How games and apps get you to invest

The endowment effect is a fascinating psychological phenomenon that explains why we value things more when we feel a sense of ownership. In both video games and real life, this principle influences how we interact with and perceive products, decisions, and experiences. Let’s unpack this using examples from subscription services, Mad Max, Skyrim, and even Nike’s shoe customisation platform.

Subscription Services: Leveraging Free Trials

Platforms like Netflix or Spotify offer free trials that let users explore and personalise their experience. Once people have curated playlists or invested time watching shows, they feel attached to the service, making it harder to let go. This strategy not only boosts initial user engagement but also creates a psychological barrier to discontinuing the service. The sense of ownership over what users have built—playlists, watchlists, or preferences—keeps them coming back.

The Endowment Effect in Video Games

Mad Max: Building Your car

In the Mad Max game, you are given a basic, unimpressive car. To asked to turn it into the fearsome “Magnum Opus,” you must gather resources, make design choices, and customise its features. Every choice—the type of engine, weapons, or paint job—adds a layer of personalisation. By the time you’ve built your ultimate death machine, it feels like a part of you. This sense of ownership stems from the effort and decisions you’ve invested.

The game designers could have given you a pre-built, high-performance car. But would it feel as satisfying? Unlikely. The process of creating and shaping the vehicle makes it uniquely yours. That’s the endowment effect in action.

Skyrim: The Power of Customisation

In Skyrim, character creation is a pivotal moment. You pick your character’s race, appearance, and skills, tailoring them to your vision of the perfect hero. Even though *Skyrim* is a first-person game where you rarely see your character, the customisation fosters a deep connection. As you level up and make choices that shape their abilities, your character becomes an extension of your identity. This personal investment keeps you engaged and enhances your enjoyment.

Why the Endowment Effect Works

At its core, the endowment effect thrives on two factors:

1. Personal Investment: Whether it’s time, effort, or creativity, the act of contributing to something makes it feel more valuable.

2. Psychological Ownership: When you shape or personalise a product, you start to see it as “yours” even before you officially own it.

Conclusion

The endowment effect reminds us that ownership isn’t just about possession; it’s about connection. Whether you’re upgrading a car in *Mad Max*, levelling up in *Skyrim*, or designing your own shoes, the sense of investment and personalisation transforms the experience. For businesses and creators, understanding this principle isn’t just smart psychology—it’s good strategy.