Players of online games often purchase superior virtual gears to maximize the chance of winning in games. Owners of the superior gears receive greater utility from winning games at the disappointment of others. “Paying-to-win” generates profit by sacrificing free players, which presents a critical tradeoff for the business model design of online games. Our novelty is allowing the game developer to choose the level of dominance of the superior gears strategically. We develop a game-theoretical model in which an online game sells superior gears to players for profit. The game developer can endogenize the tournament design, which affects the winning probabilities of games between paying and free player groups. Our results suggest that if the game developers can endogenize the tournament design, their decisions may undermine the player welfare. This finding appears new in the literature. The tournament design level increases with the magnitude of seeding, indicating a complementarity between the two strategies. The bulk of this work is done by Haowen Deng who is currently a PhD student at Fudan.