June 24, 2016
The New Yorker: CLASH OF CLANS PROVES THAT OUR IMPATIENCE IS WORTH BILLIONS
This week, the China-based company Tencent Holdings paid 8.6 billion dollars for a controlling stake in Supercell, and therefore a stake in our need for instant gratification. Tencent is the biggest Internet company in China, with a market value of more than two hundred billion dollars. It controls one of China’s biggest Web portals, the messaging app WeChat, with seven hundred million active users, and League of Legends, an online multiplayer game that reportedly had 1.6 billion dollars in sales in 2015.
Good grief. Our founding fathers are rolling over in their "service economy" graves right now. I hope you realize that.
One writer described racking up nine thousand dollars in expenses in Game of War: Fire Age, a mobile game that featured Kate Upton in an ad that ran during the 2015 Super Bowl. Many people—“healthy people,” Baron clarified—choose to spend that money because the feelings they get from the game are worth it to them. “They’re willing to spend five bucks to save themselves three days’ worth of time, because they value what they want to value.”
$9,000 for instant gratification? Are we insane? This type of gamer is basically paying for me, so I don't need to.
Take Real Racing 3. I'm addicted. I've spent a grand total of $5.46 (on a starter pack which removed some in-game advertising). I've played 2,813 hours so far and reached level 633. I've accumulated 41,701 gold (most of it spent). I consistently rank in the top 5% in the weekly time trials. I currently own all 151 cars and show 100% completed (until the next update). That's right, I've been seriously addicted. It's been fun though. No complaints.
A few days ago they offered to sell me 1,019 gold for $19.99. That's an 80% discount to their normal price of $99.99. At my level, it would take roughly 70 hours of game play to earn that much extra gold.
On the one hand, paying $20 to save me from playing 70 extra hours would seem like a very good deal.
On the other hand, why on earth would I pay NOT to play the game? I either like the game, or I don't. If I no longer enjoy the game, then there is a much cheaper alternative. It costs me absolutely nothing to quit!
It's insane to think that I would pay $20 to free me from having to play the game. Where would it end? Could they tempt me to pay another $20 not to play again? Perhaps. It's insane!
The funny part is that even as a patient and frugal gamer, I could feel the temptation. I'm starting to burnout on the game a bit. If I paid the $20, I could back away from the game. That's when it hit me. The worst possible time to spend $20 on a game is when you are starting to burnout! What an epiphany! Hahaha!
Electronic Arts can pry the $20 from my cold dead fingers. They'll have to wait in line though. Over the years, there are so many things building up. Take my savings bonds and long-term inflation protected treasuries, for example. Years ago I said they could pry them from my cold dead fingers too, as I intended to hold to maturity. With interest rates as low as they are today, I'm clutching them tighter than ever. Go figure.
We live in a very impatient and fast-moving world. You want to know what concerns me most though? How many more impatient itchy trigger fingers are hovering over the global economy's stock market sell buttons? The wealth effect could very easily continue to unravel. What goes up quickly and seemingly effortlessly can also come down quickly and seemingly effortlessly. Can't really have one without the other. Neither quick moves up nor quick moves down imply strong and resilient stability. Sigh.
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