.15% of mobile gamers make up 50% of in-app revenue - Survey

Analytics firm Swrve finds double-sided impact of mobile market's reliance on "whales"

It's been well known for a while that a relatively small number of players account for a disproportionately high amount of mobile game revenues, but analytics firm Swrve is underscoring just how small that group is, and just how much their contribution matters to the market's bottom line. As reported by VentureBeat, a Swrve survey of user data from tens of millions of gamers has found that about half of all in-app mobile game revenue comes from just .15 percent of the player base.

The other half of revenues isn't exactly coming from the masses, either. In January, Swrve found only 1.5 percent of active purchased anything. Of those, 49 percent made a single purchase, while 13 percent made five or more. The average in-app purchase came to $5.94, with 67 percent of all spending dedicated to items in the $1-$5 range. The biggest ticket items, those costing $50 or more, made up .7 percent of purchases and 9 percent of total revenue.

Swrve CEO Hugh Reynolds said having a relative handful of players contributing the lion's share of the revenue had mixed implications. While it's "a special thing" for companies to monetize players that effectively, Reynolds cautioned that the situation in mobile gaming has created competition for a massive audience that has grown used to playing games without ever paying a dime.

"People are very mobile, and they have a lot of options," Reynolds said. "Trying to capture them is becoming more and more difficult."

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Latest comments (15)

Bruce Everiss Marketing Consultant 8 years ago
In fresh news ursidae defecate in an arboreal setting.
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James Berg Games User Researcher 8 years ago
Not really very helpful without knowing the market, and the games being used to gather the data. "Mobile gamers" isn't a single demographic you can design for.
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Hugo Trepanier Senior Game Designer, Ludia8 years ago
A lot of this is probably due to the fact that most F2P games typically don't offer much value in what they sell to the player. The real problem, as mentioned in the article, is that now our players don't really expect to pay anything anymore, so how can we reverse that habit by enticing more non-spenders to make a first purchase? We need to give them something truly meaningful, real content that will make a purchase an obvious decision, something they'll do happily and willingly, not out of boredom or because they've been forced to do so to keep playing.

I don't think the actual economic model is sustainable in the long run, not without some changes. We'll run out of whales eventually, and who will put food on the table for developers then?
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Craig Page El Presidente, Awesome Enterprises8 years ago
VentureBeat title: "Only 0.15 percent of mobile gamers account for 50 percent of all in-game revenue (exclusive)"

GamesIndustry title: ".15% of mobile gamers make up 50% of revenue - Survey"

So, the original story is clearly about revenues from in-app purchases from free to play games. This story at GIBiz makes it seem like just 0.15% of mobile gamers account for 50% of ALL mobile revenue, not just F2P in app purchases.
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Anthony Gowland Director, Ant Workshop8 years ago
We'll run out of whales eventually
Why is that a certainty?
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Hugo Trepanier Senior Game Designer, Ludia8 years ago
@Anthony, not a certainty, I'll admit I'm mostly just speaking from gut feeling here. I just think it's wrong to base an entire economy on less than 1% of your players because that basically requires every game to be a massive success every time in order to make any money at all.

For instance, under that model it would be virtually impossible to make a living with a game that has just 10 000 players, even if the majority of them are dedicated players (but aren't spending a dime). Not every title has the weight of King or Zynga's player base. I think you'll find that a lot of smaller titles will barely make enough profit for their creators to sustain their cost of operation, while the lucky few will make insane amounts of profit.

Then again that sounds just like the real world's wealth distribution, so what do I know...
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Brendan Sinclair Managing Editor, GamesIndustry.biz8 years ago
Clarification made, Craig. Thanks for the heads up.
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Paul Johnson Managing Director / Lead code monkey, Rubicon Development8 years ago
I'm amazed it's anywhere near 0.15% given the amount of barnacles I've encountered since making a F2P game...

However, F2P is still probably 90% of the total revenue if my own comparative experiences of both sides of the fence are anything to go by.

Edited 1 times. Last edit by Paul Johnson on 26th February 2014 8:41pm

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Curt Sampson Sofware Developer 8 years ago
Hugo, I don't see why 0.15% of ten thousand players would be somehow considerably less than one hundredth as helpful as 0.15% of a million players. Getting 50% of your revenue from more than 15 players doesn't somehow magically make more revenue come in.

