3% of gamers pay for in-app purchases; most sales are consumables
A month after posting about freemium gamers on Android an iOS, Flurry Analytics released a chart showing where gamers spend their money. Almost 70 per cent spend it on consumables. Most of it is on virtual currency, but anything that can help them advance in the game is worth it. The other 30 per cent spend it on persistent goods that don't disappear after use.
In their post last month, Flurry showed that 97 per cent of gamers don't pay for premium content. Of the 3 per cent that do, price isn't a big deterrent. For example, over 5 per cent of purchases are worth over $50 compared to less than 2 per cent at the $0.99 price point. The conclusion for developers is once you have a paying customer, you can charge them more than you might think. The decision is more over whether to spend anything at all.
Flurry calls the people who are willing to spend over $20, "whales." And they may be right. Purchases over $20 account for over 51 per cent of total revenue despite tallying only 13 per cent of transactions. Hear that developers? Price your in-app goods at $20 or more, that's how you make money.
But that's what Flurry talked about a few weeks ago. Today, they've added the breakdown of what these customers are spending their real dollars on. And it turns out, gamers like stuff that can be used up. 68% of purchases are on goods that can be consumed. In a farm game, think seeds. Angry Birds had a great consumable in-app purchase using an eagle that would destroy an entire level.
Second, with 30 per cent of spending was on durable products, a little bit of a misnomer considering these are virtual goods. But, basically this would refer to anything that stays with you throughout a game. Think upgrades for a car, a special gun for a shooting game, or a building in a virtual development.
The other 2 per cent is on personalization. Obviously, personalization is an infrequent purchase which accounts for the smaller revenue numbers.
All in all, the lesson for developers is two-fold. First, target the big spenders, while providing reasonable options at mid-level pricing too. Second, create options for purchases that help to pass painful points and complete effort-based tasks in games. Basically, help gamers finish the game and buy their way past any particularly challenging areas and you'll have great virtual sales.