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Study: 5% of Mobile Gamers Willing To Spend $50+

Soulskill posted more than 3 years ago | from the fool-and-his-money dept.

Businesses 54

derGoldstein tips a story at AllThingsD about a study into mobile gamers' spending habits: "[The study] provides a fairly compelling argument as to why a developer should continue to give away his or her games for free ... After evaluating the spending habits of 3.5 million consumers across both iOS and Android, Flurry found that among those who pay for in-app transactions, greater than five percent will spend more than $50, which rivals the amount paid at retail for top console and PC games."

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In-Game Purchases (1)

m2vq (2417438) | more than 3 years ago | (#36905412)

It's all about the in-game purchases. Valve has figured it out with TF2, and in a way that doesn't still bring down gameplay for those who choose not to buy items. Korean market was really bad with this, but at least it's done better here. Offer a base game for cheap, and then offer extra if people want it. That way everyone wins - the players who want more will get it, and the companies have more constant revenue stream and reason to create more content.

Re:In-Game Purchases (0)

Anonymous Coward | more than 3 years ago | (#36905422)

It doesn't? Valve have ruined TF2 with their money-grabbing.

Re:In-Game Purchases (0)

Anonymous Coward | more than 3 years ago | (#36905584)

Please expound on the "how".
I agree with m2vq that the purchasable items in TF2 don't ruin the game due the fact that I do just as good without them as the people who appear to be loaded down with them.

Re:In-Game Purchases (1)

LingNoi (1066278) | more than 3 years ago | (#36905660)

Without it TF2 would have died long ago.

Re:In-Game Purchases (1)

rainmouse (1784278) | more than 3 years ago | (#36905756)

It doesn't? Valve have ruined TF2 with their money-grabbing.

Oh no in-game purchases have made the game free, drawn tens of thousands of new players and also paid for the development of continued updates, equipment and maps keeping the game fresh. It's ruined I tell you, ruined!

Re:In-Game Purchases (1)

flimflammer (956759) | more than 3 years ago | (#36905762)

No they didn't. People who chose not to spend any money are not disadvantaged in any way whatsoever. You can make the argument that the game looks ridiculously silly now (in a good or bad way depending on whose opinion it is), but they didn't "ruin" the game. It's still as fun as its always been.

Re:In-Game Purchases (1)

shadowrat (1069614) | more than 3 years ago | (#36907154)

Valve have instituted the best dlc system ever. You are not at any disadvantage if you decide to never purchase anything. In many cases, the new weapons are highly situational and the original loadouts create the most well rounded and useful character. But, what i feel makes it great isn't the great job they've done with balance, it's that even if i choose not to purchase the content, i still get to experience it.

It's deeper than just seeing silly hats. I haven't bought any of the new ray guns, but others have. In doing so, they give me a new experience. I have a new kind of enemy to fight. I have new tactics and counters to learn. Why would someone not want that? It's like other people are buying me a new game. As a bonus, if i just keep playing (and i will because i find it extremely fun) i'll just get the ray guns for free.

Re:In-Game Purchases (1)

m2vq (2417438) | more than 3 years ago | (#36907550)

In addition to that, they were really easy to craft too. You only needed a few existing items for the soldier and a few scrap metals, and if you have played TF2 even some, you should had have those ready already. I crafted mine immediately when they came out.

Re:In-Game Purchases (1)

shadowrat (1069614) | more than 3 years ago | (#36907936)

That's what i heard. Every soldier on my server (TeamFuncom) seems to have them. I haven't even looked at the recipes. Solly is not my class.

Re:In-Game Purchases (1)

mgiuca (1040724) | more than 3 years ago | (#36905452)

Well it did totally ruin the design aesthetic. In the words of Yahtzee [wikia.com] ,

Valve should just have said: "No, you can't wear whatever hat you like. Hands up everyone in this room who hires professional character designers. Oh, just me. Right. So shut up and wear your fucking Akubra."

