The addition of free to play games in the app stores has certainly provided a revolution for developers, as this way they have the opportunity to offer the titles for free, while monetizing the apps with the help of in-app purchases.
Based on multiple reports, it seems that only around 1.5 or 2% actually make in-app purchases in order to improve their game experience, so most of the player base, even if it’s a large one, won’t generate any income. Alongside that, the monthly average of in-app purchases for those that do perform them is around 15$.
Not only that, but around 50% of those that do buy in-app services usually get them once, so they can’t be counted as recurring. There are however, multiple people that make 5 or even more purchases each month, even though they comprise only 13% of the paying base. Even so, if the player base is a very large one these figures can easily go up, so making a very appealing game certainly increases the chances of having a profitable game.
The freemium model offers, on average, an in-app purchase value of around $5 per each person that decides to buy. Interestingly enough, even if the purchases lower than 5$ are the majority, they actually contribute to only 27% of the overall revenue, because there are quite a lot of people that make higher purchases. Yes, only 0.7% of all paying gamers might shell out 50$ per month, but as we stated earlier, within a large player base these numbers can easily add up to a spectacular results. It’s also important to know not that many SKUs are actually falling in this range.
Reports also show that half of the revenue comes from only 10% of people that pay for the in-app purchases, so 0.15% of the whole player base brings half of the revenue, which is indeed a very interesting and of course, somewhat troubling thing to find out. Not only that, but it seems that actually 13% of the whole revenue comes from 1% of the whole payers, which is indeed a very interesting thing to find out.
The most important thing is to identify the customers that pay and cater to their needs, as well as provide some incentives that will make the non-paying base to start making in-app purchases. This means that you need to modify your strategies accordingly in order to cater to the most important player bases.
Lastly, an interesting piece of information is that the average time to the first purchase is around a day, so new players spend a little time getting to know the app before they buy any in-app offer. Once they do start making that first purchase, the second one usually follows a few hours after.
In the end, monetizing the freemium applications can be quite hard, as only a small fraction of the whole population actually pays for the games. Despite that, getting a good glimpse at the data presented in this article will help you focus your strategies on the paying population accordingly.