The next time you see someone furiously pounding away on a mobile phone game you can be pretty sure that the person is a cheapskate. At least when it comes to their willingness to shell out big bucks for a game.
According to a report by SWRVE, a market engine for freemium games, only 1.5 percent of active game players made an in-app purchase in January. This means that except for any advertising revenue garnered, hardly any games generate revenue for the game maker. The report points out that for a game maker to have any chance of making money they must market it toward the very small and specific group of people willing to pay for games.
Exactly how small is that group? Just 0.15 percent of all game players were responsible for 50 percent of the game revenue made in January. So game makers interested in targeting the right audience need to zero in on this group with its marketing, SWRVE's report noted.
" Similarly, high value purchases (those over $50) unsurprisingly account for a mere 0.7% of the total number, but a still significant and sizable 9% of total revenue. It is worth noting that very few SKUs in fact fall into this range. Those titles that currently do not offer SKUs at prices greater than $50 should probably consider introducing them," the report stated.
SWRVE believes these are the people to target. On the average they buy more games per month, around 7, and with an average amount spent per purchase of $11.1.
In order to capture this audience SWRVE recommended three tasks for freemium game makers:
- Have we identified these customers within our own business?
- Are we investing appropriate time and resources on retaining this specific group of players?
- Do we understand where they come from, and have we amended our acquisition strategy accordingly?
The remainder of the game buyers in January skewed heavily towards the opposite end of the spectrum.
Of all game purchasers, 49 percent bought only one game in January, 21.2 percent bought two games, 6.1 percent four games and 13.2 percent five or more. In addition, about 89 percent of all games purchased cost less than $10, but accounted for 54 percent of the total game revenue. Just over 8 percent of the purchasers spent between $11 and $20, but accounted for a healthy 22.4 percent of the revenue, while just over 2 percent spent $21 or more for about 23 percent.