Re:In-Game Purchases (1)

derGoldstein (1494129) | more than 3 years ago | (#36905622)

Counter-argument here [escapistmagazine.com] . Funny that it's actually from the same site...

Re:In-Game Purchases (1)

mgiuca (1040724) | more than 3 years ago | (#36916130)

Thanks for the link. Very interesting.

Re:In-Game Purchases (4, Insightful)

BasilBrush (643681) | more than 3 years ago | (#36905552)

In game purchases indeed.The "Study" is done by Flurry, an analytics company that market a system for in game currency.

In other news, McDonalds say that 90% of customers are willing to finish off their burger meal with a desert.

Re:In-Game Purchases (2)

RyuuzakiTetsuya (195424) | more than 3 years ago | (#36906202)

Actually if you read the report, it's saying the opposite.

It's like an analyst saying, "5% of your customers will buy this ridiculous upsell, do not shove it in their face. Be reasonable with your expectations with inapp purchases."

Re:In-Game Purchases (0)

Anonymous Coward | more than 3 years ago | (#36908998)

Mmm! Tasty tasty sand!

Re:In-Game Purchases (1)

Inda (580031) | more than 3 years ago | (#36905674)

Hell yeah!

Strip the intros, outros, cut scenes, online play, and music. Compress the living shit out of the textures and sound. Bundle it all up into a lowly 100mb package and give it away.

Call this style a "game rip" and everyone is happy.

If you want the full game, buy it. I know I did ;p

This means (5, Insightful)

Dunbal (464142) | more than 3 years ago | (#36905538)

95% are NOT willing to spend $50.

Re:This means (2)

Pieroxy (222434) | more than 3 years ago | (#36905618)

Yes, but there are a whole lot more "gamers" on mobile phones than gamers in retails shops. So the 5% of gamers willing to pay $50 may very well be the same as the number of people actually paying for games in retail shops.

Re:This means (1)

derGoldstein (1494129) | more than 3 years ago | (#36905646)

Also, developers aren't actively losing money when players use the game for free (and I don't mean "potential" revenue, I mean really bleeding cash). This is not strictly true if the game is an online multiplayer, but at that point the people who play for free often become the game's content. They're also more likely to spread the word and get their friends playing, so it's arguably beneficial to allow people to play for free, even if you're maintaining the servers.

Re:This means (1)

Pieroxy (222434) | more than 3 years ago | (#36905692)

The real point is: Are you better off selling 20 000 units of a $50 games or 2 000 000 units of a $0.5 games? The sheer visibility bonus of the second option alone makes me believe it's a better option.

The revenue is the same. Games requiring online servers need to be more beefed up, but as you pointed out, there is more content with 2M players than with 20K players... so it's for the game benefit.

Re:This means (0)

Anonymous Coward | more than 3 years ago | (#36906804)

Why can't you sell the base game for $0.50 and augment it with microtransactions if you want more? Say... free if you don't mind ads ingame, $0.50 for the same game with no ads, and microtransactions to buy extra bling etc. in game.

That's a model I've seen work very well with PC platformers and free-to-play RPGs.

Re:This means (1)

tripleevenfall (1990004) | more than 3 years ago | (#36907854)

The model of the future - as we've heard EA wants to do with Madden, and presumably all companies would like to do with all games - is that you pay to subscribe, not to own the game.

So you pay $10 a month to play the game, you can't sell it to anyone else when you're done, you're subject to their terms of service AND you make in-game purchases.

The answer, according to the gaming industry's mad revenue scientists, is BOTH.

Re:This means (1)

The Dawn Of Time (2115350) | more than 3 years ago | (#36912148)

And according to the children pirating everything left and right, people deserve to be entertained for free. The tension settles somewhere in the middle, just as it should.

Re:This means (2)

edwdig (47888) | more than 3 years ago | (#36907916)

The real point is: Are you better off selling 20 000 units of a $50 games or 2 000 000 units of a $0.5 games? The sheer visibility bonus of the second option alone makes me believe it's a better option.

