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Study: Half of In-App Purchases Come From Only 0.15% of Players 144

Posted by Soulskill
from the pay-5-slashbucks-to-continue-reading-this-summary dept.
An anonymous reader writes "Have you ever seen a goofy microtransaction for a mobile game you play and wondered, 'Does anyone actually buy that junk?' As it turns out, few players actually do. A new study found that only 1.5% of players actually spend money on in-app purchases. Of those who do, more than 50% of the money is spent by the top 10%. 'Some game companies talk openly about the fact that they have whales, but others shy away from discussing them publicly. It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else.' Eric Johnson at Re/code says he talked to a game company who actually assigned an employee to one particular player who dropped $10,000 every month on in-app purchases." Meanwhile, in-app purchases have come to the attention of the European Commission, and they'll be discussing a set of standards for consumer rights at upcoming meetings. They say, 'Games advertised as "free" should not mislead consumers about the true costs involved.'
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Study: Half of In-App Purchases Come From Only 0.15% of Players

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  • $10,000?!? (Score:5, Funny)

    by ackthpt (218170) on Friday February 28, 2014 @03:10PM (#46369549) Homepage Journal

    Here I am, trying to sell the Golden Gate Bridge on the street and I could be selling it in a game.

    I've got to get caught up on synergies of new technology, to coordinate my vision of business core-competencies with the emerging paradigm.

    • Re:$10,000?!? (Score:5, Insightful)

      by CanHasDIY (1672858) on Friday February 28, 2014 @03:21PM (#46369645) Homepage Journal

      Here I am, trying to sell the Golden Gate Bridge on the street and I could be selling it in a game.

      I've got to get caught up on synergies of new technology, to coordinate my vision of business core-competencies with the emerging paradigm.

      I was thinking the same thing; we should collaborate, make our own game that's nothing but microtransactions...

    • I hope you're getting more than $10K per month for that bridge, can you imagine what the toll booth takes in?

    • no...you forgot to develop a cloud-based API in Ruby that leveraged social graphs and advanced mapping functions...

      nobody could figure out what and where a "Golden Gate Bridge" was...

      • by ackthpt (218170)

        no...you forgot to develop a cloud-based API in Ruby that leveraged social graphs and advanced mapping functions...

        nobody could figure out what and where a "Golden Gate Bridge" was...

        I guess I need to actualize more. I'll start forming a committee to look into it.

  • by Anonymous Coward on Friday February 28, 2014 @03:21PM (#46369643)

    A person who spend 10,000$ a month on a game has a problem and someone who's trying to exploit someone's problem in order to become rich is nothing but a thief. The man behind that company should be put behind bars.

    • May or may not be. However, I disagree to use legal to intervene the issue because it is easily abusable in the future. If the rich person can afford it, be it because it is not my problem (and should not be yours).

      And by the way, the rich person they are talking about is a woman!

      The company, he said, had assigned an employee to cater just to that whale, to ensure that she was always satisfied with the game and therefore likely to keep coming back.

      • I was listening to TWIT a few weeks back - one of the panelists said she'd spent something on the order of $400 playing Candy Crush. That amount floored me... I couldn't believe anyone would do that!

        And now this - $10,000 a month is INSANE!

        • by mythosaz (572040)

          What's $400 over what could easily be a year or more? Probably a dent in his daily Starbucks budget.

          I grew up playing arcade games at $0.25 a play.

          Occasionally spending a buck for another 20 minutes of Candy Crush when I'm bored is a harmless dent in my yearly entertainment budget.

          • I was thinking the same thing... I spent $1-$1.50 a day at the arcade everyday after school. Of course my kid's have an xbox and rent or buy a new games all the time. $400 on entertainment doesn't sound amazing if it's spent a little at a time over a year.

            • by mythosaz (572040)

              Heck, $400 might just be a good night on the town. How we value our entertainment dollar is entirely subjective.

              • Well.... I know I spend over $1k on cable a year the idea of really figuring out how much I spend on entertainment gives me pause since it might actually appall me.

