Only 1pc of app gamers pay for in-game content

28 Feb 2014

In a stark warning to game app designers, a new report shows that only 0.15pc of players playing ‘freemium’ apps actually make in-game purchases.

The report (full report requires download) has been completed by Swrve, a gaming app marketing company that has been analysing consumer trends to see whether consumers, when offered a free product but with the ability to advance more quickly in-game ,actually step up and pay for those in-app purchases.

The findings in the report excluded in-app advertising but still found that of these paying players, the average monthly spend of a player would be US$15.27 (€11.14) or a little over US$183 (€133.50) per year.

The figures show this 0.15pc of monthly players who make regular in-app purchases account for nearly 50pc of an app’s total annual revenue, which only raises serious questions for app developers looking into the freemium model.

Customers are also shown to be quite reserved when it comes to making these purchases, as a considerable majority (48.8pc) make only one in-app purchase ever in the game, while only 13.2pc make five or more purchases.

The question then remains whether this is financially viable to a company. For example, if only 0.15pc of people pay for a game that has had more than 5m downloads, that still leaves 7,500 people making purchases on an app which may have cost little to make.

However, Swrve’s report shows that 66.8pc of purchases are in the US$1-5 range, while only 0.7pc spend US$50 or more, which would indicate a low-level revenue stream.

Pressure to make in-game purchases

One of the most interesting figures to come out of the report show the psychological effects of a freemium game that limits players’ ability to progress quickly unless they make in-game purchases.

The figures show that people are much more likely to make a rapid series of purchases in a short space of time with the typical time lapse between the first and second purchase being only one hour and 40 minutes and then dropping off rapidly thereafter.

The freemium model has come under question in recent months, as some governments and organisations feel the model is misleading customers into thinking the app is free when it is not.

One game in particular, Dungeon Keeper, has recently been criticised for making it almost impossible to play without making significant purchases in-game.

Apps icon image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic