Transcript
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CHAPTER I
INTRODUCTION
This chapter focuses on the background of the research, discussing the general
background of MOBA mobile games and in-app purchases, which includes data, facts,
statistics, and trends regarding the mobile gaming industry, specifically MOBA mobile games.
From the gathered data, the research problem is discussed, which generated questions
regarding the research that are useful to answer the objectives of the research. The purpose of
the research with its limitation also being presented in this chapter. Attached below is a flow
chart of this chapter outline.
Figure 1.1 Chapter I Flow Chart
Source: Created by the author for the purpose of this research (2019).
1.1 Research Background
Mobile games are popular in this era, indicated by the presence enthusiastic behavior
towards mobile phones that combine both mobility and entertainment to satisfy their needs.
The growth of operating systems of mobile devices, the presence of dependable internet
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service provider, and hardware which ensures a high quality mobile devices’ performance,
has been an ideal condition for the mobile gaming industry to make more room for
improvement and increasing competition among the industry (Skobeltcyn & Shen, 2018, 12).
According to Newzoo (2018), mobile devices which facilitate mobile gaming such as
smartphone and tablet were able to contribute approximately around 50% of gaming market
worldwide, which is around $70 billion global revenue. Figure 1.2 below shows the global
games market 2018 report.
For the mobile game developers to gain income from their games, they must apply a
good business model to achieve maximum profitability. There are three major types of
business models that revolves around the mobile gaming industry. These include premium
mobile games, in-app advertisement, and in-app purchase model (Han & Windsor, 2013, 618).
According to Statista (2017), 79% of gaming applications worldwide prefer in-app purchase
as their main source of revenue. In-app purchase is considered to be most popular among
game developers. With the total revenue of $37 billion from in-app purchase in 2017, in-app
purchase overtake both in-app advertising which generate $33 billion and paid-to-play games
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with $29 billion in revenue (Statista, 2017). Furthermore, the revenue generated from mobile
games in worldwide region, has shown constant growth from 2014 to 2019 (refer to figure 1.3
below).
Figure 1.3: Revenue from Mobile Games segment from 2014 to 2019
Source: Statista (2019)
The gaming industry in South-East Asia is considered to be having the fastest growth
within the gaming market. Indonesia has a total of 43.7 million gamers in 2017 with total
revenue of $880 million, making them ranked #16 globally in revenues for gaming. In
addition, revenues from mobile gaming industry in Indonesia has generated around $624
million by the half of 2019 (Statista, 2018).
In mobile gaming, one of the most popular genres in Indonesia is MOBA genre. As an
example, Mobile Legends: Bang Bang is classified as Multiplayer Online Battle Arena
(MOBA) as its genre, a type of game where two teams compete to reach a goal which will
result in a victory to one side of the teams (Tyack, Wyeth, & Johnson, 2016, 313).
Similar to most MOBA mobile games, Mobile Legends: Bang Bang rely upon
purchasing behavior towards the in-app purchasing system in order for the game to make
profit (Mäntymäki & Salo, 2013, 282). The in-app purchase that MOBA mobile games feature
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virtual currency, virtual goods and premium services as its purchasable features. The growth
in the mobile game industry is unquestionable, especially with the technological advancement
in developing countries, giving access to new users as time goes by.
However, mobile game developers are faced with the problem of where the users who
are able to freely download their games have the possibility to be reluctant towards doing any
in-app purchase or transaction inside their game (Han & Windsor, 2013, 618). Furthermore,
if a user decides to not make any in-app purchase in the game, there is a high possibility that
the user refuses to adopt the in-app purchase system of the game (Guo & Barnes, 2011, 306).
According to KumparanTECH (2017) Mobile Legends: Bang Bang managed to capture eight
million daily active users. Meanwhile, in 2017 they only managed to generate a total of $5.3
million in revenue (Lopez, 2017).
Calculating the Revenue-per-user (RPU) ratio, they were only able to generate
approximately 0.66 dollar per active user. This shows a huge gap between the players who
play for free and the players who actually make in-app purchases. According to Sifa, Hadiji,
Runge, Drachen, Kersting, & Bauckhage, (2015, 79), the vast majority of free-to-play players
are made up of non-spending players. This leads to the question of how MOBA mobile games
can encourage free-to-play users to make in-app purchases.
There are several past studies that have done a research towards what drives users to
make in-app purchase towards an app (Gainsbury, King, Russel, & Delfabbro, 2016; Han &
Windsor, 2013; Hsu & Lin, 2016). In specific, research on the MOBA mobile games topic is
very limited (Akbar, Irianto, & Rofiq, 2018; Damariva, Santiya, Hutomo, & Ardiko, 2018).
