Problem
In competitive online games, players can often spend money to gain an advantage over opponents. These purchases are known as 'pay-to-win' add-ons. Games such as Call of Duty: Warzone, which has more than 100 million players, sell weapons and equipment that meaningfully improve a player's chances of winning. The global market for in-game purchases reached $82 billion in 2024. Yet game developers face a genuine dilemma: selling a pay-to-win add-on can drive away the players who don't buy it, and if those players leave, the add-on becomes less valuable to everyone.
Science
We built a mathematical model to examine when a developer should sell a pay-to-win add-on, how powerful it should be, and what it should cost. Our model captures two distinct types of players: those willing to spend more and those who are price-sensitive. We also factor in how players react to winning and losing, since the emotional pull of victory and the sting of defeat are the core drivers behind these purchases. Ultimately, our model is designed to be versatile enough to capture vastly different game types, from highly competitive shooters to casual open-world games.
Outcome
We find that selling a pay-to-win add-on is not always profitable. When most players are big spenders and their competition sensitivity is low, the developer earns more by not selling the add-on at all. When it is worth selling, the developer should make wins feel rewarding and losses feel meaningful, but not so painful that price-sensitive players quit. Counterintuitively, the add-on should be made less powerful in highly competitive games, not more. And introducing a pay-to-win add-on can benefit players: to keep price-sensitive players in the game, the developer cuts the base game price and may invest more in game quality.
Change
Our research gives developers a clear framework for deciding whether, and how, to introduce pay-to-win add-ons. The decision depends on the mix of players in the market and how emotionally invested they are in winning and losing. Developers should invest in understanding these psychological traits through market research, not just spending data. Regulators and consumer protection bodies examining in-game monetisation may consider that pay-to-win add-ons have, under the right conditions, a potential to benefit both players and developers.
Mushegh Harutyunyan, ³Ô¹ÏºÚÁÏ; Esma Koca, ³Ô¹ÏºÚÁÏ
'Pricing and design of pay-to-win add-ons', Management Science, vol. 72, no. 6, 2026, pp. 5131–5149