Think Design : The Sunk Cost Fallacy

Have you ever watched a crappy movie all the way to the end? Have you ever stayed in a bad relationship? Finished your college degree even though you disliked the major you chose? Stayed at a job that you hated? Held onto a stock that kept going down? Kept playing a terrible game because you figured it just had to get better at some point?

If any (or all) of these is true, don’t worry about it. The reason we do these things is because of the Sunk Cost Fallacy, which says that once we’ve invested in something, we have a tendency to stick with it because we don’t want to ‘waste’ everything we’ve put in.

It’s important to note that the ‘cost’ here can be money, time, emotion, or effort. We value all of these things, so investing one or more of them into something creates that sense of cost.

“I don’t really want to go to this wedding either. But we already RSVP’d, and we marched all this way…”

So why do we fall victim to the Sunk Cost Fallacy? We’ve all heard the sayings ‘it has to get worse before it gets better’ and ‘no pain, no gain.’ When it looks like we’ll be rewarded for putting in more effort, it makes sense to persist through the challenges to achieve success. But we have to look forward, not back, when we decide if something’s worth continuing. Being aware of the Sunk Cost Fallacy can help us avoid the trap of overvaluing what we’ve put in already, and keep us focused on whether the current path forward makes sense.

Another element that comes into play is personal pride. If we abandon something we’ve already invested in, we’re admitting we made a mistake. If we go to a terrible movie, we don’t just lose some time and money, we also have to admit we chose a dud, and that makes it sting a little more.

“We paid for the tickets, and we’re already an hour in. It has to get better, right? Right??”

The pride element is perhaps an even bigger factor in today’s socially connected world. If we’ve updated our status saying that we’re going to a show, we have a bigger audience to see our mistake if we decide to pull the plug and abandon the movie halfway through. So we’re more likely to succumb to the Sunk Cost Fallacy and stick it out. (Realistically though, everyone else is probably too busy posting their own updates to notice that you left the movie anyway, so try not to stress about it!)

Perhaps the most dangerous thing about the Sunk Cost Fallacy is that it’s a downward spiral: the more we’ve invested, the more likely we are to stick with something, even when it’s not working. But by sticking with it, we’re investing more, which makes us more likely to stick with it… you get the idea. This is partly why people get trapped in bad relationships or stay in jobs they hate.

“My job’s the pits, but it took a lot of training to get here, so I can’t just quit now.”

How does the Sunk Cost Fallacy affect game designers?

First, there are plenty of terrible games out there. How did that happen? How could such bad games have passed all those internal reviews? You guessed it – that was probably the Sunk Cost Fallacy at work. If a studio has already plowed tons of money and time into a project, they’re more likely to struggle to make it work than to abandon it. The execs don’t want to believe that they’ve made the wrong decision in approving the game, or wasted studio time and money. Similarly, the team working on it will fight to keep it alive for the same reason – they’ve put a lot of time and effort into the game, and they don’t want to see that time and effort lost. And you know by now that the further along a game gets in the development cycle, the less likely it is to be cancelled. Even if, deep down, everyone knows the game is bad, it gets harder to kill with each passing week.

“There’s no way we’re throwing away the last 13 years of development. This game will be great!”

The same goes for any one part of a game, too. Maybe the game as a whole is good, but the narrative is bad. Or one of the modes in the game just isn’t fun. We’ve all played a game with that one level that’s got a totally different mechanic and is more frustrating than the rest of the game combined (I’m looking at you, turret sequences in every third-person shooter ever). By the time the team realizes problems like these, they’ve already put in a lot of hard work, and don’t want to just throw it all away. So instead, they leave the problem in, and the game suffers because of it.

Our players aren’t immune to the Sunk Cost Fallacy either, of course. When Final Fantasy XIII came out, the big conversation was that the game was really linear and boring until you were about thirty hours in. That means that players slogged through thirty hours of boredom in the hopes that it would get better! That’s the Sunk Cost Fallacy at work right there. If you sell your game using a retail model, where the player pays once and owns the game, the Sunk Cost Fallacy is more likely to work to your advantage – players have already put down their money, so they’re already more invested and therefore more likely to push through a bad experience in the hope that their investment was a good idea.

“I know the beginning is bad, but it really starts getting decent after just 35 hours.”

If your game is free to play, on the other hand, you don’t have that luxury. When players first check out your game, they haven’t invested much of anything, so if the game isn’t fun, most of them will leave instantly. Get them to stick around though, investing time, effort, and maybe money, and you’ll trigger the Sunk Cost Fallacy. This is why so many people kept tending their virtual farms for so long.

“I’ve put in way too much time to stop now. Besides, I think there’s still room for one more duck.”

Many MMO’s and RPG’s eventually make the player ‘grind’ for levels – basically just killing enemies over and over to earn experience points and level up. Players do this so that they can use better weapons and armor, and take on tougher quests and enemies. Ever wonder why this grind tends to happen in the higher levels of these games? By then, players have invested a ton of time in the game and are less likely to quit, even if they need to spend tedious hours leveling up so they can move on to new content.

As designers though, we don’t want to prey on the Sunk Cost Fallacy to keep our players. We don’t even want to trigger it accidentally. If we do, it’s a sign that we’ve designed an experience that just isn’t fun, and that players are continuing to play for the wrong reasons.

On your next project (or your current one!), keep the Sunk Cost Fallacy in mind. Kill a bad feature or level, even if you’ve spent a lot of time on it. Don’t pad your missions, or rely on the player grinding through a slow or frustrating section just to ‘get to the good part.’ Don’t try to make the tech work if it’s just not the right tech to do what you need.

When you catch yourself thinking ‘yeah, but I’ve already paid for it’ or ‘yeah, but I’ve already spent hours on it’, remind yourself that you’re falling victim to the Sunk Cost Fallacy. Stop, and forget about what you’ve invested already. Instead, think only of the future, and what you’ll get if you keep going down this path. Is there a worthwhile payoff coming if you stick it out, or is it time to suck it up, cut your losses, and change direction? Make your decision based on where you want to go, not where you’ve been.

And if you decided that this post sucked halfway through, I’m glad the Sunk Cost Fallacy kept you reading until the end!


Ryan Donaldson teaches Business of Games at VFS Game Design