        • by smooth wombat (796938) on Friday February 28, 2014 @04:19PM (#46370225) Homepage Journal
          she'd spent something on the order of $400 playing Candy Crush. That amount floored me... I couldn't believe anyone would do that!

          But it's okay if someone spends the same amount of money on a video card, camera lens, monitor or anything else they want to spend the money on, right?

          Just because you wouldn't spend that much money on a game doesn't mean others won't. How much money did you spend (if you're old enough to have done so) on video games growing up? I would be willing to bet you easily spent that much enjoying yourself playing games.
          • Haha, you're probably right - I do remember throwing a lot of quarters at Donkey Kong, Bezerker, Asteroids, and the like when I was in college (yup I'm old).

            Looking back, I probably should have saved that money and invested it!

          • by kaladorn (514293)
            So you are comparing lifetime expenditures on various coin-op video games over years of time versus single limited-duration expenditures in a single game app? Seems a bit like comparing apples and oranges.

            I probably spent a few hundred dollars in coin machines in my lifetime. I never spend more than about $10-15 in one place (even at my most excessive which was university and John Elway's Football or MLB baseball).

            And I can only imagine spending $10K a month if I had more money than I needed and if so, I am
        • Keep the numbers in perspective, 0.15%.

          Being on a "smartphone" or "tablet" puts you easily into the top 70% of the socio-economic strata... poor people carry prepaid burners.

          So, the people have money, 1.5% of them are willing to crack open their wallets, and 10% of those just don't care.

          The top 1% make more than $500K/year, and we're talking about 1/1000 type people here...

          http://www.washingtonpost.com/... [washingtonpost.com]

          Sure, if I made $50K/month, I probably wouldn't blow $10K of it on cocaine and hookers, or candy crush,

    • Should casino's be shut down because some people spend more then $10,000 a month gambling, should the NFL be dismantled because some people paid $10,000 for two seats to the Superbowl? People are paying for entertainment, just because some value it more then you or I, does not make it stealing.
      • by squiggleslash (241428) on Friday February 28, 2014 @04:00PM (#46370047) Homepage Journal

        You're not really helping your case. Gambling, is, actually subject to a massive amount of regulation precisely because it's the kind of thing that people endup losing their shirts because of a combination of rather normal (that is, most people in the same position would misjudge the odds) poor judgement on their part, and predatory behavior on the parts of others. Casinos and bookies have long been subject to heavy regulation where they are legal, and are outright banned in much of the world.

        On the other hand, Bitcoins aren't regulated yet, so there's that.

        • So, why arent "in app purchases" considered gambling yet anyway ? I'm playing a nice game of .. lets say .. Boker here on my crappy android phone. Another in app purchase lets me play another round at the "high rollers" chat room .. why is that different than physically sitting at a table in Bellagio ?

      • Casinos should be shut down if they advertise "FREE" gaming, then get you more or less physically addicted to the game before slipping in a "insert credit card here to get what you really really want...."

        For a small percentage of the population, gambling is a weakness that they cannot control. Exploitation of those people should be banned.

        Not everybody who spends $10K/month gambling is being exploited, but those who spend their last rent and food money on it, are.

    • by ackthpt (218170) on Friday February 28, 2014 @03:42PM (#46369879) Homepage Journal

      A person who spend 10,000$ a month on a game has a problem and someone who's trying to exploit someone's problem in order to become rich is nothing but a thief. The man behind that company should be put behind bars.

      The problem they have is they have too much money and have yet to find e very, very good friend like me, to like, help them find fun and exciting ways to spend it.

    • by Pope (17780)

      It's their money, they can do what they want with it. Plain and simple.

      "The man behind that company should be put behind bars."

      No, he shouldn't.

      • by ackthpt (218170)

        It's their money, they can do what they want with it. Plain and simple.

        "The man behind that company should be put behind bars."

        No, he shouldn't.

