Study Finds .15 Percent Of Gamers Comprise 50 Percent Of All In-Game Purchases

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News Posted: Fri, Feb 28 2014 10:02 AM
As any mobile user can attest, there are no shortages of free games to download from the various app market places, though many of them try to attach their tentacles to your wallet or purse through in-game purchases (some are worse about it than others). These can range from weapon and armor upgrades, to gems that can be exchanged for more play time, or anything else. If a game is a hit, these in-game purchases become cash cows for the developer, but you might be surprised where the bulk of those dollars are coming from.

According to Swrve, makers of an in-app marketing platform for mobile, just 0.15 percent of gamers account for more than half the monthly revenue generated from in-game purchases. This was one of several interesting findings the company presented in its first-ever Mobile Games Monetization Report, which it's planning to release on a monthly basis.

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Believe it or not, the overwhelming majority of gamers never make any purchases. Based on a survey of tens of millions of gamers, only 1.5 percent of players who were active last month made an in-app purchase. By extension, over half of the revenue comes from the top 10 percent of those who do make purchases in any given month.

"What’s interesting is that while many consider that the freemium model to be successful, there is still surprisingly little data relating to exactly how consumers interact with freemium games," said Hugh Reynolds, CEO of Swrve. "With access of ten’s of millions of players, we have aggregated data from across our system to finally lift the lid on what goes on after install - and where the money is made."

In terms of spending, the average value of an in-app purchase is $5.94. Purchases between $1 and $5 make up two-thirds of spending but only contribute to 27 percent of total revenues, while purchases of over $50 make up 0.7 percent of spending, yet contribute 9 percent of all revenues.
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digitaldd replied on Fri, Feb 28 2014 11:47 AM

I wonder how many people use in game purchases to make a game that is fun less annoying. I ran into this problem with EA's Tetris Blitz the game is fun for like maybe 10-15 games then you get to a point where you need a lot of in game currency to afford power-ups and finishing moves. I guess the same goes for Candy Crush and a bunch of other games.

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sevags replied on Fri, Feb 28 2014 7:54 PM

digitaldd; I imagine quite a few people! My mom is completely addicted to games like candy crush, papa pear, and bejeweled type games but has never made a single app or in-app purchase in 5 years of having a smartphone. Me on the other hand.... I don't make in-app purchases however I have been steadily playing Clash of Clans every day for 10 months now and in the first 5 months I played strictly for free however the 2nd 5 months I have been playing I made almost $200 worth of in-app purchases (I kept buying gems so I can attack repeatedly instead of every half hour for troops to be trained). it wasn't a smart move on my part at all. Now that my enjoyment of the game is finally decreasing I see that money as wasted rather than enjoyed.

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digitaldd replied on Mon, Mar 3 2014 10:23 AM

sevags:

digitaldd; I imagine quite a few people! My mom is completely addicted to games like candy crush, papa pear, and bejeweled type games but has never made a single app or in-app purchase in 5 years of having a smartphone. Me on the other hand.... I don't make in-app purchases however I have been steadily playing Clash of Clans every day for 10 months now and in the first 5 months I played strictly for free however the 2nd 5 months I have been playing I made almost $200 worth of in-app purchases (I kept buying gems so I can attack repeatedly instead of every half hour for troops to be trained). it wasn't a smart move on my part at all. Now that my enjoyment of the game is finally decreasing I see that money as wasted rather than enjoyed.

I know what you mean i was tempted to do just that to shut up Tetris Blitz and prior to that had a similar experience with Arcane Legends. what i did instead was stop playing them. Now I am getting annoying with the excellent Rayman games on Android because I have to keep replaying old levels to get better scores so i can progress it isn't too bad since I actually bought both Rayman Jungle Run & Fiesta Run games. 

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