So as I said, I've been making games for a while and did a stint making casual Facebook Flash games. At the company I was at, a medium sized startup, there was 1 person dedicated to analytics. He would review the numbers every day, we would do A/B tests (so we would push an experimental update to 50% of users to see what the response was), looking at the revenue and the play time, everything. I did not work with the analytics myself, other than integrating the code (such as when a user presses any button, how many power ups they use, time played, etc.). But we would have weekly meetings with the analyst and he would give recommendations as to what we should change in the game to get more engagement, more shares, more revenue, etc.
On one game (this one I didn't work on) it was sort of a 2D Nintendogs type of game. So you could get pets and a house and stuff, and you would have to feed your pet but the food cost real money. In was a decent launch, but the game never really took off, as I said it is very hard to break into the market even with a good game. Anyhow, in the first week, there was one "whale" that spent about $1,200 USD on virtual dog bones. Note, this was a free mobile game. And someone spent what could be the cost of rent in a lot of the country on dog bones. It didn't make any sense, but of course we had to try (unsuccessfully) to figure out what motivated a person to spend that kind of dough on some cheesy dog game. I still don't understand, you could buy a real dog for that money.
Aside from all that, the reason companies do it is because it works. Especially the larger mobile studios are making millions (or more) off of games that are not hard to create (compared to AAA console or PC titles) but end up bringing in more money. And since most of them are Free to Play, you get a huge amount of downloads in a short period of time, ensuring your title stays at the top of the list for a while. I mean, it's a good hustle. I don't like those games, but lots of casual players genuinely do find them fun.
But, there is also an argument that casinos are fun (they are, I've been to Vegas), but they are clearly exploiting people and for the most part tricking them into thinking they can win when statistically they cannot. But this is the same with any product. Lots of cosmetic products claim to make you look younger, well no one can become younger. It's a lie. The pharmacy has a whole isle for diet pills that don't work. People still smoke cigarettes, even though everyone knows they're going to kill you. So yes, it sucks, but it's not any different than anything else.
