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50% of In-Game Revenue from Free-to-Play Titles Comes from Just 0.15% of Mobile Gamers

February 27, 2014 - Written By Tom Dawson

Mobile gaming has never been more popular than it is today. Gone are the days of the Game Boy being the mainstream choice for gaming on the move. While Nintendo and Sony both still offer their respective handheld solutions (one of which I own, and still use occasionally) I think we can all agree that gaming on our smartphones and tablets has become the norm when on the go. After all, there wouldn’t be options like the Moga and other controllers if there wasn’t an appetite for them. A lot of games these days are “free-to-play”, which is a self-explanatory term, allowing us to download and play the game for nothing but asking for money for extra weapons, ammo, features or to unlock further levels. This sort of model seems to be working well, but with in-app purchases leaving a bad taste in most players’ mouths, how many people actually pay for this sort of stuff? As VentureBeat has been finding out, not many.

In a recent study by Swrve, an app marketing firm, roughly 0.15% of all mobile gamers make up for 50% of all in-game revenue. That’s a staggering statistic and just goes to show that there’s big money to be made, even if there’s hardly any paying. However, these figures hold some scary reading for game developers. After all, when you’re looking at such a small pool of gamers willing to spend money, the golden promise of free-to-play starts to look a little rusty. Speaking to Swrve, VentureBeat has learned that not a lot of these buyers are repeat buyers. 49 percent of gamers make one purchase a month, with 13 percent of players making five or more a month. The majority of spending takes place in the first 24 hours playing a game and from there 53 percent make a repeat purchase, with 47 percent bowing out in the same period. The 0.15% of players that make up the massive figure of 50% of revenue are often referred to as “whales”. The big spenders. These are the players that game developers are most looking to entice to make a purchase, as they’re the most likely to pay again and again.

Whether its coins, items, ammo or whatever it is, free-to-play has flooded the gaming scene. The vast majority of games utilize the tactic, from Temple Run 2 to Dead Trigger 2, free-to-play is everywhere. For some, it’s an annoyance, but if just 0.15% of gamers make up for this amount of revenue, then it looks like developers and publishers will continue to use free-to-play in order to increase that figure. I know I’ve been drawn into in-app purchases, spending money in Subway Surfers in a desperate bid to beat my stepsister’s high-score (which I did, and now stands at 1,114,969 for those curious) but what about you guys? Let us know in the comments if you’ve been taken in and spent more than you should have done on a game.