Abstract
This study examines online game failure (failing in a game mission) and its effects on player behavior (staying in the game) and consumption (purchasing virtual items). Consistent with attribution theory, we theorize the impact of failure on whether players stay in the game based on how failure is attributed: either to the individual or the team. Results of a two-phased Tobit model with over 3,000,000 data points show that selffailure increases, while team-failure decreases, player’s likelihood to stay in the game. Conditional on staying in the game, self-failure has an inverted U-shaped effect on consumption, initially reducing and then increasing spending after many self-failures. However, team failure has a negative effect on consumption. Interestingly, team failure decreases consumption for male players without many friends in the game, while increases for female players with many friends. These findings imply that game designers should design individual and team missions differently across populations.