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Mobile, tablet players spend just 92 cents a month on average

Mobile, tablet players spend just 92 cents a month on average

Thu 18 Apr 2013 2:41pm GMT / 10:41am EDT / 7:41am PDT
MobileBusinessFinancial

Research firm Interpret says that compares to $10.40 spent each month by home console gamers

Market research firm Interpret has released its semi-annual GameByte study, outlining the huge challenges that mobile developers face when it comes to monetization despite a quickly growing audience. The report indicates that the average gamer on smartphones and tablets spends $0.92 per month on full game apps, and only $0.79 per month on mobile in-game items. Success on mobile can be elusive, and this new data only reinforces what EEDAR's Jesse Divnich told us: devs must be prepared to support a variety of platforms, including next-gen consoles.

"In the US, 48 million people are actively engaged in smartphone and tablet gaming, more than double the 23 million playing free-to-play MMOs on PC," said Jason Coston, senior analyst at Interpret. "But the average spend is so much weaker for mobile games that the two business models generate comparable revenues."

Interpret pointed out that free-to-play MMO gamers spend about $3.25 each month, while subscription MMO players (to the extent that subscription MMOs are still around) spend $4.25 a month. None of these spends can match up with home consoles, however, as $10.40 a month is spent on average by players of traditional consoles.

The consoles' user base may be significantly smaller, but there's a clear advantage for developers since the money spent by players is almost always going to be higher. Conversely, only 47 percent of US mobile gamers paid for a full game app over a six-month period, Interpret found, and only 21 percent paid for in-game items. During that same period, 75 percent of retail console gamers paid for a physical console or PC game.

"The mobile game market may be a pretty big cookie jar," added Coston, "but the neck is rather narrow, the cookies are small, and there are a lot of hands trying to reach into the jar."

17 Comments

Popular Comment
And there we have it.

Mobile isn't the answer, after all. Who'd have thought?

Posted:A year ago

#1

Adam Campbell
Associate Producer

1,148 928 0.8
Mobile isn't the answer, after all. Who'd have thought?
Doesn't this depend on what we're trying to answer?

Posted:A year ago

#2
Popular Comment
this is what happens when everyone tries to get cute with MBA business models and thus sets the new expected price model at zero. The industry has boxed itself in. I mean when someone can sit at a coffee shop and not even blink at paying 7 bucks for a coffee, but at the same exact time, will balk and be taken aback by a mobile game with a #gasp% $3.99 price tag.........well

Houston , we have a problem

Edited 1 times. Last edit by Todd Weidner on 18th April 2013 5:50pm

Posted:A year ago

#3
So this report fails to mention some really key numbers to make consoles look way more relevant, so we can't draw any conclusions at all. Most importantly, we aren't told how many users were compared between the two. It there's just 12x as many users on mobile in the comparison, then the two are equal. Any more than that and mobile is winning.

For Interpret to come to a conclusion like this without providing those data points suggests juicing the data interpretation to make it say what they want. "Interpret" indeed.

Edited 1 times. Last edit by Chris Watkins on 18th April 2013 6:21pm

Posted:A year ago

#4

Jim Webb
Executive Editor/Community Director

2,243 2,210 1.0
Popular Comment
Mobile (Digital):
Large user base
Low revenue per user
Low cost of production

Console (Retail):
Small user base
High revenue per user
High cost of production


Both are relevant and viable depending on project and product format with the right product and the right marketing.

This is dead, that's irrelevant....I try to flat out ignore anyone that utters such non-sense.

Posted:A year ago

#5

Art C. Jones
Writer / Blogger

58 78 1.3
They listed 48 million tablet/phone gamers in the US, for it to be 12x console we'd be looking at 4 million active console users in the US. A quick gut-check makes that number look clearly low. There were nearly 100 million hardware units sold this generation between PS3, X360 & Wii in the US alone.

I'm not sure what is their definition of "active audience," but 4 million for consoles seems low. Especially if handheld consoles are added in (Nintendo mentioned yesterday that they sold 400K+ Luigi's Mansion in it's first month, so you reason there has to be at least 400K active players of the 3DS, and probably a good deal more than just the 400K who bought one particular game ;). If you figure more people play the X360 or PS3 than 3DS, then you are looking at a pretty big active audience estimate I'd wager.)

Edited 4 times. Last edit by Art C. Jones on 18th April 2013 6:49pm

Posted:A year ago

#6

Johnny Hsu
Employee

11 31 2.8
I disagree that "MBA Types" did this. I think Apple had more to do with it than anything.

When smartphones first took off in the USA they were primarily Palm OS devices that happened to have cell phone functionality. That is, they didn't have an "app store" per se and you actually had to install apps by pushing them to the phone using Palm's synch-system.

And back then Games on the Palm OS were generally competing against apps. Here's Handmark's Scrabble title from 2007.
http://store.handmark.com/products/detail.php?id=51

Apple really pushed prices in the Appstore down soon after this since they tended to promote the "good and cheap" apps in favor of the very robust but expensive apps.