I have to admit, my first instinct on seeing the 0.15%/50% figure was, "this is really bad." But on further reflection, I can't think of any really solid reasons why it's bad. Sure, it means that this genre of F2P games is essentially a patronage system, but the patronage system has produced a [em]lot[/em] of good art , and appears to have been one of the chief ways of funding art until the 19th or 20th century.

It would be interesting to look at the figure for "good" F2P games and see how different it is. My feeling that it would be quite different is based on no evidence at all.
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Keldon Alleyne Strategic Keyboard Basher, Avasopht Development8 years ago
They're probably the same people who click all those ads that make the internets free.

Edited 1 times. Last edit by Keldon Alleyne on 27th February 2014 7:04am

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Curt Sampson Sofware Developer 8 years ago
I've spent some time looking in to this further. Particularly enlightening was Nicholas Lovell's F2P design rule number 9: make it possible to spend $100 (per month). This is part of his 0-1-100 idea, where 0 is "play the full game (or all the important parts of it) forever for free," 1 is "make it as easy as possible for someone to spend their first dollar," and 100 is "make it possible to spend $100/month or more for players that want to."

The first question this raises, for me, anyway, is, "is $100/month an exploitative amount to be getting from a user?" (I develop software to help people, not exploit them.) While to me spending $100/month on something like Candy Crush Saga appears to be the definition of insanity, comparing it with my own behaviour I have to say that I can't see anything wrong with it beyond the fact that I certainly wouldn't do it. $1200 a year is certainly not an unreasonable amount for many people in the first world to spend on a hobby, and is in fact only about half my yearly gaming budget. (And, indeed, for the last year and a bit I've spent some $80-100/month or so just on World of Tanks. That seems like a lot when viewed in some lights, but given how much time I've spent on it it's actually been a reasonably good gaming value--though it's half my yearly budget, it's been far more than half of my game-playing time over its period.)

So given that there might be a few players reasonably spending $100/month, how does this fit in to the 0.15% calculation? 0.15% is one player out of 667 more or less, and if the overall rate of paying players is 4% (that being the figure I saw recently from King), that would mean we're getting the other $100 from 26 more of the 667 players, who are each then paying an average of a bit under $4/month.

Does this seem unreasonable? I'm not sure.
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Nicholas Lovell Founder, Gamesbrief8 years ago
Curt, thank you for your kind comments. Your description of your World of Tanks playing is exactly what I mean.
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Christopher Bowen Editor in Chief, Gaming Bus8 years ago
@James - I disagree with that because "mobile gamers" is such a large group of people at this point that you've essentially got a regression to the mean in terms of demographics; put simply, everyone averages out.

I think the numbers, in the end, are only partially relevant. We know that a very heavy section of mobile, F2P data comes from a very small subset of gamers, and the market adjusts its tactics to get that percentage of gamers. On the other hand, most people don't pay a dime. There's no middle class anymore, and it's not just F2P that's affected; even in the console/PC space, it's either AAA blockbusters, or small indie games that have to have a retro look to be noticed.
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James Berg Games User Researcher 8 years ago
Sorry Chris, but without knowing more information, I still disagree. I've seen a lot of comparison numbers for F2P, and region in particular has a huge impact on behaviour. Comparing NA to Europe to China to Brazil, it's not the same stuff. Now, if this report covers the world fairly equally, then I'd absolutely agree - stuff does average out at sample sizes like this, but where those samples come from is critical information.
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Curt Sampson Sofware Developer 8 years ago
Christopher Bowen writes, "There's no middle class anymore."

I'm not sure I agree with that. From the figures in the article, ninety percent of the purchasers (the part of the 1.5% who paid who are not in the 0.15% who provided 50% of the revenue) are definitively not "whales," and thus in the "middle class" between those who don't buy the product and those who spend a huge amount. (That figure might even be higher, since we don't know how many of the 0.15% really are whales, spending significantly more than what the game might sell for if it were an old-style pay-once-in-advance retail product.)

You might even say that we're in the same situation as we've always been in, except that the non-purchasers now get to play the game to some degree or other. After only, a game that sells four million copies on consoles and PCs (which is generally, I think, considered fairly successful) is selling that in to an audience of two hundred million or more, meaning that only a couple of percent (if that) of the potential purchasers paid. I'm not totally sure if I buy this parallel, but it's certainly something to think about.
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