If you’ve ever wondered why mobile games keep pestering players to buy stuff, here’s why.

PUBG Mobile, developed by Tencent, has now pulled in more than US$1 billion in revenue, according to Sensor Tower. In August alone, the game made US$160 million, a 540% increase over last year. 

Part of that massive jump is down to the Chinese variant, called Game for Peace. The original PUBG Mobile wasn’t allowed to make money from players in China. But when Tencent replaced it with Game for Peace -- where, among other things, players who are shot and defeated aren’t killed, but instead wave farewell to their opponents -- the Chinese government granted them a license to monetize, opening the floodgates.

“I can’t believe I participated in a US$1 billion project,” one Chinese gamer joked on Weibo.

If you think Chinese gamers are irked by having Tencent -- China’s biggest gaming company -- switch from the completely-free PUBG Mobile to the microtransaction-filled Game for Peace, you couldn’t be more wrong. 

Spending money in the game gives people no advantage in gameplay. You don’t get better guns, better armor, or any other advantage to defeat other players. What you do get, however, are cosmetic items like costumes and skins. And players absolutely love spending money on their own vanity.

“I want to upgrade my wardrobe in the game,” a Game for Peace player wrote on Zhihu. “At the time, [I paid] to get that infamous TV head helmet. I think I spent a few thousand yuan.” 

People are buying more than just helmets, though. Players can deck out their in-game avatars with all kinds of different apparel… even a bright pink bear costume that makes you a bigger target on the battlefield.

A gamer flaunts his new costume on Zhihu: “I have so far spent about 500 yuan on the game. It indeed looks good. But it makes me quite an easy target.” (Picture: Zhihu)

Buying cosmetic items in games might not be anything new, but PUBG Mobile has helped kick it up a notch with its effective use of the season pass system -- or the Royale Pass, is it’s called in the game.

Season passes are bundles of perks, cosmetic items and time-limited activities, which includes stuff exclusive to pass holders. PUBG Mobile now has more than 400 million active installs around the world. With that many players, there are enough avid PUBG fans buying these exclusive perks to make Tencent a nice chunk of cash.

When Game for Peace released its third round of season passes in China, more than a million of them were sold in less than 12 hours. A standard pass for the game costs US$8.5, but the deluxe pass costs US$23.

“The new season of Game for Peace has started again. After reading what the season pass has, I once again couldn’t help but top-up money in the game,” a Chinese gamer said on Weibo.

This popular meme circulating online depicts what it feels like to be a PUBG Mobile player who isn’t buying all the cosmetic goodies on offer. (Picture: Zhihu)

Exclusivity is a key feature of season passes and what makes them so effective. It preys on the fear of missing out. 

“It largely does not affect the main game -- i.e. competitive balance, segregating the player base, etc. -- but adds desirable cosmetics and even a separate progression track to encourage play time,” said Johnson Siu from Hong Kong-based game company Pixio.

Season passes have really only been around for the last decade, but they’ve become an important part of gaming revenue. Fortnite’s Battle Pass arguably made it the world’s most popular and profitable game in 2018.

Now that Tencent has tapped the China market with Game for Peace, PUBG Mobile has eclipsed Fortnite. Within its first three days on iOS, Game for Peace made US$14 million. Together with PUBG Mobile, it’s made an average of US$130 million in each of the months that followed.

Tencent did not respond to our request for comment. But the impact of season passes hasn’t gone unnoticed by Tencent CEO Pony Ma. In a recent earnings call, Ma affirmed the importance of season passes in the company’s flagship games, saying the company had expanded the service in recent months.