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Study: Half of In-App Purchases Come From Only 0.15% of Players
An anonymous reader writes "Have you ever seen a goofy microtransaction for a mobile game you play and wondered, 'Does anyone actually buy that junk?' As it turns out, few players actually do. A new study found that only 1.5% of players actually spend money on in-app purchases. Of those who do, more than 50% of the money is spent by the top 10%. 'Some game companies talk openly about the fact that they have whales, but others shy away from discussing them publicly. It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else.' Eric Johnson at Re/code says he talked to a game company who actually assigned an employee to one particular player who dropped $10,000 every month on in-app purchases."
Meanwhile, in-app purchases have come to the attention of the European Commission, and they'll be discussing a set of standards for consumer rights at upcoming meetings. They say, 'Games advertised as "free" should not mislead consumers about the true costs involved.'
See title.
Here I am, trying to sell the Golden Gate Bridge on the street and I could be selling it in a game.
I've got to get caught up on synergies of new technology, to coordinate my vision of business core-competencies with the emerging paradigm.
A feeling of having made the same mistake before: Deja Foobar
" only 1.5% of players actually spend money on in-app purchases. Of those who do, more than 50% of the money is spent by the top 10%. "
1.5 * 10% = 0.15...
A person who spend 10,000$ a month on a game has a problem and someone who's trying to exploit someone's problem in order to become rich is nothing but a thief. The man behind that company should be put behind bars.
Any time I "buy" all the microtransaction purchases, I feel like I'm cheating. There's no challenge anymore and I usually delete it. Not just games either is the weird part. A paint program for my 2 year old, after he couldn't bring up the "type in your password to buy this thing" screen anymore he was bored of it.
Perhaps it's just that as a general rule, apps that have microtransactions suck in other ways, and even if you pay nothing for them, it's not worth it.
The other half come from 99.85% of players
I consider playing the game without doing in-game purchases part of the game. It's a good challenge and if you work it right, you can use it to teach children about economics. No, I'm not kidding. It's all about allocation of resources and also setting goals and priorities (and sticking to them). You just need to show them how to do it properly in the game.
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- Douglas Adams
The problem with in-app purchase is that it is destroying the games. I agree with this article.
I think the suggestion by the EU, that you cannot label apps with in-app purchases as free, is really good!
Except video game players are more accurately described, than even casino players, as whales.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
If a few rich guys want to subsidise a game i enjoy than all the best to them. I can play for free as long as they have more money than sense; if they suddenly stop paying i might lose the game i enjoy but don't want to actually pay any money for.
That being said in-app purchases in mobile games are still abusive, dangerous and downright evil.
He must really like Angry Birds GO!
This is kind of an interesting number. I have have found a vast majority of the mobile games to be utter trash, that attempt to cash in on in game purchases while failing to implement a set of solid basic game mechanics. I would gladly drop $30 (or more) just to play a good mobile game that wasn't a poorly concealed slot machine. I wonder if the general shitty state of mobile gaming is causing a disproportionate number of players to not spend cash, or it is just the nature of people being cheap when it comes to 'free' apps. ('I am not going going to spend money on a game that is free', or 'I am not going to pay to win')
As an aside, the 'Freemium' model is really the scourge of the industry right now, with devs looking for easy ways to extract more money from the player base while providing no real product in return.There are a few people who do it right (WoT, LoL, and TF, for example) and a huge pack of greedy shills who are following in their footsteps.
A lot of the free to play model games basically let you pay to win, does this 0.15% number line up with the percent of the general population that is incapable of delaying gratification? I bet you could correlate this number with the result of some psychology study on the topic.....
HA! I just wasted some of your bandwidth with a frivolous sig!
$10,000 is chump change. They already control more wealth than 50% of America, so why not blow it on in-app purchases.
The amusing corollary is that I bet all of those game developers don't realize that their customers, their target audience, are actually the top 0.15%. I wonder if that would change their strategy...
I've played games like "Path of Exile" where I've enjoyed the game so much, I decided to drop $20 or so on in-app purchases, even if they weren't going to actually help me advance in the game. I've done the same for other apps that I've enjoyed. If you enjoy the game, it can't hurt to reward the developer. Now, $10,000, well that is a bit extreme.
"whales, like gambling addicts, subsidize fun for everyone else."
"Whales" as the jerk calles them, are people who pay because they want to win, to dominate other players. Lose some non-paying customers and they'll lose paying ones too.
