Genshin Impact
Genshin Impact
panji.mukadis@sgu.ac.id
1 Introduction
1.1 Background
One of the more recent ways entertainment is provided is with video games. While
traditional games as a state-of-play have existed for as long as civilization itself with
the first recorded games dating back as far as 2600 BC [Soubeyrand, n.d.], video games,
in comparison, are a modern phenomenon. Their existence is only made possible by the
advancements in electronic technology as well as in computing.
Today, video games are defined as electronic games that use an input device like a
controller, joystick, or keyboard to generate moving images and audio through a display
output. Arcade-style video games are now uncommon with the vast majority of players
playing via home consoles such as Sony’s PlayStation, Microsoft’s Xbox, and personal
computers. Virtual reality [VR] games played with specific headsets to immerse players
deeper than traditional consoles ever could are a new field, but still far from the
mainstream as of date.
Accordingly, the video game industry has grown from a niche field to a major and
valuable entertainment sector. The industry was worth $200 billion in 2022 [1] and is
* Correspondence author
worth three times the global music industry and four times the global film industry in
2019 [2]. It is clear that video games are a heavyweight and profitable industry.
In terms of monetization, video games have historically been one-time paid items where
players purchase the game outright. Companies have since discovered new ways to
monetize players aside from the game’s initial price. This is partly due to the popularity
of free-to-play [F2P] games. As the name implies, these types of games have no upfront
cost, which necessitates that developers look for other ways to monetize their game.
Free-to-play games can trace its roots to mobile games and PC-only online games,
which use games as a service [GaaS] business model [3]. This is in contrast to the
classic business model of paying once for the game itself.
GaaS games, also known as live service games, emerged from advancements in internet
infrastructure, allowing players to purchase their games digitally and download them
onto their own devices rather than buying physical disks as was once the norm. The
internet also allows developers to retroactively patch and add updates to their games,
as well as create additional content that is not large enough to warrant an entire game
but still is sizable enough. These downloadable content [DLC] usually comes in
expansion packs that add in-game items as well as additional missions and characters;
DLCs are also a popular way for game developers to monetize their game even further
by providing additional value after the game’s initial launch.
F2P games must balance playable content for free and paid packs; if players are given
too much content, they would not have to spend any money, which would be bad for
developers since they have expenses from game development, talent hiring, and studio
expenses like water and electricity. On the other hand, if developers erect too many
paywalls, players might feel disincentivized to invest time and money in said game and
might look for other games instead.
One of the most common microtransactions today is loot boxes, which are paid packs
that contain randomized in-game items like customizations and gear for a character.
Loot boxes are part of the psychological compulsion loop designed to keep players
playing and paying [4], and the unknown chance a player will get a certain item has
resulted in several watchdogs and governments to label them as gambling, which is
particularly problematic as many gamers are under 18. The Australian government has
even introduced a bill to rate any game with loot boxes as 18+ [1], which shows how
seriously this issue is being treated.
To illustrate how prevalent loot boxes are in the gaming industry today, we can refer to
Genshin Impact as an example. While an action RPG at heart, the free-to-play game
564 J. Haka and P. N. A. Mukadis
includes elements of gacha mechanics for its monetization systems. Gacha games
implement slot machine-style random rewards and encourage players to spend
[commonly known as “pull” in the gaming community] until they finally have the
character and/or gear they desire [5]. The randomness of the gacha and loot box
mechanics have led to debates on whether games like these should be classified as
gambling [6]. This is particularly important as the most vulnerable people are young
children while traditional gambling has always been heavily regulated. Regardless of
its ethical consideration, there is no doubt Genshin is a financial success, grossing $3.6
billion before its second anniversary [7].
To better understand how social dynamics affect player purchasing behavior, this
research will analyze whether players’ social gaming environment correlates to their
spending habits. Genshin therefore serves as the main point of study due to the game’s
large Indonesian player base, varied microtransaction options, and gacha mechanics.
This research will use Albert Bandura’s social learning theory concepts [specifically its
observational learning and intrinsic reinforcement concept] to understand why players
feel the need to purchase loot boxes and other microtransactions. The data from this
research can be used as reference for further research.
