Perhaps it wasn't clear that I meant to lump angels and VCs together as "early investors". "Pre-IPO investors" would require unpacking a TLA.
The key is in your last sentence: "wouldn't in retrospect have preferred to use that money for something else."
Unless I went and blew 50k on the game (which I fortunately never did and likely never will!), that's not even a question. Whatever money I'll spend on these, I -still- have to spend on something else. I only spend a tiny fraction of my disposable income. I (and many "whales") just have a LOT of disposable income. Very few people who go and blow 1500 bucks in a night on these actually empty their bank account (at least from my experience being part of a lot of gacha game communities. I obviously don't talk to all the whales).
I have a kind of "limit" I set myself, with zero expectations. When you blow enough money, statistically the odds of getting what you want are really high. I've gotten really unlucky at times, but usually I'll get what I was whaling for. And sometimes the game shuts down, and it's like, whatever, it happens.
I've personally encountered whales in two situations:
One was someone in an MMORPG trading equipment. Okay, I kind of get the skipping work part, especially if the money doesn't matter.
But then there were the logs I've encountered while doing support for a browser based MMO RTS. Players clicking the same few buttons to get a small fixed amount of resources. Over and over and over again. Only interrupted to recharge the currency. How can that be satisfying? Just the "work" alone seemed demoralizing to me, but then even paying for that?
Have you ever experienced something like this? Is the process of spending enjoyable? Or does the end justify the means, especially for non-random outcomes?
The fun part (and what distinguish the good gacha games from the bad ones) is how much fun you can have with what you get. Some feel like the transactions and the gambling is the end goal. You play to get currency to get random stuff. Boring.
This seems like a strange measure to me. No judgment on how you choose to spend your money - I've certainly spent money on things I later regret, and I've also spent large sums on relatively frivolous things which I don't particularly regret. There's always an opportunity cost though - I could have spent the money on something else, I could have saved more, I could have given more to charity. Over time I try not to repeat the expenditures I regret and focus more on the ones that I don't.
It works like that, except you usually still have something for a long time, even though it's digital.
I'll be forward and be completely honest: I've spent several thousands of dollars on a single of these games. And I've played many of them. Some with just straight micro-transactions (eg: League of Legends skins), some straight up "gacha" or "lootboxes" (eg: Fire Emblem Heroes, FF Brave Exvius, and so on).
When you look at a videogame compared to other form of entertainment, is just how efficient they are in a "fun per dollar" point of view. MMORPGs that cost $10-15/month and people play obsessively several hours a day are way better than going to a bar to drink, money wise. But what if efficiency is tossed out of the window, how much is "fun" worth to someone?
It's likely a factor of their disposable income. But we're now at a point where adult professionals are very much part of the player base. So if a game is free to play, but has a loot box mechanic that can make it "more fun", what happens? Well, for people without money to burn in a fire pit, it might not be worth it at all, so they won't spend a dime. For the senior executive who makes 500k or 1million a year? They could blow through 5 grands in an afternoon without really caring.
So if you have a gaming population where 90% (I'm making numbers up) don't spend a dime, 9% is spending a moderate amount because of predatory practices (kids, addicts, etc) or because they like it, and then 1% spend an INSANE amount of money because they have no real "limit", you may come up WAY ahead than if you charged a flat fee and the same amount to everyone. Because the rich people are just THAT much richer to make up for everyone else.
I know I've read some articles (none that I can find to confirm my memory) where some of the smaller gacha games with a few tens of thousands of players run fully on the pockets of a few hundred people, if that.