Study: Only 1.5% of F2P customers buy in-app purchases
A new study suggests that an incredibly small number of free-to-play customers on mobile devices buy any in-app purchases at all, and among that group only 1/10 of them pay enough to account for 50% of revenue.
The free-to-play model tends to rely on a relatively small number of heavy spenders financing the development for others who are more thrifty. A new study suggests the disparity between those two groups is even larger than we may have realized, asserting that just 0.15% of players make up 50% of the revenue for in-game purchases on mobile devices.
Data from mobile network Swrve (via IGN) found that only 1.5% of players made any in-app purchases at all in January 2014. Half of the overall revenue was made from the relatively tiny 10% of users who spent any money, which is how it arrived at the 0.15% figure. That would also mean that 98.5% of mobile players don't bother with in-app purchases at all.
The study also found that of paying customers, 49% only make one purchase in a calendar month. Most of the spending activity is done within the first 24 hours, but if you do purchase something you're more likely (53%) to go on to make a repeat purchase within two weeks. Most purchases (67%) are between $1-5, but those only contribute to 27% of the revenue. The relatively lower number of high-value purchases over $50 (0.7%) contribute 9% of all revenues.
Swrve is a mobile network that provides a platform for app developers, and all of the data collected was from apps running through their network. The data was restricted to free-to-play games, so priced games with in-app purchases weren't part of the study. Swirve says it examined data from tens of millions of people during January.
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Steve Watts posted a new article, Study: Only 1.5% of F2P customers buy in-app purchases.
A new study suggests that an incredibly small number of free-to-play customers on mobile devices buy any in-app purchases at all, and among that group only 1/10 of them pay enough to account for 50% of revenue.-
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Check out Paint It Back on an iOS device if you have one. That is a great IAP that I don't mind paying at all. I can't remember the cost but there are a short section of puzzles that you get for free to get you hooked then they sell packs of puzzles after that that are even bigger for like a dollar or something. i think they give you a buck a pack and if you get them all you save a buck. there's no time limits, nothing artificial to get in my way of playing the company's game.
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though this seems logical, it is almost entirely false. The vast majority of F2P players will never monetize, they just want something to play for free. Of the players that MIGHT monetize, making your IAP have a good value is a very good thing. But that's not always the case.
For example, I spent $3 in the Android version of Triple Town because I wanted unlimited moves. I liked the game so much that I could justify paying to remove the limitation they put in game. From a purist game designer standpoint I HATE HATE HATE this mechanic SO much, which would make you think that I'd never participate in it. However, because I saw enough value in removing the roadblock, I did it.
What's interesting is that 1.5% is considered sub-par for most industry-standard games. In general you want to have your monetization rate (the % of people who have spent any amount of money in your game) to be 2-3% at minimum. Now if your game becomes a huge hit and doesn't have a cost to you that scales along with the size of your player base, you can make it with a lower conversion rate.
TLDR - monetizing F2P is witchcraft. -
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I've only done IAP for like 3 games, and that was more because I enjoyed the game and wanted to throw the dev a few bucks. Like $3 or so. But, the return for most IAP is just not worth it.
Games like Colosotron might deserve me spending the lowest amount just because it's been fun I may want to give them a few bucks, but seeing that $100 option just wrecks it for me. Greedy. Other devs are much, MUCH worse about the greed factor. -
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That 0.15% of F2P customers should probably seek counseling similar to that given to compulsive gamblers.
It reminds me of this quote from John Riccitiello in January 2011: "We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret." That's not a healthy consumer, and it makes this submarket of games tarnish video gaming as a whole.
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