Tapjoy: Get consumers to make three IAPs and your mobile game could hit $1M in revenue

Apps that have 1,000 users make at least three in-app purchases (IAP) in the first 90 days have an 84 percent chance of reaching $1 million in total revenue, according to Tapjoy. The mobile ad firm released its Mobile Signals Report, which tracked user behavior primarily in the Asia Pacific region across 479 apps with session counts of more than 1,000 over the period of 14 months, from October 2013 to December 2014. 

  • If 35 percent of an app's IAP purchasers go on to make a third purchase, the app is very likely to reach $1 million in total revenue. If the conversion rate from first-to-third purchase is less than 35 percent, the app will likely fall short of that milestone. 
  • The top 10 percent of games (by revenue) had an average game play session of over 25 minutes, which is 40 times higher than average gameplay sessions among the bottom 10 percent of games
  • The first day of the month tends be the biggest IAP-spending day (at least in Asia), as the first day's average revenue is more than twice the daily average.
  • The majority of revenue comes from a few 'best selling' items--in more than 50 percent of mobile games, the best selling item is sold 20 times more than the worst selling item. 
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The first day of the month tends be the biggest shopping day in Asia, with average revenue more than twice the daily average. (Source: Tapjoy)

"We should guide users to complete as many in-app purchases as possible, at natural stages in our games' conversion funnels," the report says. "If we see that audiences are falling short in reaching three in-app purchases, we should strive to understand why, sooner rather than later. The number "three" is an indicator of whether games are--or aren't--on the right path to achieving the $1MM mark. Use this framework as a diagnostic tool."

While Tapjoy is hardly the first company to suggest mobile game developers double down on IAPs, it's probably important to remember that bad things can come in threes, too. Specifically, if developers fail to make IAPs available in that "natural stage" of a game, they risk users getting annoyed, deleting the app and possibly writing a negative review in the app store. On the other hand, this is a pretty good set of data if you want to be more aggressive about monetization. If more mobile developers want to become millionaires, there's no question they're going to have to get pretty good at the art of selling as well as coding.

For more:
- download the full report here  

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