2 Literature review
2.1 Video games
Video games are, in the context of this research, defined as electronic games that rely
on player interaction [8]. This interactiveness is the single most distinguishing factor
when comparing video games to other media like books, motion pictures, and songs.
Examining the factors of observational learning 565
Granic also added that while in other media users surrender to its narratives, video game
storylines are often shaped by players themselves. Players actively engage with the in-
game environment using available controls and the world reacts to it. This also varies
by genre; a shooter game like Call of Duty will have different controls from the likes
of Animal Crossing, which in turn affects the amount and type of actions players can
do in each.
Also important to discuss is the way video games are played as the evolution of video
games is tied to the medium in which they have been played [3]. Video games started
in the latter half of the 20th century as technological advancements enabled the use of
computers for entertainment. Back then, arcade machines were the only way to play.
As a result, large arcade centers with various machines became lucrative businesses.
As technology advanced even further, the concept of playing video games from the
comfort of one’s home materialized with video game consoles spurred on by the likes
of Nintendo’s Super Nintendo Entertainment System and Sony’s PlayStation line of
products. Personal computers [PCs] also saw their fair share of games too, and the
advent of mass internet adoption as well as smartphones led the way to a new age of
online gaming.
While the narrative among the media has been that video games can cause violence
among its players, studies have shown that video games actually provide a positive
impact to players, particularly in cognition [5]. They noted that players in fast-paced
games like shooters have better as well as faster reaction times, pattern recognition
skills and other cognitive values compared to their peers who do not. Grenic also added
that video games confer a positive motivational and emotional effect on players.
Playing video games releases dopamine, the hormone that triggers feelings of
satisfaction in our brains. However, they also noted that this positive feedback loop is
vulnerable to exploitation by game developers, particularly when it comes to
monetization. The specific details of video game monetization will be discussed later.
2.2 Video game monetization and loot boxes
Video games are at its core, software, so game development follows some of the defined
methods established in traditional software development like social media apps.
However, due to its unique nature of blending technical computing knowledge with
media elements such as storytelling, sound, and video, there is a creative aspect of game
development with positions not unlike those in movie production. These two
contrasting aspects also clash, with creative visions having to realize the technical
constraints of said game’s engine and the platform[s] in which the game is meant to be
played.
All this means that video game development today is an expensive endeavor [9]. As
with any other business, one’s goal ultimately is to make money.
566 J. Haka and P. N. A. Mukadis
Traditionally, video games have always been a paid instance. Even during the 20th
century where arcade games were the norm, one would pay with coins for the game to
start. The advent of home consoles brought with portable game storage in the form of
cartridges and DVDs. Another leap in technology was the internet, which brought
together online storefronts like Steam, the Epic Games Store, and Android’s Google
Play as well as Apple’s App Store. It also allowed existing console manufacturers to
distribute their games digitally, and most importantly enabled the games-as-a-service
[GaaS] model to function [10].
In contrast to traditional games which are a once-paid product, GaaS games see multiple
updates post-release, usually with paid content updates to keep its player base active
for a longer time [11]. Naturally, GaaS games often include social features like
multiplayer and a leaderboard system for player rankings [3].
The modern internet infrastructure also developed within the last decade or two, a time
when smartphones were becoming more popular. Due to this, the internet also
facilitated the growth of mobile games which are often free to play [F2P]. Mobile game
development requires less resources, both financial and technical as phones are less
computationally complex devices compared to PCs and home consoles. Mobile games
are even used for training pre-university students [12]. Consequently, most mobile
games are F2P.
In place of a buying price, F2P games have microtransactions. These are paid in-game
purchases from within the game itself [13]. They range from premium in-game
currencies only earned via these kinds of purchases to in-game items. Microtransactions
allow developers to earn revenue and recoup development costs while also attracting
players to try out the game without any payment to see if they like it or not before
investing any real money into said game. That said, properly encouraging players to
purchase microtransactions without directly making the game unplayable without them
as players might be turned away instead. Tomić cited Dungeon Keepers 2 as an F2P
game that is practically impossible to play without microtransactions, thus making the
F2P label questionable.
