Tag: in-app purchases

Revenue from mobile games is growing faster than other content

Within the highly competitive mobile apps market, it appears that gaming is coming out on top, at the moment.

According to the results of a study that were only just recently released, the revenues being generated from downloads of mobile games in the United States, as well as those brought in from in-game app purchases is expected to reach a growth rate of 16.5 percent, this year, over last year’s figure.

This would bring those revenues up to a projected total of $3.04 billion from U.S. downloads and in-app purchases alone.

The firm behind this projection is eMarketer, which found that while mobile games will lead the way, there will also be a notable revenue generated from ebooks, video, and music, which will be increasing at a rate of 4.4 percent, 13.8 percent, and 5.4 percent, respectively.

The report provided a considerable amount of insight in this market and suggested two primary reasons that mobile game apps are stepping up ahead of other forms of revenue. The first was from subscription services (for example, Spotify), that is slashing into individual media purchases, as well as the increase of “freemium” games (for instance, Clash of Clans, from Supercell), which can be played for free but where in-app upgrades can be purchased.

Purchases made within mobile games – such as virtual coins – are predicted to make up almost 60 percent of revenue growth.

Mobile Games - GrowthThese in app purchases, will make up 60 percent of mobile game revenue growth, and is predicted to bring in $1.82 billion, this year. As a whole, the download revenue for these smartphone and tablet apps is predicted to increase by 10.3 percent in order to come to $9.82 billion by the close of this year, said the research. Of that, games are predicted to make in a rising share of those earnings.

Last year, they comprised 29.3 percent of the earnings, but that should come up to 30.9 percent, this year. Two years ago, mobile games brought in 26.4 percent of the app download revenues. On the other hand, ebook downloads are going to bring in the most amount of money, at $4.25 billion in the United States. Video will earn $850 million and $550 million will be earned by music downloads.

Spending in mobile games dominated by “whales”

Playnomics sheds some light on spending in mobile games

Playnomics, a social game analysis firm, has released new data concerning the financial aspects of mobile games and in-app purchases. Mobile games are typically free to obtain, which is partly why they have become so popular among consumers. Because many of these games are free, developers rely heavily on advertisements and in-app purchases to generate revenue. In-app purchases, often referred to as microtransactions, are somewhat controversial among consumers, but any controversy surrounding the issue has not been enough to deter consumers from actually spending money on mobile games.

Spending dominated by top 1% of consumers

According to the data from Playnomics, there is a significant disparity among the consumers that are spending money on mobile games. The data shows that the top 1% of new consumers spending money on these games represent 33% of all spending on these games. These consumers are referred to as “whales” in the mobile games space because they hold considerable purchasing power. The data also shows that the top 20% of consumers represent more than 90% of all spending in mobile games.

Mobile Games SpendingMajority of consumers are not spending money on mobile games

Playnomics has examined the behavior of more than 1.7 million consumers that play mobile games and social games. The company found that approximately 0.77% of these consumers were spending money on in-app purchases. The data suggests that the vast majority of consumers are not spending any money on mobile games, apart from the price they pay to acquire games that are not free outright. Playnomics notes that the top 1% of consumers spending money on these games represent the majority of the spending being seen in the mobile games space.

Data shows that a single consumer can spend as much as $7,400 on mobile games

The data shows that a single consumer that is in the 1% bracket can spend as much as $7,400 on in-app purchases. The average consumer will spend approximately $43 on mobile games and in-app purchases. Playnomics notes that consumers will typically spend nearly 30 minutes per play session and complete an average of 5.9 play sessions in any given day.