Study Says Five Percent of Mobile Gamers Are Willing to Spend More Than $50
The majority of players will never pay for anything inside a free mobile game.
That’s a fact.
But a new study conducted by Flurry, an analytics provider for mobile games on Apple and Android devices, provides a fairly compelling argument as to why a developer should continue to give away his or her games for free.
Ultimately, it’s because consumers are willing to pay much, much more — if given the option.
After evaluating the spending habits of 3.5 million consumers across both iOS and Android, Flurry found that among those who pay for in-app transactions, greater than five percent will spend more than $50, which rivals the amount paid at retail for top console and PC games.
What’s more, consumers are spending $14 per transaction on average, which easily exceeds the price tag of most premium games being sold on smartphones today.
Since $14 sounds high, Flurry’s GM of Games Jeferson Valadares explains the logic behind it in a blog post today. The findings are also a continuation of a report issued earlier this month that generically found that mobile games generate more revenue if given away for free.
Valadares explains that only three percent of consumers are likely to spend money at all, but that at the high end, there are some very big spenders who are bringing up the average and generate a bulk of the revenue. Additionally, the number of consumers who pay very little remains fairly low. In fact, consumers spend only 99 cents less than two percent of the time.
“Why then would so few consumers spend just $1 in freemium games when this price point is so popular among premium games?” Valadares writes. “Because freemium games drive a different decision-making mindset for consumers. They simply are deciding whether or not to spend.”
The study found that 71 percent of all transactions are for amounts under $10; 15 percent are for spends between $10 and $20; and 13 percent are for amounts greater than $20.
The higher-end buyers are considered the “whales” of the industry.
Flurry’s advice to game developers is to focus on the whales: “If you’re a game designer, your main take away is that very few transactions — and consumers who complete those transactions — make up the bulk of your revenue. Therefore, your ‘meta-game’ should be about whale hunting.”