Date: February 26th, 2014
To read the full report, click here
San Francisco, Calif.– Feb. 25, 2014 - Swrve, the leader in relationship marketing for mobile apps, today announced the results of its first-ever Mobile Games Monetization Report. The report, which will be released on a monthly basis, reveals exactly where and how freemium games earn revenue from players.
Findings from this report indicate that an extremely small portion of players, just 0.15%, account for 50% of monthly revenue from in-game purchases. This means that the vast majority of players deliver no revenue and reiterates the importance of acquiring and retaining users that fall into the “high spender” category.
Key Report Findings:
- The vast majority of players do not make any purchases, in fact only 1.5% of players active in the month surveyed made an in-app purchase in that month.
- 50% of revenue is derived from the top 10% of those players who do make purchases. Expressed as a percentage of total players, this group represents a 0.15% of the total players in any given month.
- 49% of all payers make only a single purchase per calendar month, while only 13% of paying players make five or more purchases. A significant amount of spend activity takes place within the first 24 hours the game is played
- The average time to first purchase is just under 24 hours. And of those players who go on to make a second purchase, the average time lapse between first and second purchase is a mere 1 hour 40 minutes
- 53% of players who make a purchase go on to make a repeat purchase within 14 days, while 47% do not.
- 13.7% of new players accrue more than four purchases in their first 14 days.
- Of revenue accrued within the first 14 days of a player’s life, over 60% is accrued on the first day of life.
- The average value of an in-app purchase is $5.94. While purchases between $1 and $5 represent a majority (67%), they contribute only 27% of total revenues. Purchases of over $50 contribute 9% of all revenues
- SKUs over $50 account for 0.7% of all purchases and contribute 9% of total revenue.
“What’s interesting is that while many consider that the freemium model to be successful, there is still surprisingly little data relating to exactly how consumers interact with freemium games,” said Hugh Reynolds, CEO of Swrve. “With access of ten’s of millions of players, we have aggregated data from across our system to finally lift the lid on what goes on after install - and where the money is made.”
Consistent with other industries, this report shows that in mobile games, a small number of customers deliver a significant percentage of revenue. Data from this report, also indicates that companies should ask themselves if they understand who the specific customers are that are contributing to the highest percentage of revenue and if they have amended their acquisition strategy accordingly to retain users.
The report was restricted to freemium games and examines revenue delivered via in-app purchases that took place across the Swrve network. The report was restricted to a single month of data, January 2014, and Swrve surveyed user data from ten’s of millions of people to identify the results.