One particular type of microtransaction that is the subject of this research is a loot box.
It does similarly to other types of microtransactions, but the key difference is loot boxes
will not show the player what item[s] they will get. A loot box contains a pool of
rewards that on opening will be randomly rolled to generate a reward for the player.
These mechanics make loot boxes highly similar to slot machines in casinos, and as
such can be classified as gambling [5]. Some countries are as of 2019 introducing bills
to ban loot boxes or enforce an 18+ rating on any game that implements them [14]. This
is particularly concerning as unlike casinos, video games have no tangible way to
enforce an age rating to players. Steam for example, has an age check before viewing
Examining the factors of observational learning 567
certain games with excessive violence and sexual content, but any player could just lie
and enter a fictitious age that is old enough to let them in.
To highlight the dangers posed by unregulated loot boxes, we take a look at the
controversy surrounding Star Wars: Battlefront II, a multiplayer shooter developed by
Electronic Arts set in the Star Wars universe [15]. Battlefront II, despite being a $60
purchase, has a steep progression system and better gear locked in loot boxes, which
has led to controversies. Belgium's gaming regulatory body even launched an
investigation into the game's loot boxes to determine if they are considered gambling.
EA ultimately lost $3.1 billion in stock value [16].
Since then, loot boxes have become more common in the gaming industry. Studying
their psychological impact on players will be the key to better regulatory practices.
When a video game implements these gacha-style mechanics into their monetization
systems, such games are known as gacha games.To understand and contextualize how
gacha games work, a good example to look at would be games developed by Chinese
company miHoYo. Two of their games [Genshin Impact and Honkai: Star Rail] are
both highly financially successful with Genshin recording a $3.6 billion revenue nearly
two years after its launch [7].
While similar to loot boxes at a glance, a gacha game also has additional mechanics for
enticing players to spend real money. The most visible example is using fear-of-
missing-out [FOMO] aspects by only making a character or item available for a select
time period [5]. Therefore, if a player wants a certain character, they will have to spend
money before the timer runs out [5]. These rotating systems are referred to as “banners”
and they dictate which character or item is currently available.
In Genshin for example, a banner usually runs for six weeks. Each banner has a main
character/weapon players are intended to try and get [to “pull”] via the gacha system.
The rest of the drop table is filled with less powerful characters and/or items [denoted
by their star rating in-game] to dilute the chances of getting the character on banner.
568 J. Haka and P. N. A. Mukadis
Once a banner ends, said character may take months or even years to appear again in a
banner rerun. As Genshin and other gacha games often use the live service model to
retain players, every major update means new characters for players to pull. For
comparison, when the game launched in 2020 [Version 1.0], it had only 22 playable
characters, but Genshin now has 80 playable characters as of Version 4.5. The wait
times for reruns will only grow as more characters are introduced. This way, players
are encouraged to spend as soon as their preferred character is on banner, be it due to
gameplay or aesthetics. Speaking of gameplay, the game’s core loop relies on players
having characters with different elemental powers to combine and create reactions;
another reason to pull for different characters as each character has only one element.
Chiori, the current banner’s character, is a Geo [earth] character for example.
To protect players from being statistically very unlucky with their pulls, gacha games
sometimes have a “pity” mechanic as a hard cap to their chances. Each game can have
different implementations; in Genshin’s case, every 10 pulls will guarantee a 4-star
character/item while players are guaranteed to get a 5-star character/item every 90 pulls
though this might not be the on-banner character. If that is the case, the second 5-star
character players get will always be the on-banner character [dubbed “50/50” by the
community].
The random aspect of each pull has led to comparisons with gambling. Research
conducted in Europe and the US reveals that over half of young people who play gacha
have developed negative gambling habits. The gacha game industry encourages
compulsive gambling, and 30 percent of students who spend between $266 and $1280
do not have a reliable source of income [17]. While this presents a dangerous situation
as video game monetization is not as heavily [if any] regulated compared to traditional
gambling, governments are already trying to rein in the industry. As of 2017, Belgium
has launched an inquiry into whether loot boxes should be considered gambling. China
also requires games to publish drop rates for gacha banners and loot boxes so players
know their exact probability of pulling the characters they want [17]. Overall, video
games and their monetization is a new field and much research is being conducted to
explore the relationship between players, developers, and regulators.