Keep in mind that you now have to provide support for 100x the number of users. If you're making a simple iPhone game that doesn't interact with anything else it's probably not a big deal. If you try that on PC, or in a game with a significant online component, you're going to be overwhelmed by the increased support costs.

Re:This means (1)

ewibble (1655195) | more than 3 years ago | (#36912278)

simple solution charge for support, I would not expect to ring up a help desk and speak to a person for a $0.50 game.

Re:This means (1)

edwdig (47888) | more than 3 years ago | (#36914056)

You might not, but enough people do that you'll be impacted. You can do cheaper by having email support. But direct customer support isn't even the big concern - as I said before, think about games that interact with online servers. You need to maintain the servers and make sure they scale to match the userbase. If you're dealing with PC games, there will be compatibility issues you'll have to deal with.

Re:This means (4, Insightful)

hairyfeet (841228) | more than 3 years ago | (#36905770)

Yes but in BOTH cases you are cutting out 95% of your potential audience by being a greedy twat! Look at how when Valve sold L4D for $2 they made more profit than the entire release had made up to that point simply because EVERYBODY bought it. With digital distribution bringing unit costs to zero one can sell at an impulse buy price and rake in mountains of cash, simply by not being greedy twats.

Hell I'll give an example from my own experience: I bought Kane & Lynch II. Why would I do that when one reviewer said "It sucks so much dicks it breathes spunk instead of air"? I bought it because it was $4 and at that price I figured I could easily get more than my money's worth if no other way than laughing at it like a bad movie. And you know what? I didn't feel ripped off, in fact I thought it was worth the money and got my $4 out of it in MP and once I put in the hack that got rid of the stupid censoring of nudity and headshots I felt I got my $4 out of SP too.

If you set the price low enough you can make mountains of cash but the sheer greed of the industry, their "Lets see how much we can bleed these fuckers for!" attitude is frankly cutting off their own noses to spite their faces. Digital distribution opens up a whole new world of profit to game publishers which allows them to have infinite copies for zero added cost. If more would stop being greedy twats and put games at impulse prices, I would say $20 or less for a start and below $10 after 6 months, then frankly they would see their profits skyrocket just as Valve did on L4D as the games would be so popular practically everyone would have it. This not only makes you mountains of money on the game itself but gives you an audience for sequels and other properties which you can make even more mountains of cash off of.

But instead they'll charge $50+ for the game, nickel and dime the living shit out of the player by wanting another $30-$40 to get all the DLC, most of which was ripped from the game, and then when the games sells a pittance compared to projections they'll blame it all on "piracy" instead of accepting the fact that trying to assrape your customers in a dead economy isn't a sound business plan.

Re:This means (2)

Lexical_Scope (578133) | more than 3 years ago | (#36905974)

With digital distribution bringing unit costs to zero one can sell at an impulse buy price and rake in mountains of cash, simply by not being greedy twats.

This.

I probably own 25 games from http://www.gog.com/ [gog.com] and another 15-20 from Steam which I mainly bought because the price was somewhere south of a Big Mac and fried. I probably only played Cannon Fodder for 2 hours or so, but for a couple of dollars I couldn't care less.

I also buy a lot of older PS3 games second-hand, the most recent being Oblivion and Bioshock 1+2 (total cost: £12). I think by comparison the last full-price "AAA" title I bought was probably Half-Life 2.

I generally avoid games that involve microtransactions but I think they are perfectly valid as a business model provided they don't affect game balance. In the words of the bloke from Extra Credit you should allow players to buy convenience, but not power. If I can pay to level faster or get gear more easily, that's good...if I can pay for items or abilities unavailable to free players, that's bad.

Re:This means (1)

Pieroxy (222434) | more than 3 years ago | (#36906030)

No need to get all verbal! Those greedy clueless companies will go belly up soon enough, and others with lower prices will replace them. The market will speak for itself.
If anything, Rovio clearly showed that these guys don't get it at all. They raked up more money with their game than any other company trying higher prices. The change has begun.