In a multiplayer game, players are part of the game itself.
Check if the game immediately starts suggesting you go to their store in order to be useful -- if it looks like you'll never get anywhere without buying the baubles, uninstall it.
Does half an hour count as "immediately" to you? Because in Doom, a speedrunner has proved that it takes only 6 minutes and 7 seconds from game start to "You've completed the demo. You can unlock the rest of the game with a one-time payment."
'Games advertised as "free" should not mislead consumers about the true costs involved.'
My gosh, someone should warn people! When you buy things, it costs money!
Maybe we should have them issue a warning that "buy one, get one free" isnt actually free: buying one costs you money. How sneaky!
I consider playing the game without doing in-game purchases part of the game.
So how did you pass the end of "Phobos Anomaly" in Doom? You know, the one where it asks you to buy the rest of the game to continue. My point is that there's a continuum between the shareware model and the abusive wait-barrier IAP seen in My Little Pony and Dungeon Keeper.
If you are not paying for a service, you are the product being sold (cheap AI) and not the customer.
Allow me to buy stuff for others. I'd buy Nariel Pridence anything she wanted. New spaceship? New planet?
we should collaborate, make our own game that's nothing but microtransactions
I believe that game is called "Bitcoin". It even has a character named after the protagonist of Pokemon.
Except video game players are more accurately described, than even casino players, as whales.
This is what Zynga reported years ago (before the bloom went off their rose) [1] - this entire economy seems ... ripe for abuse as a mechanism for laundering money in my opinion. In Zynga's case, I told one of my friends who worked there that if I was an investor, I'd love to be funneling money to Zynga, while my stock represented 100x the value of whatever I "donated". That's just one use case, it could be used simply to launder money from "users" to "developers" (what if they're both the same) - going through an app store runs the money through an reasonably effective one-way function at a basic cost of 30% overhead.
[1] http://www.businessweek.com/ma...
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This is not new. When you go into the grocery store, everything is 1/3 more free, buy one get one free, 5 for $5, $0.99. Advertising. Data-mining. Figuring out how much your internet will cost after the 6 month introductory rate. These are all obfuscations and manipulations.
I don't think you can just say, oh some people are just stupid, these manipulations don't work on me. We're all cynical. We all know the games aren't free, that we're being suckered. If someone asked us rationally would you rather pay $3 for a game designed to be fun versus a free game specifically designed to constantly bother you for money, many of us would say we'd pay $3. But then you're bored and want to waste 5 minutes so you go into the app store and there's the $3 game next to the free game. $3 is a commitment, maybe it isn't good. Download the free game. It sucks. Whatever. Next guy does the same. Boom. Suddenly the $3 game doesn't show up when you look at what games everyone is playing.
It's really not obvious how to avoid obfuscation and manipulation in a 'free' market.
A while back I had a discussion with a buddy in the gaming industry about a fashion game. It had become popular with a click of girls with too much money to spend, oil barren kids and the like. Per the developers, they would drop 10k easy to obtain all of the virtual outfits. This could be the game in question, and if so, I don't feel sorry for them.
There is a lot of shaddy practices in the free2play world, but sadly I don't find the 'brick and mortar' world much better.
There is a *lot* of soulless games thar produce impressive screenshots and videos, but then are curiously devoid of depth and gameplay, lasting only one or two sessions. Do you know why? That is because you pay before you play and the game can dispose of you once you dipped. That kind of game is designed to get players interested before they get access to the game, so they will get to you with a massive (if short) marketing campaign, and bribed reviewers. Ask around and you'll meet a lot of old players who don't play games anymore because the games have stopped giving them what they want (things like duration, content and depth) and instead they are all about big cutscenes and FX.
On the other hand, the freemium world is slowly being taken by non-games designed to exploit purchasing impulses and gambling genes. Developers such as King.com are just small-time criminals operating on a very large scale. Everything on their 'games' is fraud, a deception designed to give you false value for your money at the moment when you are most vulnerable. We need legislation against that kind of shit. Those people should be in jail, not laughing at the world and amassing millions. There is a reason why gambling is tightly regulated, when not downright illegal, and this is no different (in fact, it is even worse; this is like a form of gambling where losing is guaranteed).
