Topics:

Report: Mobile gamers will spend more money on in-app purchases

Study suggests that charging more for in-app purchases is a winning strategy
Tools

If you're going to offer in-app purchases in mobile games,  a higher price tag won't necessarily scare users away, according to a recent research report.

W3i, which offers tools for driving in-app purchases, published a study based on data from its claimed 66 million monthly active users across iOS and Android developers that showed small transactions ranging from 99 cents to $1.99 accounted for only six percent of total game revenue based on its sample. In contrast, close to half, or 47 percent, were relatively big-ticket items, costing $9.99 to $19.99.

The challenge for many developers may be deciding what price or price range is right for a given purchase. Based on the W3insider Report, the high end could be up to $49.99, which generated more revenue than any price point above $24.99. In fact, charging more for in-app purchases may be more effective than gradually moving users from downloading a game for free to a monthly paid approach, according to W3i.

IAPs

W3i: Microtransactions are on the decline as macrotransactions are taking over free-to-play mobile gaming.

View a larger version of the image here.

"The freemium model emerged as the foremost business model in mobile gaming with premium and subscription business models declining," the report said. "The freemium model is built on the back of microtransactions with gamers spending a dollar or two to unlock virtual goods."

Though W3i has an obvious interest in promoting more expensive in-app purchases, its report is consistent with the findings of similar research. In October, for example, a study from the NPD Group said $3 was a better fee for in-app purchasing than 99 cents, while app store owners like Amazon have said $4.99 IAPs perform better than $2.99 ones.

On a global scale, the W3insider Report said Canada and China represent the biggest market for IAPs, where they make up about three percent of purchases. Tthe highest-spending region, at 77 percent of revenue coming from purchases between $9.99 and $19.99, is the United Arab Emirates. What may be more significant for most developers, however, is the number of "whale" spenders--the people who spend the highest amounts on an individual basis. W3i says internationally, that honor falls to the U.K., where eight percent of revenue in October came from $49.99 purchases.

For more:
- see this report

Related articles:
A game app developer's guide to monetization
Study: Freemium app model gaining traction with developers