“Mom, can you pay me my allowance in Robux this week? I’m going shopping with my friends for new verch and I spent all my Robux last week.”

Confused? That’s understandable. If you’re not familiar with the popular video game platform Roblox, that question might sound like gibberish.

Concerned? You’re not the only one. Parents and guardians across the country are coming to grips with some undesirable financial conduct that their kids develop in an unlikely place: video games.

Around 42 million of the more than 200 million video game players in the United States in 2023 are under the age of 18. If you’re not one of those millions, it may surprise you to learn that most video games, including phone and computer apps, are full of chances for the player to spend money on in-game purchases. These purchases can range from extending a game with an extra level to buying Louis Vuitton handbags for a virtual character.

It’s big business for video game companies and a headache for anyone with a child who likes to play video games. Beyond the task of ensuring accidental purchases aren’t made while playing a game, parents and guardians must be cognizant of their child developing a warped understanding of how real money works or harmful money management habits from the unstructured financial independence of virtual spending. 

So many chances to spend

Just like most phone apps ask you to upgrade or purchase additional features, video games and gaming apps prompt the user to spend money frequently. In general, these transactions, also known as microtransactions, are directly related to gameplay and offer chances to enhance or add to the game.

“Want a new set of armor for your character? The price is $20.”

“Unlocking that secret level will cost $30.”

“Try these new power-ups for crushing candy! It’s $5 for three.”

Common scenarios like these where the player has to pay to succeed in a game are known as “pay to win.” Games that are free to download but have premium features that players have to pay for are called “freemium.” A majority of today’s most popular video, computer, and phone games are freemium or have pay-to-win elements, and players that choose to pay spend up to $76 on average per month.¹

The virtual shopping mall

A different spending scenario takes place on gaming sites, or “platforms” like Roblox.com. While standalone games like Fortnite offer different ways to play (by yourself, with a team, etc.), platforms offer different types of games entirely (racing, shooting, strategy, etc.) all in one place. The upfront cost to play on platforms can be low — Roblox accounts are free — but microtransactions are still prevalent.

The platform is a virtual world, or metaverse, and gamers create a virtual version of themselves, called an avatar, to engage in the games and other activities offered on the platform. Players can hang out with virtual versions of their friends on platforms and do activities they might do in reality, like shopping or even attending live events. Gamers can buy virtual merchandise, or “verch,” such as clothing, accessories, or other cosmetic items to enhance the appearance of their avatar, even if the purchases have nothing to do with gameplay. It’s social spending in a virtual world.

Robux, V-Bucks, and Minecoins

Many of the most popular platforms and games have taken in-game purchases a step further and created their own currency for use in their game:

• Robux is the in-game currency for Roblox.
• V-Bucks is the currency used in the popular game Fortnite.
• Minecraft players can use Minecoins for in-game purchases.
• Pokémon Go’s virtual currency is PokéCoins.

These are just a few of the many video game currencies that players use to make purchases once they are on the gaming platform or in a game. The currencies are purchased with real money and there are exchange rates for them. Rates fluctuate, but as of July 2023, $10 is equal to around 800 Robux, 1,252 V-Bucks, 1,700 Minecoins, and more than 36,000 PokéCoins.

Fake currency, real financial concerns

With virtual currency values so different from the value of dollars, and the pressure to spend consistently present, it can create a confusing, and perhaps concerning, environment for someone learning how to manage real money.

For instance, if a designer backpack costs 125 Robux on Roblox, which is only about $1.50 in U.S. dollars, the player might get an unrealistic impression of what goods cost in the real world. You will not find many backpacks for that price at Target. But someone who doesn’t shop for themselves yet, especially if they’re spending their parent or guardian’s money in the game, might not make that connection.

There are also instances on gaming platforms in which goods are sold as part of a random pack where the user does not know what they are getting when they buy. Experts warn that this is a concept similar to gambling and not great for young learners who won’t understand the implications unless they are explained by a parent or adult.  

Virtual financial independence

Games and gaming marketplaces could also lead to the player developing a mindset in which virtual currency is more valuable than real money. Most kids are not purchasing their own clothes or accessories online, but in a metaverse, they have the independence to spend. This amount of control can potentially make real currency less appealing.

And for a child who is learning about money management, unsupervised virtual spending has the potential to create bad habits for budgeting and saving money as they are constantly encouraged to spend what they earn. Virtual spending, like most online activities for kids, should be monitored closely by parents and guardians to combat these unideal money-management practices.

Developing good financial habits and understanding

Video games are not going anywhere, and they are not all inherently bad. The good news is that with a little planning and time invested, your child can enjoy video games with the added benefit of developing a positive relationship with money.

First, for basic spending control, each game or platform has settings and tools designed both for the benefit of children and the financial security of their adults. For developing habits and education, there are several common-sense ways to help children while still letting them enjoy video games. They include:

• Playing the games with your child. This allows the parent or guardian to understand what they are seeing and provide context to the spending that occurs.
• Involving the child when shopping for groceries, clothing, and other goods. Start a dialogue about what real products cost so they can understand the difference between what they buy in the game and real-life expenses.
• Giving the player a budget for in-game purchases. This can help them take responsibility for their own spending and connect how much their virtual spending costs in reality.

By observing and engaging with your child, you can help ensure they are forming an understanding of money and money management that is firmly based on reality.

Get started with the game

Video games with virtual spending could themselves be seen as a natural starting point for teaching good money habits. Since the gamers are or will be presented with opportunities to spend, the game can easily lead to conversations about saving, spending, or earning money — even if V-bucks can’t be used in physical stores. Starting conversations about money when children are younger is not always easy, and games can be a way to teach while having fun, so take advantage while you can!

There are other resources to help as well, from books to apps to T.V. shows. And don’t forget that your community bank is here too. We offer accounts designed for kids, tweens, and teens, classes about money management, and clubs that get young people learning about money and involved in fun, free activities throughout the year.

If you’re interested in teaching your child good financial habits, we have products and information to help you get started today.