New Study Reveals Less than 1 Percent of Players Generate Half of Mobile F2P Games' Revenue
Forget the 1%, down with the 0.15 percent! According to a recent survey Swrve, an analytics mobile app marketing firm, 0.15% of players in many free-to-play mobile games, generate 50 percent of all in-game purchases. This alarming revelation that illustrates the narrowness of F2P revenue, and in business terms, is known simply as the Pareto principal.
Known as “whales” (a name shared with the renowned big spenders at tables in Las Vegas), this tiny morsel of individuals who are willing to pump large amounts of money into these apps are a huge potential problem for the future of mobile gaming. Meaning, mobile developers will have to inevitably shift their focus from providing high-quality games, toward incentive-based, “gambling” nets, to try to rope in these coveted whales.
Data from Swrve’s first mobile games monetization report also highlights the patterns of these spenders. According to this study: of all the whales who pay, 49% make one purchase a month, with 13% making five or more purchases – mostly within the first 24 hours of playing the actual game. The average time lapse between purchases of those players who decide to make a second transaction, is a shocking 1 hour and 40 minutes. It seems rather compulsive.
The report also states that the average value of an in-game purchases is around $6, with purchases of $1-$5 representing 67 percent of total transactions. Some apps even go as far as charging $50 for an IAP, which the study indicates, accounts for 0.7 percent of all purchases and 9 percent of total revenue.
Swrve CEO, Hugh Reynolds, emphasizes that the timing between getting a player to make that first critical purchase, and then, a second one within that timeframe, is equally important. He also states that players have an abundance of choice, and trying to capture them, and subsequently finding a whale in that group, is a “special thing.” This report, which surveyed millions of gamers, will be available monthly in the future. The reason Swrve has set out in recording these events is to measure activity in order to create marketing campaigns for these apps.
In the end, there will always be free riders, and in free-to-play mobile gaming, they will be powerless majority. While they will have to endure a plethora of distracting advertisements to get their entertainment for free, they themselves can become their own type of whale (referred to as “social whales”). These are players who pay nothing, but somehow find a way to influence others to do so.
Personally, what I would like to see, is the correlation between these “whales” and anxiety disorders like OCD, or even something like ludomania. It has been argued that games containing IAP’s are targeting people who have these issues into spending money. After all, many of these games’ IAP methods mirror the same triggers of brightly flashing slot machines – showing you how close you came on your last bet, while deeply-rooted psychological drives urge every fiber in your being to spend more. Obviously, these big spenders aren’t poverty stricken, seeing as they can afford smart phones, tablets, and ridiculous amount of micro-transactions.
It seems morally wrong, and indiscreetly exploited by developers, but what can be done? I’d really like to know your thoughts on F2P mobile games and IAP’s in the comments below.