That being said, freemium can be done right. In fact, it is probably awesome when done right. Path of Exile is excellent, for example. The sad thing is, that kind of game can't exist at the brick and mortar world (sorry, not flashy enough, you need a $100 million production for each four hours worth of content to compete there) and can't compete at a pure freemium market such as mobile (sorry, you need to pay for visibility there, and at such rates that only fraud games designed to exploit gamblers can compete).
So, why arent "in app purchases" considered gambling yet anyway ? I'm playing a nice game of .. lets say .. Boker here on my crappy android phone. Another in app purchase lets me play another round at the "high rollers" chat room .. why is that different than physically sitting at a table in Bellagio ?
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0.15% of the players, 50% of the revenue!
The truth is, these games are setup to milk money out of a few rare people that have both money and a serious enough mental disability that they're compelled to fall for these immoral tactics. The blatant exploitative behavior of these "Developers" is shameful.
You are, like, talking of the shareware "demo" version of Doom.
I think part of the confusion is that app stores don't let developers say "demo", "trial", or "test" anymore. See section 2.9 of Apple's App Store Review Guidelines from September 2010. (I apologize for the outdated information; newer versions are behind a $99 per year paywall.)
The complete game doesn't act like that
I'm aware of that. But nowadays, it'd more than likely be implemented on devices with the engine and first episode available without charge and episodes 2-3 (and later 4) as a paid expansion purchased through the platform's in-application purchase framework. I guess part of this was directed at some of the criticism of OUYA, which requires all games in the store to have at least some free-to-play experience, at around the time when games for major consoles were devoting disc space to paid day-one DLC and mobile games were starting to abuse repeatable IAPs just to allow taking more than a handful of turns in one 24-hour period. People saw "IAP" and knee-jerk replied in a manner that showed that they had forgotten about the traditional shareware model.
If you consider shareware "embarrassing", what's a better way to evaluate a purchase before making it?
If I had an extra $10,000 a month to spend, I'd much rather spend it on vacations with my family than microtransactions in a game. Call me crazy, but $10,000 can buy a pretty incredible vacation (or a series of incredible vacations) with life-long memories. Who's really going to look back 20 years from now on how they got some extra items in some mobile game that likely won't even exist anymore?
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
... this is just an observation of the pareto principle?
File under 'M' for 'Manic ranting'
As I understand what you're trying to tell me, shareware that makes the user leave the program's UI to upgrade is better precisely because the user has to leave the program's UI to upgrade it. I don't agree yet, but if you're willing to explain in more detail how making a product less convenient to buy makes the product better, I'll consider it.
Paradoxically, I'd probably quit if WoW became free-to-play, but limited until you paid
In that case, you should have got out in mid-2011 when World of Warcraft became free to play up to level 20.
... and the small percentage of feeders are ruining videogames as a whole. It sucks that these people exist, they are fucking up gaming.
He got an iPod for his birthday, and of course when you set up the accounts for it you need to attach to a credit card, or at least it seemed that way to us back then. He's generally a good kid so we told him to come to us before he bought anything, and left it enabled.
The problems started when he got $100 total iTunes gift cards for his birthday from various people. Now he had money that could only be spent on games, and no total remaining balance was shown. He got in the habit of just typing in the password to purchase whatever in-game gems he wanted.
Before too long, our credit card was being charged. My wife watches the bills, but because she assumed it was me spending the money didn't question those charges. It took 9 months before we communicated properly with each other and our son about the charges. By this time the total was in the many hundreds of dollars.
I'm frustrated the credit card had to be tied in to the account, but feel we were largely responsible for this insanity.
To Apple's eternal credit (pun intended), they gave back every penny (and this was before the recent legal settlement). I don't intend to be a shill here, but with that kind of support you can be certain I'll be buying their hardware for many more years.
Here's a conspiracy theory for you: what if all the big spenders are just people buying stuff with stolen cards? Spending $10,000/month makes a lot more sense when it isn't your money. Plus, online purchases don't have the risks. So it seems like a logical place for stolen cards to be used.
The credit card companies would have long since started flagging Internet game companies as such high risk that they'd be out of business.
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Tell that to the StarCitzen dev team and hardcore fans. From what I've heard 10k is pocket money for some of those people, and the game is not even close to be released yet.
I think there is a difference between clearly advertising something as a "demo" (and listing the price for the full game upfront)or "first episode free" (and then clearly listing all the remaining episodes upfront with prices)
It'd have to be the latter because the App Store bans the word "demo".
These devices' app stores' policies funnel all payment through Apple and Google, which presumably have people working full time on managing payment processing risk.