Hence, this research’s objective is to examine the relationship between variables and their
influence toward in-app purchase intention towards MOBA mobile games in Indonesia.
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1.2 Research Questions
Based on the previously discussed research background, the research questions that
are being aimed by this research are:
1. Does utilitarian value and hedonic value affect attitude and satisfaction of
virtual goods on MOBA mobile games?
2. Does subjective norms and social identification affect purchase intention of
virtual goods on MOBA mobile games?
3. Does attitude affect stickiness towards MOBA mobile games?
4. Does satisfaction affect stickiness towards MOBA mobile games?
5. Does social influences affect stickiness towards MOBA mobile games?
6. Does stickiness affect purchase intention of virtual goods on MOBA mobile
games?
1.3 Research Objectives
1. To determine whether utilitarian value and hedonic value affects attitude and
satisfaction of virtual goods on MOBA mobile games or not.
2. To determine whether subjective norms and social identification affects
purchase intention of virtual goods on MOBA mobile games or not.
3. To determine whether attitude affects stickiness of virtual goods on MOBA
mobile games or not.
4. To determine whether satisfaction affects stickiness of virtual goods on MOBA
mobile games or not.
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5. To determine whether social influences affects stickiness of virtual goods on
MOBA mobile games or not.
6. To determine whether stickiness affect purchase intention of virtual goods on
MOBA mobile games or not.
1.4 Research Purposes
1. Testing the applicability and the relationship between of the ABC model theory
and purchase intention in the Indonesian MOBA mobile gaming market.
2. Helping the Indonesian mobile gaming industry on interpreting purchase
intentions of MOBA mobile gamers with the result of this research.
3. To develop and update the theory of ABC model and purchase intentions with
the latest market situation.
4. This reasearch will contribute in the increase of the knowledge source
regarding market research of MOBA mobile games in Indonesia.
1.5 Research Limitations
1. The result of this research may not be fully applicable to the entire mobile game
industry since it focuses only on MOBA genre.
2. Since the majority of the respondents would be gamers with no age limitation,
the result of the research may not be fully reliable to determine the purchase
intention of people from different generations.
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3. The research source of respondent is only limited to mostly West Java region,
mostly Jakarta, Tangerang, and Bekasi, which is making this research might
not be applicable to broader areas.
1.6 Research Method Overview
This research is inspired by an already condcuted research by Chin-Lung Hsu and Judy
Chuan-Chuan Lin in 2016 with the title “Effect of perceived value and social influences on
mobile app stickiness and in-app purchase intention”.Inspired by their research, this research
adopts eight variables from the mentioned research including hedonic value, utilitarian value,
attitude, satisfaction, stickiness, social norms, social identification, and intention to purchase.
This research also adopots the ABC model of attitudes as a base for model development from
the previous research by Hsu and Lin (2016). However, Hsu and Lin (2016) applied the
research on the whole general mobile application and does not specify what type of app they
did the research for. Compared to that previous research, this research is focused specifically
on the MOBA mobile game genre.
First of all, the researcher applied research paradigm which is fundamental in
conducting a business research (Sekaran & Bougie, 2016, 28). There are five types of
applicable research paradigm which are positivism, post-positivism, construction, critical
realism, and pragmatism. The researcher applied post-positivism as the research paradigm for
this study. Post-positivism is suitable for quantitative and close-ended questionnaires, which
is the method of data collecting this research are using (Scotland, 2012, 10).
Secondly, the researcher needs to decide the method of how to approach the research.
The research can be approached with two methods, namely qualitative and quantitative. The
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researcher is using quantitative method as its research approach. Quantitative research can be
defined as a research that seeks to explain a certain phenomenon through statistical analysis
on numerical data (Yilmaz, 2013, 311).
Thirdly, the researchers need to choose the type of the research. According to Sreejesh,
Mohapatra, and Anusree (2014), there are three types of research. These include descriptive
research, exploratory research, and causal research. The researcher has chosen to use a
descriptive research design, since it allows the researchers to gather information through
questionnaires (Sreejesh et al., 2014, 58).
Fourthly, the researcher needs to choose the appropriate unit of analysis. According to
Sekaran and Bougie (2016), there are five main categories to be the unit of analysis in
research. The main categories are individuals, dyads, groups, organizations, cultures. The
researcher has chosen to use individual as unit of analysis, since each of the data must be
analyzed separately.
