Dear Dr. Per Cap:

Last week I discovered three charges from Xbox on my debit card.  Turns out my teenager purchased V-Bucks to buy “skins” and “dances” while playing Fortnite.  $75 to buy virtual items in a video game!  I didn’t know there even was such a thing. What’s this all about and how can I teach my son not to spend money on stupid stuff?

Signed, Don’t Get It

Dear Don’t

Let’s chalk this up to another example of technology exciting some people while leaving others scratching their heads.  I agree that spending real dollars, in this case your dollars, for in-game currency to dress up video game avatars might seem crazy but times have changed since I used to burn through a roll of quarters playing Pacman at Circle K.

I’m also old enough to know that what sounds like a ridiculous purchase today might make more sense in a few years.  Case in point – the first time I bought bottled water from a store.  We’re talking early nineties and when I came home my older sister looked up from her People magazine featuring Rodney Grant just long enough to tell me I was nuts to pay for a beverage I could drink for free.  Click ahead a few decades and when was the last time you took a sip from a drinking fountain?  

So why are V-Bucks a big deal?  In-game purchases or microtransactions add up to big bucks for video game companies.  Fortnite is free to play but the game is a lot more fun if players spice things up with digital accessories and special features purchased with the game’s exclusive currency, V-Bucks.  $1 buys about 100 V-Bucks which might not sound like much but Fortnite has earned billions of dollars in revenue almost entirely from V-Buck microtransactions like those your son made.  This is an enormous industry that is only going to keep growing.  In fact the video gaming industry is now larger than the music and film industries combined – sorry Wind In His Hair!

You’re not the first parent to experience frustration.  Some are even lawyering up like one California parent who sued Epic Games, the parent company of Fortnite, with claims that parents are unable to monitor children’s in game purchases or track spending.  It’s also a slippery slope for kids who might struggle to grasp the significance of purchases made in a virtual world.  Adding to the confusion are games that require two or three conversions before the in-game currency is pegged to an actual price in dollars – a process that some argue is rigged to make gamers forget what they are spending.

That said let’s not start a hater-aid parade on video games.  Gaming can be a great hobby and teach valuable skills that have real world applications such as problem solving, multi-tasking, teamwork, and hand eye coordination.   But parents need to make sure children play video games responsibly.

For starters lay ground rules on how much time your son plays video games and unlink your debit card from his Xbox.  If he wants to make an in-game purchase let him spend his own money while weighing the pros and cons.  Parents should also familiarize themselves with the settings on the specific gaming console or mobile device a child uses to play games.  Many provide passcodes and other options to limit spending or disable in-game purchases.

Ask Dr. Per Cap is a program funded by First Nations Development Institute with assistance from the FINRA Investor Education Foundation. For more information, visit www.firstnations.org. To send a question to Dr. Per Cap, email askdrpercap@firstnations.org.