Half of all mobile game revenue comes from 2 percent of players, study shows

Only 1.9 percent of mobile gamers made a purchase in February, according to a new study from mobile marketing automation platform provider Swrve, up just 0.4 percent from two years ago.

"The Swrve Monetization Report 2016" found that there was an average of 1.8 mobile game purchases at an average value of $13.82 in a snapshot taken during February of this year. 

In addition, the report revealed mobile game purchases between $0 and $5 represented over 39 percent of all purchases and contributed 14.5 percent of mobile games revenue.

Swrve percent of revenue per unit sales
Swrve game buys per month

The highest number of sales in February were within the $5 per unit range, but tied for the least amount of revenue (top). Users overwhelmingly made just one game purchase per month (bottom). Source: Swrve

  • 64 percent of mobile gamers made a single purchase in February.

  • 7 percent of paying mobile gamers made five or more purchases in February.

  • There was a monthly mean average total spend (within each mobile game surveyed) of $24.66.

  • In-app purchases of over $50 contributed nearly 18 percent of all mobile games revenue.

"The vast majority of players deliver no revenue, again confirming that greater care should be taken in user acquisition to ensure, as much as possible, that onboarded users fit the subset of 'spenders,'" Swrve wrote in its report. "The good news, perhaps, is that free-to-play game publishers are getting smarter around broadening the net of paying players."

Free-to-play titles may hold the key for mobile game developers, particularly if these designers explore ways to bolster their user engagement levels. 

Game designer Andy Nealen noted free-to-play titles may reshape how independent developers operate.

"There was this perception at some point that a game that is indie shouldn't cost more than $10-$15. And then of course, we made that problem worse by making everything cheaper on the App Store, and then free to play. And I know free to play is contentious, but honestly, I think some people are doing it very well," he told GamingBolt

Nealen pointed out many mobile game developers frequently feel pressured to charge for titles but "should not undervalue their work."

Instead, focusing on delivering a fun, engaging experience likely will garner gamers' attention, particularly if a title is free to play.

A recent study from mobile app engagement platform provider Localytics showed free-to-play apps have become increasingly popular, but the key for developers to make money off these titles is customer retention.

"We are in the middle of an engagement crisis," Localytics Content Marketing Manager Justina Perro wrote in a blog post. "Even though mobile is how consumers wish to interact with brands, brands aren't delivering on experience and thus, consumers are churning."

To overcome the "engagement crisis," Perro said developers should focus on defining and tracking an app's lifetime value, using in-app and push messaging and personalizing the user experience. 

"With the mobile takeover already in effect, it's time for marketers to step up if you want to succeed," she stated. "This means making retention a key performance indicator of a successful app, alongside acquisition and engagement."

For more:
- see the report

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