Regardless of ethical implications, it is undeniable that gacha games like Genshin are
able to generate significant profits if developers can strike the right balance between
Examining the factors of observational learning 569
the game itself and its monetization. To illustrate how profitable the game is, the game’s
highest-earning six-week banners are around $30 million in revenue each [6]; $30
million every six weeks.
Video games also have transcended their own medium and crossed over into television
as well as film. A recent example is the critically acclaimed HBO series The Last of Us,
which is actually an adaptation of developer Naughty Dog’s similarly lauded game
series of the same name [18]. Numerous video game intellectual properties [IPs] have
also made the transition to the big screen. Examples include the animated Mario movie,
a Five Nights at Freddy’s adaptation and the Resident Evil films.
Aside from direct sales activities, the video game industry also is responsible for
creating new career opportunities. Video game streamers are now a lucrative job with
revenues totaling in the millions. Platforms such as Twitch enabled content creation
around video games [19] and has changed the way the industry moves forward.
Developers partner with streamers to promote and build hype for upcoming games.
Aside from streamers, various games are also played as e-sports [14]. Competitive
genres like shooters and MOBAs [multiplayer online battle arenas] have international
tournaments attracting athletes and fans from all over the world with millions of dollars
in prize money.
While these all contribute to the overall game economy, the vast majority of revenue
still comes from game-related transactions including microtransactions. It is the still-
growing industry that incentivizes developers into finding new monetization methods,
including the loot boxes discussed in the previous section.
Players are also classified into four distinct profiles based on their motivations to play
[19]. These four are as follows: casual, challenge, hardcore, and arousal. Potard also
noted that certain personality traits are associated with the development of video game
use preferences.
When it comes to player spending on video games, there is a link between in-game
spending habits and problem gambling [6]. Due to the amount of microtransactions
available, Gibson’s team further arranged these into three categories: loot boxes, pay-
to-win microtransactions, and mixed microtransaction models. They concluded that the
single most significant indicator is the frequency of purchase, not the amount paid in a
single transaction.
Another study also corroborated the pay-to-win aspect some microtransactions can
have, particularly in competitive multiplayer games where paying players might have
an edge towards non-paying ones. This might create an uneven playing field in the
game [15]. Neely also emphasized the difference between in-game items obtainable by
playing and real money with items only obtainable with real money. She concluded that
as long as microtransactions do not give the player an unfair advantage,
microtransactions are ethical.
While previous theories have so far argued that learning was through conditioning,
rewarding [such as giving a dog a treat once they sat], and punishment [such as a teacher
making their student stand up in class if they missed a homework], Bandura argued that
learning can also be through observation [3], like knowing that a football is supposed
to be kicked while watching a football match.
a. Observation
b. Imitation
c. Modeling [or Learning]
Further split into:
i. Attention: understanding the modeled behavior
ii. Retention: remembering the modeled behavior
iii. Replication: replicating the modeled behavior
iv. Motivation: what makes the subject want to replicate the
behavior
2. Intrinsic reinforcement
While peer dynamics play a part in how people behave, reinforcement and
motivation does not have to come from outside sources [3]. Intrinsic
reinforcement as a form of internal rewards, such as pride, satisfaction, and a
sense of accomplishment [18].
One might start working out because his friends invited them, but the
motivation to ultimately have a fit and toned body must come from within,
particularly as proper training takes months and sometimes years before one
starts to notice the changes in their body.
3. Learning and behavior change
Behavioral psychology dictates that to learn, one must change their behavior.
Bandura proposes that learning will not necessarily change one’s behavior, but
rather learn it without demonstrating any behavior change [17] through
Modeling, which are explained above.
When it comes to video games, Bandura’s social learning theory has traditionally been
used to explain the link between video games and violent behavior. It is still being
researched, and some argue in favor of a link while others deny it [20]. This research
will instead focus on the link between video game peers’ behavior and the player’s
microtransaction spending habits.
