Study: Only 1.5% of F2P customers buy in-app purchases

A new study suggests that an incredibly small number of free-to-play customers on mobile devices buy any in-app purchases at all, and among that group only 1/10 of them pay enough to account for 50% of revenue.

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The free-to-play model tends to rely on a relatively small number of heavy spenders financing the development for others who are more thrifty. A new study suggests the disparity between those two groups is even larger than we may have realized, asserting that just 0.15% of players make up 50% of the revenue for in-game purchases on mobile devices.

Data from mobile network Swrve (via IGN) found that only 1.5% of players made any in-app purchases at all in January 2014. Half of the overall revenue was made from the relatively tiny 10% of users who spent any money, which is how it arrived at the 0.15% figure. That would also mean that 98.5% of mobile players don't bother with in-app purchases at all.

The study also found that of paying customers, 49% only make one purchase in a calendar month. Most of the spending activity is done within the first 24 hours, but if you do purchase something you're more likely (53%) to go on to make a repeat purchase within two weeks. Most purchases (67%) are between $1-5, but those only contribute to 27% of the revenue. The relatively lower number of high-value purchases over $50 (0.7%) contribute 9% of all revenues.

Swrve is a mobile network that provides a platform for app developers, and all of the data collected was from apps running through their network. The data was restricted to free-to-play games, so priced games with in-app purchases weren't part of the study. Swirve says it examined data from tens of millions of people during January.

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  • reply
    February 28, 2014 8:00 AM

    Steve Watts posted a new article, Study: Only 1.5% of F2P customers buy in-app purchases.

    A new study suggests that an incredibly small number of free-to-play customers on mobile devices buy any in-app purchases at all, and among that group only 1/10 of them pay enough to account for 50% of revenue.

    • reply
      February 28, 2014 8:07 AM

      mostly because the in-app purchase model does not give the customer any value at all. It's benefit is ENTIRELY weighted toward the publisher.

      People know they're being shafted, and won't buy, accept for a very few dedicated and/or addicted players.

      • reply
        February 28, 2014 8:24 AM

        Check out Paint It Back on an iOS device if you have one. That is a great IAP that I don't mind paying at all. I can't remember the cost but there are a short section of puzzles that you get for free to get you hooked then they sell packs of puzzles after that that are even bigger for like a dollar or something. i think they give you a buck a pack and if you get them all you save a buck. there's no time limits, nothing artificial to get in my way of playing the company's game.

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          February 28, 2014 8:12 PM

          That's more like the shareware model though rather than what's become the "monetize everything and penalize them if they don't pay" model that's become all the rage (perfect example: dungeon keeper)

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            February 28, 2014 8:49 PM

            Yeah I was just sharing my opinion of optimal IAPs. Haven't tried dungeon keeper but I'm done with Ea model of f2p after they ruined plants vs zombies.

      • reply
        February 28, 2014 8:31 AM

        though this seems logical, it is almost entirely false. The vast majority of F2P players will never monetize, they just want something to play for free. Of the players that MIGHT monetize, making your IAP have a good value is a very good thing. But that's not always the case.

        For example, I spent $3 in the Android version of Triple Town because I wanted unlimited moves. I liked the game so much that I could justify paying to remove the limitation they put in game. From a purist game designer standpoint I HATE HATE HATE this mechanic SO much, which would make you think that I'd never participate in it. However, because I saw enough value in removing the roadblock, I did it.

        What's interesting is that 1.5% is considered sub-par for most industry-standard games. In general you want to have your monetization rate (the % of people who have spent any amount of money in your game) to be 2-3% at minimum. Now if your game becomes a huge hit and doesn't have a cost to you that scales along with the size of your player base, you can make it with a lower conversion rate.

        TLDR - monetizing F2P is witchcraft.

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          February 28, 2014 9:19 AM

          so rare for a cheap IAP removing a time based hurdle like that permanently though. usually they want you to buy the 99 dollar currency pack that will help you lessen that time based bullshit for your next few games.

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            February 28, 2014 8:32 PM

            Exactly this. I didn't even know triple town had that option, once I got to the buy more turns shit I uninstalled. If they had said that was the demo the full game is $3,i would have bought it. Their model lost them my money.

    • reply
      February 28, 2014 8:10 AM

      However it works it still works. F2P is making big money in a lot of places.
      League of Legends is the most expensive game I've ever played and it's free.

      • reply
        February 28, 2014 8:34 PM

        How is it expensive? I've played it for 2 years and I spent $30 on it when I first started. I almost consider buying skins just as payback to the devs for continued development, since nothing they offer requires money

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      February 28, 2014 8:15 AM

      I've only done IAP for like 3 games, and that was more because I enjoyed the game and wanted to throw the dev a few bucks. Like $3 or so. But, the return for most IAP is just not worth it.

      Games like Colosotron might deserve me spending the lowest amount just because it's been fun I may want to give them a few bucks, but seeing that $100 option just wrecks it for me. Greedy. Other devs are much, MUCH worse about the greed factor.

    • reply
      February 28, 2014 8:24 AM

      this is not new news. The 'whale' model for F2P has been well-established for years.

    • reply
      February 28, 2014 8:54 AM

      I'd like to see how the stats look on a per-game basis instead of "across the Swrve network." I bet there's a lot of shitty freemium apps not worth a dime pulling the percentages down.

      Not to suggest that all successful ones are top quality, but YOU KNOW WHAT I MEAN...

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      February 28, 2014 9:32 AM

      Path of Exile on the PC was one of the best free to play models in my opinion.

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        February 28, 2014 11:22 AM

        Same with StarTrek Online. I played till max level, and never bought a thing.

        I had friends that wanted specific things, that dropped money on them, but I was content to wait.

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        February 28, 2014 8:13 PM

        The world of tanks model seems pretty good

    • reply
      February 28, 2014 9:48 AM

      1.5% of several million @ a dollar or two is still a crap ton of money

    • reply
      February 28, 2014 10:18 AM

      This study is on mobile F2Ps.

      Not PC F2Ps, which have much higher % conversion - 10 to 25%.

    • reply
      February 28, 2014 10:20 AM

      [deleted]

      • reply
        February 28, 2014 12:44 PM

        It's not bad for WoT. I have spent money on the premium which is essentially like $12 a month if you do it by the month which isn't unreasonable for a game.

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      February 28, 2014 11:28 AM

      Wow, granted I've only paid for heros in kingdom rush but I like the heros and wanted to support the developer

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      February 28, 2014 12:40 PM

      WHALES

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      February 28, 2014 3:47 PM

      I've bought in PS2 and Marvel Heroes. Have not regretted either.

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      February 28, 2014 5:33 PM

      That 0.15% of F2P customers should probably seek counseling similar to that given to compulsive gamblers.

      It reminds me of this quote from John Riccitiello in January 2011: "We have people who are giving us $5,000 in a month to play FIFA Ultimate Team. And it's free. Dirty little secret." That's not a healthy consumer, and it makes this submarket of games tarnish video gaming as a whole.

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