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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 $10,000 every month on in-app purchases."
Meanwhile, in-app purchases have come to the attention of the European Commission, and they'll be discussing a set of standards for consumer rights at upcoming meetings. They say, 'Games advertised as "free" should not mislead consumers about the true costs involved.'
1.5%* Top 10% is 0.15%... which is what the title is referring to. Please read full summary before ripping title.
Here I am, trying to sell the Golden Gate Bridge on the street and I could be selling it in a game.
I've got to get caught up on synergies of new technology, to coordinate my vision of business core-competencies with the emerging paradigm.
A feeling of having made the same mistake before: Deja Foobar
Only 1.5% spend any money. 1 in 10 of those spend 50% of all the monies. So 0.15% spend 50%.
Were you told there would be no math? RTFS and DTFM.
If Slashdot were chemistry it would look like this:Cadaverine
I don't expect you RTFA but atleast finish the blurb before complaining.
A person who spend 10,000$ 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.
I see. Those are indeed two different numbers that you typed out there. Good work AC! Or is this like a fight? I'm thinking the 1.5% would win if it came to fisticuffs. I'd give it ten to one odds in fact. 0.15% may have an extra numeral in there, but I don't think the zero is worth much in the ring.
Or is it you want to DISCUSS the differences? There's a decimal place of difference. I might start out with Khan Academy if you need further explanation of maths. I don't know if they do percentages and decimal place explanation.
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.
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.
The simple truth is that interstellar distances will not fit into the human imagination
- 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.
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!
There's actually two different numbers at play here:
So, half of all spending comes from 0.15% of all players, and only 1.5% of all players spent anything (and make up the other half of spending).
The rest of us refuse to hand over money for whatever in-game gimmick you have implemented which makes the game suck without it and end up uninstalling the damned game.
Lost at C:>. Found at C.
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.
Sorry, you clearly grasped that ... but clearly some people are having a hard time understanding it.
Lost at C:>. Found at C.
The title should say "Half of In-App Revenue ..." then, just like the article.
At risk of a "whoosh" moment, I don't think it's reasonable to assume that it's predominantly rich people who spend money on this. Maybe they're mostly middle class.
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.
Or kids using their parents credit cards...
There are many stories of kids racking up thousands of dollars on in-game purchases in games that seem to specifically be targeting kids.
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.
The rest of us refuse to hand over money for whatever in-game gimmick you have implemented
Speak for yourself. I am part of the 1.5%. When I asked my five year old nephew what he wanted for Christmas, he said he wanted, more than anything else in the world, a $5 bushel of virtual smurfberries. So I bought them for him. I am now his favorite uncle.
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...
Make sure everyone's vote counts: Verified Voting
See title.
See summary.
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.
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 ?
http://validator.w3.org/check?uri=http%3A%2F%2Fwww.slashdot.org Errors found while checking this document as HTML5!
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.
I'm guessing his parents turned him down, so he looked for some other sucker.
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.
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.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Were you told there would be no math? RTFS and DTFA.
FTFY
Great spirits have always encountered violent opposition from mediocre minds -- Albert Einstein
I downloaded that game for my kids when it first came out. I promptly deleted it when I realised how much nagging it does to get kids to make in-app purchases. In-app purchases in games aimed at pre-schoolers and elementary school age kids are unethical in the extreme, and should be the first thing regulators go after.
How many of the 1.5% (and the 0.15%) are people who don't know how to secure their iPhone/iPad to stop young kids from making in-app purchases without any idea that they are spending real money?
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.