The rise of mobile gaming has seen a lot of theories about what this means for the industry in general. One or two dollar apps were apparently flying off the digital shelves and the price that mobile gamers were willing to pay was dropping to next to nothing. Soon developers would have to all give away their games for nothing and just charge players for extras thanks to the newly emerging "free-to-play" model, since everyone is just too cheap to pay good money for their entertainment. Well if that all had you worried then I have a glimmer of hope to give you.
A new survey from W3i, a company that specializes in helping developers monetize their users (it's not as sinister as it sounds, I swear) shows that, at least in America, the bulk of in-game purchases are actually pretty highly priced. Developers surveyed made an average of 47% of their total revenue off of in-game purchases ranging from $9.99 ro $19.99, while only 6% came from $0.99 to $1.99 purchases. Perhaps this is meaningless but I like to use this information to take heart in the idea that if you give a gamer something they enjoy they're willing to pay a reasonable wage for it, and mobile gamers aren't as cheap as some had previously assumed.
Check below for the full press release and an interesting graph representing some of the stats gatherred from the survey.
The Era of Microtransactions in Free-to-Play Mobile Games is Over, According to New Report from W3i
The data shows that smaller microtransactions ($0.99-$1.99), long thought to be the backbone of the freemium model, actually contribute significantly less revenue to mobile games than more expensive in-app purchases that range from $9.99 to $19.99.
When surveying the in-app purchase price points and how they contribute to the overall revenue of a sample of games, W3i found that, on average, 47 percent of total revenue comes from purchases costing $9.99 to $19.99. Smaller purchases from $0.99 to $1.99 only contribute an average of six percent to total game revenue.
The freemium model emerged as the foremost business model in mobile gaming with premium and subscription business models declining. The freemium model is built on the back of microtransactions with gamers spending a dollar or two to unlock virtual goods.
W3i is also reporting in-app purchasing trends from around the world:
- The highest-spending region in the world is the United Arab Emirates- with 77 percent of revenue of revenue coming from $19.99 (55 percent) and $9.99 (22 percent) IAPs (as of Oct 2012)
- The UK has the highest number of whale spenders- with eight percent of revenue coming from $49.99 IAPs sizes as of Oct 2012
- $.99 IAPs sell the largest volume in China and Canada where they each make up about three percent of purchases
“Although the U.S. learned about freemium gaming from Asia, it’s apparent that Americans are taking their own approach to it,” says Robert Weber, co-founder of W3i. “Where mobile games in Asia still depend on microstransactions, U.S. gamers play more like whales- spending larger amounts of money in mobile games.”
W3i is a leader in monetization and user acquisition solutions for mobile and web apps. The company’s mobile offer exchange sources and optimizes offers from leading providers, often doubling existing revenue. Offer providers benefit from the open marketplace of quality app enthusiasts with targeting and flexible pricing. W3i’s app experts deeply collaborate with application developers to grow their businesses. For more information, visit www.W3i.com and @W3i.