Re:This means (1)

TheRaven64 (641858) | more than 3 years ago | (#36906082)

If I log into GOG.com and go to my account, there are now almost a dozen games that I haven't played yet. They were so cheap that I bought them (mostly on half-price sales, so for about $2-3) thinking that I'd probably play them when I had some spare time and wanted entertaining. They're DRM free, so I'm confident that I'll be able to play them in the future, irrespective of what happens to the company - I still occasionally play some DOS games in DOSBox from companies that long since vanished. And, at this price, if I never play them then I've still lost less than the price of a pint of beer.

Re:This means (2)

hairyfeet (841228) | more than 3 years ago | (#36909316)

Nice to see I'm not the only one that does that, makes me think I'm not a dumbass for doing so. I'm up to something like 35 games in GOG right now and I've played MAYBE 12 of those, most for less than an hour if that. Between Amazon, Steam, and GOG I've bought more games in the past 6 months than I had in the ENTIRE 5 years beforehand. Like you thanks to being DRM free I have no worries (I keep all the files on an external 1Tb drive so they are always on hand) and their sales prices as you said are a full game for less than a Big Mac and a coke.

I just don't understand why publishers don't get this. Impulse buying is an incredibly powerful force that will often garner you sales you would have NEVER gotten before. look at me with Kane & Lynch II. Here is a game with absolutely horrible reviews, yet I still whipped on my CC and bought it, why? Because at $4 it was so cheap I couldn't resist and it is THAT effect they need to be shooting for.

All this "Lets see how badly we can fuck our customers LOL!" bullshit just isn't gonna cut it anymore. Frankly in the last 3 years I haven't bought a single game for $50 and I have NO intention of ever doing so again. Why should I, when there are so many games out there I haven't played in the under $20 impulse buy column frankly there aren't enough hours in the day to even play them all.

So stop being greedy twats game publishers and watch the money truck back up to your door. Continue trying to assrape your customers? Well there are plenty of companies happy to take my $5 that I don't need you and I have a feeling the market well show this to be the case. $50 in a dead economy isn't just greedy, its insulting.

Re:This means (1)

The Dawn Of Time (2115350) | more than 3 years ago | (#36912240)

Gah, the hyperbole is ridiculous with you. Calm down on the "fucking" and the "assraping" talk. It's entertainment, not your blood. Whining that it costs too much to have every entertainment option you desire available to you at all times makes you just as much of a "twat" as those you excoriate. Your greed isn't any more moral than theirs.

Re:This means (0)

Anonymous Coward | more than 3 years ago | (#36908036)

What you are talking about is a vertical supply curve in economic terms.

That just is not realistic (at least at first). It costs money to make many games. Look at the credit list on the game then assume (low ball here) 50k per person per year. Most games take 2-3 years to make. Yeah that much.

So the supply curve starts curved but after a 'break even' point the supply curve in effect goes vertical (not totally as there is some cost there per extra unit but close enough). What you are going to see (at first) is a hockey stick like curve. What you see is companies more and more pricing it at about the spot where the curve goes vertical and the slope stops. Now as time moves on the cost to produce moves towards zero. As the sunk cost of the loans is recouped and gone. Now for some games they price even lower but that is because that is where the demand curve crosses the supply curve.

Now the demand curve for a game remains the same or flattens out over time.

So you are going to see more and more people doing the 2 dollar sale after 2-3 years. In some ways it is perfect price discrimination as they can price perfectly for all segments of the market.

This is a rather exciting time for retailers and manufactures. They can get almost perfect data on how to price things to maximize profit (the reason the big companies make games...). So for large segments of the market they may not like it. But there is enough 'rich folk' out there with 'more money than sense' to make the game still wildly profitable. What this means in economic terms is that you may actually loose money if you have too many customers. But with a vertical supply curve the data is a bit different and more like a monopoly.

All games can not be cheap. As not all games are that good. Some games may have an audience of a few thousand people tops. Even if you give it away.

