank,” said Joost van Dreunen, a co-founder of Nielsen’s SuperData who also teaches a course on videogame economics at NYU. “At all times you must be in charge of the credit card.”"

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