MBA types don't do a race to the bottom from pricing; have you see what your Cable bill looks like? The race to the bottom for pricing happens from sales/marketing folks who want to hit some growth numbers on the # of users and downloads.

Posted:A year ago

#7
MBAs most certainly do when they think they have discovered a new cute way to maximize revenue, and in a few cases it can and does, problem is they dont think nor care about long term industrial effects, such as what happens if f2p doesnt catch on, your pricing revenue models dont quite work out as planned, and all you effectively do is create a public used to and now expecting a ridiculous price point ($0).

This fiasco has suits written all over it. I really doubt marketing has the power to create monetization models for a game, but if so , so be it they are MBA suits as well, and even if you are right and Apple set this in motion, who do you think runs Apple? MBA suits.... I mean you really cant think a game designer/developer came up with this?

Game designer want to just create the best game they can, at no point in a game designer dreams does he/she fantasize about monetization models.

Edited 5 times. Last edit by Todd Weidner on 19th April 2013 1:45am

Posted:A year ago

#8

David Radd
Senior Editor

359 78 0.2
The lesson is it's hard everywhere. This isn't the time to crow about AAA gaming when prominent titles are missing sales estimates and executives are getting sacked.

Posted:A year ago

#9
The mobile market zero bargain basement pricing only have themselves to blame. When teh cost of something is nothing. people come to expect nothing as the norm and balk at 99cents!

Posted:A year ago

#10
I've always thought the mobile market was similar to Facebook however a couple of years behind but I agree it was primarily Apple's fault that the race to zero happened. They could have stopped it or at least not actively encouraged it but Apple don't care about selling software so it's hardly surprising.

Posted:A year ago

#11

Bruce Everiss
Marketing Consultant

1,692 594 0.4
We are headed to over 2 billion smartphone users this year. So at this level that equates to $24 billion of revenue per year.
The next target is replacing all dumb phones with smart phones. This will give us annual revenue of $84 billion at this level of spending.

But as we get cleverer with our business models and provide more compelling offerings the average per user spend will inevitably go up. So that $84 billion is just something to build from.

For comparison global boxed game sales were worth about $30 billion at retail in 2011.

Posted:A year ago

#12

Jim Webb
Executive Editor/Community Director

2,243 2,210 1.0
Bruce, that revenue potential doesn't increase linearly with the number of dumb phones still in the wild. Your largest revenue potential comes from those that jump to smart phones first. Those still with dumb phones are either uninterested in mobile gaming, have no need for it, no budget for it, etc... Those people jumping to smart phones doesn't increase your potential revenue very much.

Posted:A year ago

#13

Yiannis Koumoutzelis
Founder & Creative Director

360 203 0.6
it's interesting how people don't learn.
Google recently hit one BILLION android registrations. On top of that, here are about 500 million iPhone users, and almost as many tablet users as all the consoles sold together last generation and tablets have less time in the market. The cost of making a mobile game is ridiculously low, and traditional game studios are dropping like flies... from the sound of it, it seems a lot of people are still in denial so the trend isn't going to show signs of a slow down.

the industry has changed for ever, whoever hasn't realized that, is in trouble.

Posted:A year ago

#14

Rogier Voet
Editor / Content Manager

69 31 0.4
If something is proven by this figures is that MMO is the way of the dodo - it takes the most money to produce and has a very poor return on investment. The other figures are harder to read. Making games for mobile is not that expensive, getting people to buy it (or to find it first) is a lot harder. The installed base of Apple and Android is pretty high so you can still make decent money.

Console games are much more expensive to develop so they need that extra revenue. The Xbox 360 sold 70 million, the PS3 about the same. Let's say only 50 procent of those consoles sold are active. That would mean a 70 million people market.

Edited 1 times. Last edit by Rogier Voet on 23rd April 2013 11:15am

Posted:A year ago

#15

Eric Pallavicini
Game Master

277 177 0.6
If something is proven by this figures is that MMO is the way of the dodo - it takes the most money to produce and has a very poor return on investment.
@Rogier
I am not quite sure about this, as a general statement.

As an industry, our MMO making knowledge is improving and therefore it will reduce the costs overtime (not to mention we can also deliberately choose to make lower quality and cheaper to produce&maintain MMO's). On the other side, the always online mobile devices allow a MMO experience, even more massive than the traditional ones (to give an example http://www.ingress.com/ is a MMO, not a traditional one, but still is massively multiplayer online) and I doubt it was that costly to develop (although so far it seems not to be profitable either, or I am missing something subtle). In addition to that, the Microtransaction models and various sub-services (that can be implemented during the product life-cycle) will also provide more opportunities to increase the revenue.

The dodo is not going extinct, it is evolving.

Edited 2 times. Last edit by Eric Pallavicini on 23rd April 2013 12:13pm

Posted:A year ago

#16

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