        It is morally wrong to let a fool keep his money.

    • by Hentes (2461350)

      I'd love to have the problems of that guy who can afford to spend 10000$ a month on a game.

      • The question is who are these people spending £10K a month? are they people whose "luxuries budget" is to big they just don't see £10K as a lot of money? or are they people who are so hopelessly addicted they are spending money they can't really afford to spend.

  • by interkin3tic (1469267) on Friday February 28, 2014 @03:26PM (#46369687)
    Any time I "buy" all the microtransaction purchases, I feel like I'm cheating. There's no challenge anymore and I usually delete it. Not just games either is the weird part. A paint program for my 2 year old, after he couldn't bring up the "type in your password to buy this thing" screen anymore he was bored of it.

    Perhaps it's just that as a general rule, apps that have microtransactions suck in other ways, and even if you pay nothing for them, it's not worth it.
    • Re:iapcracker (Score:4, Insightful)

      by gstoddart (321705) on Friday February 28, 2014 @03:36PM (#46369825) Homepage

      Any time I "buy" all the microtransaction purchases, I feel like I'm cheating.

      I've found many of the new crop of mobile games are more or less set up that unless you're buying the stuff in the game, you'll never get anywhere.

      I've seen a few games which let you play once or twice/day unless you buy something. I've seen games where it would take an infinite amount of time to earn the things needed in the game.

      I have two tests for a new game I've downloaded:

      1) Put the phone into airplane mode and turn off wifi -- if the game complains it can't connect to a server, uninstall it, because it it can't work on a plane I don't care.

      2) Check if the game immediately starts suggesting you go to their store in order to be useful -- if it looks like you'll never get anywhere without buying the baubles, uninstall it.

      I find many many games seem to be built for the sole purpose of advertising and selling in-game stuff. Which is why I only play games in airplane mode with no connectivity, and something which has caused me to uninstall a lot of them after under 5 minutes.

      It is amazing how many apps which should require no internet connectivity insist on it -- and I'm sure that's not about anything other than trying to get them revenue, which I have no intention of providing them with in the first place.

      • Check if the game immediately starts suggesting you go to their store in order to be useful -- if it looks like you'll never get anywhere without buying the baubles, uninstall it.

        Does half an hour count as "immediately" to you? Because in Doom, a speedrunner has proved [youtube.com] that it takes only 6 minutes and 7 seconds from game start to "You've completed the demo. You can unlock the rest of the game with a one-time payment."

        • Free market, as long as the stuff uninstalls cleanly, I'd say anything is fair.

          I had one "Free" game that started sending me notifications every few days - I don't care if I can tweak my O.S. to filter them, I can also just uninstall the crap.

        • by idontgno (624372)

          Interesting point. Mobile app vendors have re-invented shareware. Yaaaay.

          I had hoped we, as an industry, had gotten past that embarrassing epoch in our history.

        • I think there is a difference between clearly advertising something as a "demo" (and listing the price for the full game upfront)or "first episode free" (and then clearly listing all the remaining episodes upfront with prices) and advertising something as free to play and then slowly extracting the money from the person as they realise they have to pay for important features of the game one by one which is different again from pushing the gamer the gamer into spending real money on in-game consumables.

          • I think there is a difference between clearly advertising something as a "demo" (and listing the price for the full game upfront)or "first episode free" (and then clearly listing all the remaining episodes upfront with prices)

            It'd have to be the latter because the App Store bans the word "demo" [slashdot.org].

      • I released a game for Palm Pilot - it was "donationware" - if you like it, send some money. I got tens, maybe hundreds of thousands of installs over the years, zero donations. (to be fair, I had no way to track play-time.)