3 Research Design
3.1 Type of study
When it comes to research, either a quantitative or qualitative approach is commonly
used [21]. Quantitative research is used to test and/or confirm theories, while qualitative
research is used to understand concepts and experiences [19]. As a result, quantitative
data are often expressed in graphs and numbers; qualitative data are explained in words
and stories.
572 J. Haka and P. N. A. Mukadis
As this research’s goals are to determine whether there is a correlation between players’
peer behavior and their microtransaction spending habits, this research will take a
quantitative approach.
Unit of measurement [also known as “unit of observation”] refers to the data that is
actually collected [18]. Since this study aims to determine if players’ peers actually
have an impact on their spending habits, this research’s unit of observation will be the
players that will actually be surveyed.
This research’s population refers to players who play video games with any form of
microtransaction in the Tangerang area. Players surveyed are from the ages of 16 to 30
as the vast majority of Indonesian gamers are around that range [23]. It includes various
video games with differing genres as microtransactions are not limited to a single genre.
Once the sufficient number of responses are collected, a series of tests will be
performed. These tests will be outlined below.
This research has multiple independent variables, but only one dependent variable.
Hence, a multiple linear regression is performed to determine the relationship between
the variables.
574 J. Haka and P. N. A. Mukadis
The model summary table has an adjusted squared R value of 0.916, which indicates that
both independent variables account for 91.6% of the dependent variable’s variability, adjusted
for the number of independent variables.
Next, the coefficient table provides the values needed for the regression formula. The formula
for a multiple linear regression is as follows:
𝒀 = 𝜷𝟎 + 𝜷𝟏𝑿𝟏 + 𝜷𝟐𝑿𝟐
Where:
Y : dependent variable
β0 : y-intercept (the value of Y when all X values are 0)
β1, β2 : the coefficients for the independent variables X1 and X2, representing the
change in Y for a one-unit change in the corresponding X.
X1, X2 : independent variables
Finally, hypothesis tests are required to confirm the hypothesis. This research uses the t -test
and F-test; the results are summarized in the table below:
From these results, it can be concluded that both hypotheses are accepted.
Albert Bandura’s social learning theory has long been utilized to explain behavioral patterns,
but exploring human interaction with digital technology is a relatively recent phenomenon
(Hill et al., 2009). The data from this research suggest that the more a player’s peers purchase
microtransactions, the more likely it is for the player themselves to follow suit. With more
purchases, a sense of normalization is also imparted on players, leading them to accept that
buying these slot machine-style microtransactions is a normal thing (Turkay et al., 2014).
Previous studies mentioned the influence of one’s uses and gratifications on behavior. In
augmented reality (AR) online game Pokémon Go, players have been found to use their own
needs and wants as the drive to continue playing. Research by Wu et al. (2010) also attributed
players’ desire and motivation to continue playing to their own volitions and desires.
5 References
[1] Wittgenstein, L. Philosophical Investigations: The German Text, with a Revised
English Translation 50th Anniversary Commemorative Edition [G. E. M. Anscombe,
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[2] McCormick, E. “Industrial and Organizational Psychology Prentice hall,” 1985.
[3] Dubois, L.-E., & Weststar, J, “Games-as-a-service: Conflicted identities on the new
front-line of video game development,” Sage Journals.
[4] Ingram, Sales management: Analysis and decision making. Routledge, 2019.
[5] Toto, S. “Gacha: Explaining Japan’s Top Money-Making Social Game Mechanism
[Social Games] – Kantan Games Inc. CEO Blog – From Tokyo, Japan. Kantan
Games.,” Kantan Games.
[6] Turkay, S., Hoffman, D., Kinzer, C. K., Chantes, P., & Vicari, C, “Toward
Understanding the Potential of Games for Learning: Learning Theory, Game Design
Characteristics, and Situating Video Games in Classrooms.”
[7] Astle A, “Genshin Impact surpasses $3.6 billion revenue ahead of second anniversary.
Pocket Gamer.biz.”
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