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Microtransactions Contributing Less to Funding Free-to-Play Games, Report Finds

/ Dec 6th, 2012 No Comments

Jetpack Joyride is a freemium game.

Jetpack Joyride is a freemium game.

Microtransactions contribute significantly less revenue to free-to-play mobile games than costlier in-app purchases, according to a new report from W3i.

Purchases between $0.99 and $1.99 have long been considered the main way to fund free-to-play games but W3i found that macro-transactions ranging from $9.99 to $19.99 contribute much more to the total revenue of freemium games.

W3i took a sample of games and surveyed the in-app purchase price points and how they contribute to the total revenue. The report found that free-to-play mobile games receive 47 percent of their total revenue from purchases costing between $9.99 and $19.99, on average. Microtransactions of $0.99 to $1.99 contribute an average of only six percent to overall revenue.

Free-to-play games with paid features have become the norm for mobile gaming with premium and subscription based business models declining steadily. The freemium model is built on the idea of gamers making microtransactions, which means players spend only a dollar or two to unlock features in the game. Instead, that has taken off into larger macro-transactions.

The report was meant to showcase recent trends in mobile app monetization. W3i is the leading in-app offer exchange provider for driving user acquisition and monetization. The W3iNSIDER Report analyzes data from hundreds of game developers and 66 million monthly active users across iOS and Android.

The report also contained international in-app purchasing trends. The biggest spender in the world is the United Arab Emirates (UAE), with 55 percent of revenue coming from purchases of $19.99 and 22 percent from purchases of $9.99. In total, macrotransactions account for 77 percent of in-app purchases in the UAE. The UK has the highest number of big spenders with eight percent of revenue coming from in-app purchases of $49.99. China and Canada each sell $0.99 purchases in the largest volume.

“Although the U.S. learned about freemium gaming from Asia, it’s apparent that Americans are taking their own approach to it,” Robert Weber, co-founder of W3i, said. “Where mobile games in Asia still depend on microstransactions, U.S. gamers play more like whales–spending larger amounts of money in mobile games.”

W3i is a leader in monetization and user acquisition solutions for mobile and web apps. The company offers ways to help developers drive users to their mobile app and make a profit from it using research and ethical business practices.

Ryan Bloom

Ryan Bloom

Chief Editor at Gaming Illustrated
Ryan Bloom is a writer and avid gamer from Orange County. He received a B.A. in Communications with a minor in American Studies from California State University, Fullerton in 2010. Follow him on Twitter @BloomsTweets.
Ryan Bloom
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