        It was listed on PalmGear H.Q. for awhile, the way they listed it implied that you had to cough up $9 to get the download file - wasn't true, but it appeared to be. While I was listed higher up in the rankings, I was selling 10 copies a month. They eventually pushed me down below all t

      • A couple of games have come in for special criticism for the 'optional manditory payment.' Dungeon Keeper mobile slows down in parts to an unplayable pace (according to some - I think it only happens on later levels) without micropayments. The Friendship is Magic game was also heavily criticised for using a similar model, because it was targetted at children. It'd be possible to complete it without paying, but only for the most obcessive basement-dwelling grinder willing to spend months slaving over repetat

    • I play Hill Climb Racing - perhaps a bit too much.

      I have never paid for any of the in-game "points boosts" - it does feel like cheating, gamewise.

      I have considered buying one, just as a "thank you" to the authors - haven't done it yet, but maybe someday...

  • by AltGrendel (175092) <ag-slashdot@@@exit0...us> on Friday February 28, 2014 @03:28PM (#46369709) Homepage
    I consider playing the game without doing in-game purchases part of the game. It's a good challenge and if you work it right, you can use it to teach children about economics. No, I'm not kidding. It's all about allocation of resources and also setting goals and priorities (and sticking to them). You just need to show them how to do it properly in the game.
    • by sandytaru (1158959) on Friday February 28, 2014 @03:46PM (#46369913) Journal
      This is why I had 26 Facebook accounts when I was actively playing Farmville.
      • by idontgno (624372)

        I was going to mock you, until I remembered the reason I have 11 characters in World of Warcraft is mutual support in gathering, crafting, and World of Pokemon. Not because all 11 characters are equally fun, interesting, or enjoyable to play in the main content of the game. "Trade alts", they're called in the parlance. (The presence of a standard name for the phenomenon says everything that needs to be said about its prevalence.)

        So, yeah. It's a pretty common effect. OTOH, I only pay the basic subscription

        • Paradoxically, I'd probably quit if WoW became free-to-play, but limited until you paid

          In that case, you should have got out in mid-2011 when World of Warcraft became free to play up to level 20 [gamespot.com].

          • Honestly, the following list is hardly a reason to quit the game - any starter edition Level 20 can't do squat compared to a normal paying member.

            You can only chat in "say" and "party".
            You can't send whispers (unless the other person has a starter edition also).
            You can't join guilds, trade, invite players into a party.
            You can't use mailbox (in game mail). Real ID or voice chat features.
            You can't participate in pet battles.
            You can't gain more than 10 gold.

            To be honest - the list restricts those play
    • I consider playing the game without doing in-game purchases part of the game.

      So how did you pass the end of "Phobos Anomaly" in Doom? You know, the one where it asks you to buy the rest of the game to continue. My point is that there's a continuum between the shareware model and the abusive wait-barrier IAP seen in My Little Pony and Dungeon Keeper.

      • You are, like, talking of the shareware "demo" version of Doom. The complete game doesn't act like that, and what you say might confuse younger readers that never knew shareware was pretty much the demo version of it. It also made the game famous back in the day, but nobody considered the shareware release to be the actual game of Doom.
        Comparing it to those little time/money suckers is just wrong. You should be ashamed of yourself, I hope cacodemons invade your house and turn the floor into lava or somethin

        • by idontgno (624372)

          If we wanted a Doom analogy for TFA situation, I'd argue it'd be like you can get full DOOM for free, but you have to buy ammo for any weapon above the normal shotgun from the publisher. Say, 50 cents for 150 minigun bullets or 100 plasma rounds or 2 BFG shots or a few rockets.

          Which would suck super, considering how many rockets I had to fire to kill the cyberdemon at the end if Ep 2.

          Dammit. Now I'm going to have to find, dust off, and install my Doom collection CD.

          • Yep, I think that is a correct analogy. Pity Slashdot won't let me rate your comment.

            Doom turned 20 years old in December, so I got quite into it recently, actually making mods and playing the newest ones from the community. I fully recommend doing the same. If you find maps and weapons stale, go grab GZDoom and play it in glorious GL with fancy new modded weapons, system mechanics (the "wrath of cronos" mod is pretty competent as an RPG mod for example), and if you search for Oblige (at sourceforge) and en

          • Dammit. Now I'm going to have to find, dust off, and install my Doom collection CD.