Re:This means (1)

sexconker (1179573) | more than 3 years ago | (#36912398)

Yes, but there are a whole lot more "gamers" on mobile phones than gamers in retails shops. So the 5% of gamers willing to pay $50 may very well be the same as the number of people actually paying for games in retail shops.

Flawed logic right here.
You can't compare demographics like this because the study itself is already filtered to mobile gamers who are willing to spend money - a small subset of the population of mobile users, or mobile gamers.

Re:This means (1)

alen (225700) | more than 3 years ago | (#36905780)

welcome to business in the 21st century. give away or sell at break even o 95% of people and upsell huge margin crap to the rest for the profits.

Re:This means (1)

PopeRatzo (965947) | more than 3 years ago | (#36906234)

95% are NOT willing to spend $50.

Yes, but if you're a company who is in the business of selling games, do you care about 95% who will only pay $0.99 for a game worth fifty cents or the 5% of Apple users who are willing to pay $50.00 for a game worth a buck?

From the summary:

After evaluating the spending habits of 3.5 million consumers across both iOS and Android, Flurry found that among those who pay for in-app transactions, greater than five percent will spend more than $50

Anybody want to bet whether the people who are willing to pay $50 were mostly from the iOS or Android camps?

Re:This means (1)

Custard Horse (1527495) | more than 3 years ago | (#36907194)

Apple does rather have the monopoly for polishing a turd though. And every 9 months they roll it in glitter and sell it to their loyal user-base again.

1. Polish

2. Roll

3. Re-sell

4. Profit

Re:This means (0)

Anonymous Coward | more than 3 years ago | (#36910052)

so the profit is the same as 100% of them spending $2.50

what's the downside again?

Re:This means (0)

Anonymous Coward | more than 3 years ago | (#36920362)

Supply and demand. You don't maximize profit by charging a price that only a small percentage of your customers are willing to pay.

Will Pay for Quality! (1)

greggman (102198) | more than 3 years ago | (#36905564)

I would be happy to pay $20-$30 for Animal Crossing or Zelda Spirit Tracks. Something of that of that quality of design.

As for $50. $50 is a bogus number anyway. Developers only get like 10-15% when they go through publishers.

A $50 game at Gamestop translates to $22 wholesale. If the developer got 15% that means they only get $3.30 a game. They don't need to be selling the game on mobile at $50 to make back their money.

Re:Will Pay for Quality! (1)

geekprime (969454) | more than 3 years ago | (#36905580)

umm,

What makes you think that the publisher gets a cut of in-game sales?

Re:Will Pay for Quality! (1)

ShakaUVM (157947) | more than 3 years ago | (#36905592)

>>What makes you think that the publisher gets a cut of in-game sales?

I think his point was that they do at Gamestop, but not in-app.

*Apple* on the other hand might try to take a cut for in-App Store(tm) purchases.

Re:Will Pay for Quality! (1)

Pieroxy (222434) | more than 3 years ago | (#36905624)

*Apple* on the other hand might try to take a cut for in-App Store(tm) purchases.

They don't try anything. They DO get 30% of all in-app purchases, which is a lot less than the cut in traditional distribution channels.

Re:Will Pay for Quality! (1)

derGoldstein (1494129) | more than 3 years ago | (#36905654)

Apple is the exception to the rule. As they so often are...

Re:Will Pay for Quality! (2)

edwdig (47888) | more than 3 years ago | (#36907822)

A $50 game at Gamestop translates to $22 wholesale. If the developer got 15% that means they only get $3.30 a game. They don't need to be selling the game on mobile at $50 to make back their money.

In an arrangement like that, the publisher is going to be funding development up front. The developer gets a small cut because the publisher is taking the financial risk. Even if that game bombs, the developer received enough money to cover operating expenses for the development cycle.

If the developer is willing to self fund, they can get a much better percent of the sales.

However, (1)

Anonymous Coward | more than 3 years ago | (#36905740)

... there is a +/- 5% margin of error.

