The Empirical Analysis of Free-sample Promotion Effect in Mobile Games

The objective of this research is to understand the factors related to in-app purchase in freemium mobile games. The primary research question is whether free-sample items have a positive or negative effect on virtual item selling. The empirical dataset used for this research is a very large user-level gameplay log dataset collected from a Korean mobile game company. To test the hypotheses, negative binomial regression is carried out since item purchase as our dependent variable is over-dispersed count variable. Generalized method of moments model is also employed to understand the recursive relationship with purchasing and playing behaviors. Preliminary results show that the impact of free-sample promotion is positive on the item purchase in the same period, but its impact becomes negative in the subsequent period. This study also examines the impact of habitual and goal-oriented behaviors on the in-app purchase and finds that users are more likely to buy virtual items when they play more frequently and when they reach a higher stage. Finally, expected contribution and the major challenge of this research are discussed