            Be sure to install a modern source port such as ZDoom [zdoom.org] (software rendering) or GZDoom [osnanet.de] (OpenGL). Doom is still fun and playable in 1080p with all the old bugs fixed. Some of the custom levels [doomworld.com] are phenomenal too.

        • You are, like, talking of the shareware "demo" version of Doom.

          I think part of the confusion is that app stores don't let developers say "demo", "trial", or "test" anymore. See section 2.9 of Apple's App Store Review Guidelines from September 2010 [weblogsinc.com]. (I apologize for the outdated information; newer versions are behind a $99 per year paywall.)

          The complete game doesn't act like that

          I'm aware of that. But nowadays, it'd more than likely be implemented on devices with the engine and first episode available without charge and episodes 2-3 (and later 4) as a paid expansion purchased through the platform's in-applic

          • Whoa, I didn't know about such restrictions. What a strange rule. Explains a lot though.

            And yeah, I guess you are right about IAPs. I prefer to avoid games with such systems, and so far I feel like I haven't lost anything of value.

            It's funny, and excuse the storytelling, back in the day I had no problem paying for playtime (arcades), just bringing a handful of quarters and having fun. For some reason, that doesn't feel as right when you aren't inside an arcade. I guess I enjoyed the cabinets being larger th

  • by muffen (321442) on Friday February 28, 2014 @03:33PM (#46369771)
    The problem with in-app purchase is that it is destroying the games. I agree with this article.
    I think the suggestion by the EU, that you cannot label apps with in-app purchases as free, is really good!
    • by wvmarle (1070040)

      Absolutely.

      A while back I got "Cut the Rope", a rather interesting little puzzle game. Three free versions of the game, a few paid ones. I only have the free, ad-supported ones.

      One of them they now have given me 100 candies, and every day can get maybe five more, or you have to buy. My kid likes to play it occasionally, I told him that when the 100 candies are finished (down to 60-something now) the game is going to be uninstalled. I can anyway use the space on my phone :-) And we still have two other episo

  • by Impy the Impiuos Imp (442658) on Friday February 28, 2014 @03:33PM (#46369779) Journal

    "It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else.'"

    Except video game players are more accurately described, than even casino players, as whales.

    • "It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else.'"

      Except video game players are more accurately described, than even casino players, as whales.

      This is what Zynga reported years ago (before the bloom went off their rose) [1] - this entire economy seems ... ripe for abuse as a mechanism for laundering money in my opinion. In Zynga's case, I told one of my friends who worked there that if I was an investor, I'd love to be funneling money to Zynga, while my stock represented 100x the value of whatever I "donated". That's just one use case, it could be used simply to launder money from "users" to "developers" (what if they're both the same) - going t

  • by TiggertheMad (556308) on Friday February 28, 2014 @03:35PM (#46369809) Homepage Journal
    This is kind of an interesting number. I have have found a vast majority of the mobile games to be utter trash, that attempt to cash in on in game purchases while failing to implement a set of solid basic game mechanics. I would gladly drop $30 (or more) just to play a good mobile game that wasn't a poorly concealed slot machine. I wonder if the general shitty state of mobile gaming is causing a disproportionate number of players to not spend cash, or it is just the nature of people being cheap when it comes to 'free' apps. ('I am not going going to spend money on a game that is free', or 'I am not going to pay to win')

    As an aside, the 'Freemium' model is really the scourge of the industry right now, with devs looking for easy ways to extract more money from the player base while providing no real product in return.There are a few people who do it right (WoT, LoL, and TF, for example) and a huge pack of greedy shills who are following in their footsteps.

    A lot of the free to play model games basically let you pay to win, does this 0.15% number line up with the percent of the general population that is incapable of delaying gratification? I bet you could correlate this number with the result of some psychology study on the topic.....
    • A lot of the free to play model games basically let you pay to win, does this 0.15% number line up with the percent of the general population that is incapable of delaying gratification? I bet you could correlate this number with the result of some psychology study on the topic....