In the fifth step, the researcher needs to choose one out of four types of measurement
scale. Scale measurements are differentiated into four types, namely nominal scale, ordinal
scale, interval scale, and ratio scale (Sekaran & Bougie, 2016, 207). The researcher has chosen
to apply interval scale. According to Hair, Celsi, Money, Samouel, and Page (2016, 230),
interval scale does more than ordinal scale in terms of its ability to quantitively measure the
differences between the points, giving the researchers the ability to interpret and compare
them using those informations. The specific type of interval scale that has been chosen is
Likert Scale. Likert scale is a type of interval scale which does the measurements of attitudes
or opinions. It is oftenly done using a five-point scale to determine the strength of agreement
or disagreement about a particular question or statement (Hair, et al., 2016, 237).
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In the sixth step, the researcher needs to choose the type of data collection. There are
two types of data to obtain contextual information, namely secondary data and primary data
(Sekaran & Bougie, 2016, 37). The researcher has chosen to use primary data collection
method, conducted through questionnaire strategies. According to Nardi (2018, 16),
questionnaire is suitable for gathering opinions and attitudes.
In the seventh step, the researcher needs to choose the type of questionnaire. There are
three types of questionnaires that can be used for the research, namely personally administered
questionnaires, mail questionnaires, and electronic or online questionnaire (Sekaran &
Bougie, 2016, 144). The researcher has chosen online questionnaire distribution which will
be distributed through Google Form. The data obtained from Google Form is then converted
into excel format, in preparation for data analysis.
In the eighth step, the researcher needs to choose a sampling method. There are two
sampling techniques, namely probability sampling and non-probability sampling. For this
research, the non-probability sampling has been chosen. Non-probability sampling is chosen
because the elements in the population doesn’t have the chance of being selected as sample
subjects (Sekaran & Bougie, 2016, 240). Furthermore, non-probability sampling has three
types of method to implement from. These are judgement sampling, convenience sampling,
and quota sampling. The researcher has chosen judgement sampling, which is suitable for the
questionnaire since it needs the respondents’ knowledge about the matter in the questionnaire
(Sekaran & Bougie, 2016, 241).
In the ninth step, the researcher needs to test the validity and reliability of the collected
data. SPSS 21 software is chosen to check the reliability of the data through Corrected Item-
Total Correlation. This is done for the purpse of checking whether any of the indicators need
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to be deleted in order to increase the variable’s reliability. Moreover, the researcher has chosen
to use SmartPLS 3.0 Software to check validity and reliability of the gathered data. SmartPLS
3.0 Software allows the researchers to conduct Partial Least Squares Structural Equation
Model (PLS-SEM) to analyze the data.
1.7 Research Outline
This research consists of five chapters which follows previous researches done
according to UPH standards. The five chapters are arranged systematicly and in sequential
order to give the readers ease in following through this reasearch. These chapters are:
Chapter I: Introduction
The first chapter of this research discusses the general background of mobile games
and in-app purchases. Furthermore, this chapter includes data, facts, statistics, and trends
regarding the mobile gaming industry. In this chapter the researcher also addresses the
research problem, research questions, objectives, purposes, limitations, as well as the research
outline.
Chapter II: Literature Review
In this chapter, the researcher mainly discuss concepts and theories utilized as the
foundation of this research. Various research journals become the references for the conduct
of this study, and the findings within it are the basis to elaborately define the concepts and
theories even further. Variables of this research are also discussed thoroughly in this chapter.
Lastly, this chapter also reveals the previous research and the research model that have been
benchmarked in order to produce the current research.
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Chapter III: Research Method
The third chapter is solely dedicated to explain the methodology that is adopted to
conduct this research. Basic requirements that are fundamental for this research such as
research design, research object, sampling and data collection method are discussed in this
chapter. In addition, the reseacrh model and data analysis method are also included in this
chapter.
Chapter IV: Results and Discussion
The fourth chapter could be considered as the backbone of the research as it elaborates
the findings of the research and the result of the data collection itself. This chapter shows how
the data is tested with rigorous data analysis method to ensure its validity and reliability.
Finally, the result acquired from this chapter is compared to the previous research that
becomes the benchmark of the research.
Chapter V: Conclusion
The last chapter reveals the conclusion and translates the result of the research into
real life application. This chapter also include limitations and suggestions for future studies
regarding the same topic or area, hence it may become a suitable reference for other
researchers in conducting similar research. Lastly, implications of the research are being
derived in this chapter; consisting of both theoritical and business implication of the research.
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