.15% of Mobile Gamers Make Up 50% of Revenue

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**Ahtman**

Source

San Francisco, Calif.– Feb. 25, 2014 - Swrve, the leader in relationship marketing for mobile apps, today announced the results of its first-ever Mobile Games Monetization Report. The report, which will be released on a monthly basis, reveals exactly where and how freemium games earn revenue from players.

Findings from this report indicate that an extremely small portion of players, just 0.15%, account for 50% of monthly revenue from in-game purchases. This means that the vast majority of players deliver no revenue and reiterates the importance of acquiring and retaining users that fall into the “high spender” category.

Key Report Findings:

The vast majority of players do not make any purchases, in fact only 1.5% of players active in the month surveyed made an in-app purchase in that month.

50% of revenue is derived from the top 10% of those players who do make purchases. Expressed as a percentage of total players, this group represents a 0.15% of the total players in any given month.

49% of all payers make only a single purchase per calendar month, while only 13% of paying players make five or more purchases. A significant amount of spend activity takes place within the first 24 hours the game is played

The average time to first purchase is just under 24 hours. And of those players who go on to make a second purchase, the average time lapse between first and second purchase is a mere 1 hour 40 minutes

53% of players who make a purchase go on to make a repeat purchase within 14 days, while 47% do not.

13.7% of new players accrue more than four purchases in their first 14 days.

Of revenue accrued within the first 14 days of a player’s life, over 60% is accrued on the first day of life.

The average value of an in-app purchase is $5.94. While purchases between $1 and $5 represent a majority (67%), they contribute only 27% of total revenues. Purchases of over $50 contribute 9% of all revenues

SKUs over $50 account for 0.7% of all purchases and contribute 9% of total revenue.

“What’s interesting is that while many consider that the freemium model to be successful, there is still surprisingly little data relating to exactly how consumers interact with freemium games,” said Hugh Reynolds, CEO of Swrve. “With access of ten’s of millions of players, we have aggregated data from across our system to finally lift the lid on what goes on after install - and where the money is made.”

Consistent with other industries, this report shows that in mobile games, a small number of customers deliver a significant percentage of revenue. Data from this report, also indicates that companies should ask themselves if they understand who the specific customers are that are contributing to the highest percentage of revenue and if they have amended their acquisition strategy accordingly to retain users.

**djones520**

I think we have a new sickness identified ladies and gentlemen.

**Melissia**

Just a reiteration of the old one.

**Dreadclaw69**

Any people wonder why EA were happy to put micro-transactions in their games?

**Melissia**

Eh, let's not make that assumption, Dreadclaw. Mobile gaming's payscheme is... very, very different than the DLC for EA's games.

**LordofHats**

Yeah. Mobile game companies by and large understand how Microtransactions work. EA just throws them into whatever assuming people will buy stuff, and when they don't EA figures the game just isn't profitable anymore

**AlexHolker**

We already knew this. There's even a word for that 0.15%: "whales".

**trexmeyer**

AlexHolker wrote:
We already knew this. There's even a word for that 0.15%: "whales".

What the heck man?

**Kilkrazy**

"Whales" is Vegas Casino slang for high spending gamblers. Although in fact I would expect that casinos make a lot of their money from the very large numbers of low spending gamblers.

You can't gamble for free, after all, whereas you can play Freemium games for free by not spending any money.

**Soladrin**

Didn't know about this years ago? That's how free 2 play has always worked too.

**Maddermax**

On so many very simple mobile games, you can spend an extrodinary amount of money in in-app purchases.

I remember a game I downloaded the first time I got a smart phone, thinking that it looked like settlers, building up a community, but you could build and upgrade faster with "magic beans". When I looked at the in-app purchases in the app, it showed you could buy beans in lots from $1 up to $100.... Seriously? $100 for beans on a crappy town building time waster ??? I could be playing a couple of the latest, greatest games for that!

And yet, that app was, at the time, right up near the top of the "Highest in-app purchases" list, so people were paying that, for a game that you wouldn't pay $5 on any other platform. I also googled the game, intreged by this behaviour, only to see people discussing how much they put into this game, and how the $100 'mega bean pack' was excellent value... People are strange. My take is that there is a small subset of gamers who absolutely will pay for that sort of thing, or for those slot games or chance games (even though they'll never put out real money), and they pay the way for most of the mobile gaming crapware, I'd guess.

**SavageRobby**

AlexHolker wrote:
We already knew this. There's even a word for that 0.15%: "whales".

I was going to say exactly the same thing.

And its not restricted to mobile games, but web games, especially "social" games (ie, facebook flash games) have the same phenomenon. Good games have a total payers per DAU of 3%, great games have more, average games have less. That's just the % of people that pay _something_. The % of people that actually keep the game afloat is remarkably small.

(And typically, the free-to-players are the most vocal and annoying. Go figure.)