      One of the most prolific Freemium vendors is a company called GameInsight, which sounds more like a company performing some kind of study of gamers than a publisher of games. I've been wondering for a while if that's their actua

    • by Pastis (145655)
      As a developer of (quality) paid educative apps for kids, http://dragonboxapp.com/ [dragonboxapp.com] I can tell you that chosing the revenue model is difficult because of the way the app stores work.

      We make learning games that we intend to be as short as possible, for the benefits of the user. Our app model leads to lower ranking due to lower usage (compared to games designed to be addictive) and lower downloads (compared to free apps). We are considering to go towards free + unlockable, so that users can at least preview

  • by galabar (518411) on Friday February 28, 2014 @03:42PM (#46369875)
    I've played games like "Path of Exile" where I've enjoyed the game so much, I decided to drop $20 or so on in-app purchases, even if they weren't going to actually help me advance in the game. I've done the same for other apps that I've enjoyed. If you enjoy the game, it can't hurt to reward the developer. Now, $10,000, well that is a bit extreme.
    • I thought Path of Exile was a well made, if pretty grindy, game. So I wanted to toss the creators 5 or 10 bucks as a thank you. I was shocked at how expensive their items are. Turning your Town Portal from blue to orange was like 12 bucks. Adding a purely cosmetic lightning effect to your weapon was over $20. So they give away thousands of man-hours of work for free, and then ask for massive amounts of money for things that clearly required just a few hours.

      Last week I started playing Loadout, which I

    • "I've played games like "Path of Exile" where I've enjoyed the game so much, I decided to drop $20 or so on in-app purchases,"

      Stop rewarding DRM'd games you never own. Jesus. The game can up and die at any moment it stops being profitable for the developers. If less then 1.5% of the people who play path of exile pay anything what happens when the next big game comes out?

  • 'Games advertised as "free" should not mislead consumers about the true costs involved.'

    My gosh, someone should warn people! When you buy things, it costs money!

    Maybe we should have them issue a warning that "buy one, get one free" isnt actually free: buying one costs you money. How sneaky!

    • by unimacs (597299)
      Well, one problem is that many of these games are targeted at kids. Free should really mean "free", and not "mostly useless until you spend money".

      Computer game makers now have brought on people from the gaming industry (as in gambling) to get better insight on how to hook people. And casinos will target people who've historically spent wads of cash with free rooms, meals, shows, and other perks to get them to come back. They do this knowing in many cases that those people they're targeting have a seriou
  • 0.15% of the players, 50% of the revenue!

  • The truth is, these games are setup to milk money out of a few rare people that have both money and a serious enough mental disability that they're compelled to fall for these immoral tactics. The blatant exploitative behavior of these "Developers" is shameful.

  • If I had an extra $10,000 a month to spend, I'd much rather spend it on vacations with my family than microtransactions in a game. Call me crazy, but $10,000 can buy a pretty incredible vacation (or a series of incredible vacations) with life-long memories. Who's really going to look back 20 years from now on how they got some extra items in some mobile game that likely won't even exist anymore?

    • The kicker is... the guys who's blowing $10K on a game is probably getting some kickass vacations, and probably getting them free too. Rich people comp other rich people all the time.
    • How do you know that person isn't taking $1,000,000 vacations and spending the $10,000 while ON vacation?

      In other words, someone with an extra $10,000 to spend on games probably actually has an extra $1,000,000 to spend on other stuff as well.

  • ... this is just an observation of the pareto principle?
  • ... and the small percentage of feeders are ruining videogames as a whole. It sucks that these people exist, they are fucking up gaming.

  • Here's a conspiracy theory for you: what if all the big spenders are just people buying stuff with stolen cards? Spending $10,000/month makes a lot more sense when it isn't your money. Plus, online purchases don't have the risks. So it seems like a logical place for stolen cards to be used.

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