Report shows that most mobile game revenue derives from a small pool of players
Does the same trend apply to digital edition apps, paid subscriptions? The lack of research may force digital publishers to work in the dark
The press release below doesn’t say anything new that many app developers don’t know: the vast percentage of app revenue goes to a very small percentage of apps. It is also likely true that a small percentage of app buyers account for much of the app sales, as well.
Here, Swrve sees the trend translating to mobile games, finding that “just 0.19% of all players accounting for 48% of all revenue.”
I’d like to see a similar report of both digital edition apps and news website subscriptions. It feels logical that someone who enjoys reading digital magazines, for instance, would be more likely to have a folder filled with titles; whereas the person who prefers print probably has zero digital edition subscriptions active. True? I don’t know, but it feels right.
What this report doesn’t really address is the issue of app revenue being dominated by a few popular apps, a trend many developers feel is all too true. The lure of the App Store, and Apple’s constant reminder about who much money they have paid out, has meant many developers have entered the space thinking there was gold out there somewhere. Sadly, many PDF replica app makers use this same tactic to convince small and self-publishers that all they need do is launch an app and the money will come flowing in. It’s not true, as the number of abandoned apps attest to.
Here is the announcement regarding the findings from Swrve:
San Francisco, CA – March 23, 2016 – Swrve, the world leader in mobile engagement, today announced the results of its latest 2016 Mobile Monetization Report. The just-published report reveals that free-to-play game revenue remains skewed towards a small group of most active spenders – with just 0.19% of all players accounting for 48% of all revenue.
Although this represents an improvement over previous reports showing up to 60% of revenue attributable to the top 10% of spenders, it confirms again the need to focus mobile game marketing strategies on VIP players.
The report covers the latest industry data relating to the monetization of free-to-play game players on mobile, based on real user data covering tens of millions of mobile gamers.
The report also indicates the focus on acquisition within the games industry may be coming to an end, as companies continue to manage the player lifecycle; the percentage of players who paid for in-game content in February was 1.9% (from 1.5% in 2014) and average monthly spend was $24.33, up from $22 in the 2014 report – although this figure was down in 2015.
- 1.9% of all players in the month made a purchase with real money;
- Of paying customers, 64% make one purchase, while only 6.5% make five or more;
- The typical paying player makes 1.8 purchases, averaging $13.82 per purchase – a new high for average individual purchase value;
- 2.5% of all purchases are now over $50 in value, and these purchases contribute over 17% of all mobile game revenue.
“While the mobile games industry continues to evolve, there’s no doubt it remains dominated by big spenders,” said Christopher S. Dean, Swrve’s CEO. “As a result, it remains as important as ever to ensure games companies market effectively to the existing player base, both to optimize the experience for VIP players, but also to maximize the total number making purchases.”
The report was restricted to free-to-play games and examined 30 days of behavior for all players playing a game in February 2016. Data was collected from over 40 titles, and reflects the behavior of more than 20 million players.