Half of all mobile games money comes from 0.19% of users
By Matt Kamen for Wired.com
Mobile games development is a minefield. Aside from discoverability issues in both the App Store and Google Play (a problem for years), there’s the big matter of how to monetise your app.
In an age when the expectation of free app downloads all but rules out selling your game, free-to-play games with microtransactions are increasingly seen as the answer.
There’s a problem though — a new report concludes that 48 percent of all mobile games spending comes from a miniscule 0.19 percent of users.
The figures come from mobile marketing firm Swrve, as reported by VentureBeat. Swrve also found that those who do spend money on mobile games only do so rarely — for 64 percent of players, only once per month, with 6.5 percent making five or more in-game purchases.
That means the entire market is kept afloat by ‘whales’ — hardcore, arguably addicted players who funnel considerable sums of their money into games. Even scarier, the fact that almost half the entire industry is supported by these overly-dedicated few isn’t new. The figures have barely changed from two years ago, when it was 0.15 percent accounting for a full 50 percent of revenue.
Swrve’s report notes that “although this represents an improvement over previous reports showing up to 60 percent of revenue attributable to the top 10 percent of spenders, it confirms again the need to focus mobile game marketing strategies on VIP players.”
There is some good news though — the average spend per player is up to $24.33, from $22 in 2014, and the typical paying player makes 1.8 purchases, averaging $13.82 per purchase, which is a new high.
Reinforcing how much money relies on a small number of buyers though, Swrve found that only 2.5 percent of all purchases are now over $50 in value, “and these purchases contribute over 17 percent of all mobile game revenue.”
To reach its findings, Swrve monitered over 40 free-to-play through February 2016, and observed the spending behaviour of more than 20 million players. The full, in-depth report can be found here.
The figures may be a sobering reminder for developers considering a free-to-play future for their games.
The article first appeared in Wired.com