Do Non-monetary Virtual Gifts Enhance or Diminish Voluntary Paid Gifts? Evidence From a Video Game Live Streaming Platform

This paper empirically investigates how a video game live streaming platforms’ effort to reward time spent on the platform has an unintended consequence on video game streamers. Live streaming platforms employ various strategies to encourage viewers to consume content on their platform. A newer strategy that has recently gained traction is granting ‘coins’ to viewers for spending time on the platform. Viewers can use 'coins’ to purchase various digital services, such as passes for premium streaming events. Viewers can also exchange their ‘coins’ for ‘stickers’: non-monetary gifts that can be given to streamers during live-streams. It is unclear whether increased access to non-monetary gifts will substitute or augment viewers’ monetary gift sending behavior. Decreased monetary gift giving will cause issues for streamers, as the revenues mainly consist of these donations. To determine how a platform policy will influence gift giving behavior, we work with a major live streaming platform in Asia and analyze individual-level virtual gift sending records between May and December 2019. The analyses reveal that granting ‘coins’ not only increased how often viewers sent non-monetary gifts but also that they increased monetary gift sending by 15.95%. Extended analyses suggest non-monetary gifts resemble free samples in the traditional consumer goods sector, and that getting into a non-monetary gift sending habit can enhance rather than substitute monetary gift sending. We also provide evidence of attention-seeking gifting behavior: viewers send more expensive monetary gifts after other viewers have sent non-monetary gifts. Our research contributes to the live streaming and platform policy literature and offers guidance to live streaming practitioners in engagement feature designs