In recent months, a woman in Washington, filed a lawsuit against a Türkiye-based company that developed the world’s highest-grossing mobile game. She accused the company of engaging in illegal gambling activities by using deceptive tactics to entice players to spend money.
The game, often advertised as “completely free” in mobile ads, is a prime example of the ‘freemium‘ digital marketing strategy. The term freemium, derived from the words ‘free’ and ‘premium,’ describes a business model commonly used for digital products, particularly mobile games.
In this model, games can be downloaded for free, and basic functionality is accessible without any cost. However, players are often compelled to make ‘optional’ in-app purchases to access additional content, features, or advantages. While these payments are portrayed as voluntary, progression to advanced levels, gaining competitive advantages over other players, or playing without time restrictions frequently depends on these purchases.
Such payments are typically referred to as ‘microtransactions‘ involving small amounts that users often pay impulsively without much consideration. However, targeting vulnerable groups, such as children or individuals prone to gambling addiction, can lead to uncontrolled spending through microtransactions, which can cumulatively result in significant financial burdens.
Returning to the aforementioned lawsuit, the plaintiff claimed to have unknowingly spent over $900 on the game in a short period due to the company’s deceptive practices. She alleged that the misleading advertisements and in-app purchase strategies led her to spend amounts she wouldn’t ordinarily have spent.
The plaintiff also accused the company of manipulating win rates to maximize player dependency and encouraging repeated spending to continue playing. She highlighted how these tactics resulted in unjust enrichment for the developers, who reportedly earned over $1 billion from U.S. consumers alone. The lawsuit further argued that the freemium model resembled gambling, as it involved “risking money for a potential reward” an activity prohibited under state laws.
Academic studies and health authorities have long warned about the addiction risks associated with mobile games. Although marketed as free, freemium-based games pose significant threats due to their design, which incentivizes spending through psychological triggers similar to those used in casinos.
Although similar lawsuits have been filed in the past, this case is particularly significant. It could shape the future of the controversial ‘freemium revenue model‘ in the digital age due to the reasons outlined above.