Implementing Stochastic Products Selling in Mobile Games: Is Gacha Just Gambling?


Jianqing Wu
Deepti Singh


This paper studies the economic impacts of implementing the “Gacha” strategy in free-to-pay mobile games. The Gacha strategy allows game providers to sell stochastic products in games, such that the players pay in-game virtual currencies to obtain a random product. Various Gacha games have achieved financial success in recent years. One such Gacha game is Genshin Impact, an action role-playing game. After being released in September 2020, Genshin Impact had a revenue of more than $3 billion in its first year of release, the highest for any video game. Prior studies on Gacha games mainly focus on debating whether the Gacha games can be associated with gambling. To the best of our knowledge, the economic impacts of the Gacha on free-to-pay mobile games have not been explored yet. In this paper, we build a theoretical model to study how free-to-play mobile game providers benefit from the Gacha strategy. We show that, for the mobile games that follow the Game-as-a-Service revenue model, the Gacha strategy could lead to higher revenue than the commonly used Freemium strategy. We characterize a sufficient condition for the Gacha strategy to be optimal. We further show that the Gacha strategy converts non-paid players to payers gradually, and thus benefits the game providers in the long run.

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November, 2023

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