5% of gamers maybe. But not even for 5% of games (4, Insightful)

Opportunist (166417) | more than 3 years ago | (#36905966)

Let's be honest here: 99.9something percent of the mobile games are nothing but more or less creative implementation of various flash games available from various flash game sites, mixed with cheap knockoffs and "kinda-sorta-like" versions of well known PC and console games.

50 bucks for that? Dream on!

I honestly wonder if those 5 percent think that 50 bucks would be a sensible price for Angry Birds and ... hell, whatever flavor of tower defense is the game of the month.

Re:5% of gamers maybe. But not even for 5% of game (0)

moonbender (547943) | more than 3 years ago | (#36906780)

Pretty much the same could be said for computer games in general.

Though it's gotten a lot better the past years due to bottom-up innovation.

Willing to is NOT "Will" (1)

MattSausage (940218) | more than 3 years ago | (#36906856)

Just because 5% of gamers are 'willing to' spend 50 bucks on a game, doesn't mean they WILL spend 50 bucks on a mobile game.

Hell, I'd be *willing* to spend $50 on a mobile game if it's good enough. I just cannot conceive of a game now that would be that good... does that put me in the 5%?

Re:Willing to is NOT "Will" (1)

sexconker (1179573) | more than 3 years ago | (#36912460)

They're study found 5% are willing to spend $50 on in-app purchases.

They're study did not find:
5% are willing to spend $50 on a game.
5% are willing to spend $50 on in-app purchases for a single game.
5% are willing to spend $50 on in-app purchases on a regular basis.

free OR $50, no middle ground? (1)

rjejr (921275) | more than 3 years ago | (#36907308)

5% is a statistical error in most polls, so there goes that number.

People, RTFA (2)

gurps_npc (621217) | more than 3 years ago | (#36909154)

The idea behind this article is that, people are willing to pay $50+ in game, IF THE GAME IS FREE TO DOWNLOAD AND USE

In other words, it is a micro-payment scheme. Give the main game away for free (like say Bloons, or Farmville), then charge people for add-ons.

The 95% of people that want the game but won't pay, get what they want. A playable game for free.

The 5% of people willing to pay for extra's, will pay a lot of money for them, far exceeding the small payments they could have gotten if they charged to download/continued use of the game.

Re:People, RTFA (1)

eharvill (991859) | more than 3 years ago | (#36916994)

The idea behind this article is that, people are willing to pay $50+ in game, IF THE GAME IS FREE TO DOWNLOAD AND USE

In other words, it is a micro-payment scheme. Give the main game away for free (like say Bloons, or Farmville), then charge people for add-ons.

The 95% of people that want the game but won't pay, get what they want. A playable game for free.

The 5% of people willing to pay for extra's, will pay a lot of money for them, far exceeding the small payments they could have gotten if they charged to download/continued use of the game.

I wonder if the Smurfs game was included in this study. It is my understanding that people spent hundreds of dollars on this game. They did not "willingly" spend that money however. Must have Smurfberries. [msn.com]

I Won't (1)

used2win32 (531824) | more than 3 years ago | (#36909272)

$50 for a mobile game? On a console I get big screen 1080 HD graphics, surround sound, a real controller, etc. A mobile game offers less - and the games are normally much shorter.

Yes it is nice to take the game with me, but it is not worth that much.

My mobile game budget tops out at $4.99. If there is something I was that costs more, I wait for a sale. There are too many that I download with good intentions, only to be let down by a piece of crap. For 99 cents I can delete the game. If I spent $50 I would be pissed off and would try to play a game I hated because I spent $50 on it. Then I would never buy another from them.

This is a list of the games I have paid the full $50-$60 retail for.
Super Mario Bros 3, Halo, Tony Hawk Pro Skater 4, Halo 2, GTA IV, Uncharted 2, Red Dead Redemption, LA Noire.
All of these games outshine every mobile game I have seen/played. I will add that $20-30 is my console sweet spot.

Keep the price down and I will buy mobile games, move the price up and I will not.

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