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Here's how much 'whales' spent so far this year
Here's how much 'whales' spent so far this year
May 23, 2013 | By Mike Rose




The top 1 percent of new players spending money on in-app purchases in mobile and web games account for around 33 percent of total spending, while the top 20 percent of spenders account for just over 90 percent of total mobile and web game spending.

That's according to social game analysis firm Playnomics. The company examined the spending behavior of more than 1.7 million web and mobile game players globally during the first quarter of 2013, and found that around 14,000 players chose to pay for in-app purchases in games -- roughly 0.77 percent.

As the graphs below show, that top 1 percent is also significantly skewed, with spending ranging from around $700 to as much as $7,400 from a single person. The company says that the results resemble "a power law distribution, where a small proportion of whales account for a large portion of total in game spend."

Note that these 1.7 million people surveyed were all "new" social game players -- that is, people who started playing social games within the first two weeks of Q1 -- and therefore as Playnomics points out, "Some of the players in our initial cohort of 1.7 million will likely monetize for the first time after Q1 2013, and some of our existing monetizers will likely keep spending beyond Q1 2013."

Elsewhere in the report, Playnomics found that the average session length per player was around 26.7 minutes, while players completed 5.9 game sessions on average.

playnomics.jpg
Graphs from Playnomics - click to enlarge

And based on the results, players in Turkey have the highest level of engagement, with an average of 45.9 minutes per play session. Players in Japan showed the highest number of player sessions, with 22.5 per person.

The full Quarterly Player Engagement Study for Q1 of 2013 report can be found on the Playnomics website.


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Comments


Ramin Shokrizade
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So the conversion rejection rate for new customers in F2P mobile games is over 99%. If I was an investor in this space, this would give me pause.

Booby K
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Reading carefully, it was new players and it was only after 2 weeks. Which would make some sense. Although someone spending $7,400 seems a bit extreme (could be fraud from a stolen credit card, ...)

Nicholas Lovell
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Why do people jump to the conclusion that these are stolen credit cards? When players log in regularly, play regularly and are part of the community (all hallmarks of whales) perhaps they, well, value the game this much.

Mike Renwick
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Nicholas, because it was new players and 2 weeks. $7,400 in two weeks ... I'd say fraud or lack of understanding of the cost is a very much more reasonable conclusion to jump to than you suggested.

Yan Shen
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To the commenters above, the 7400 was spent over the course of the first 3 months of 2013, not the first 2 weeks.

The study looked at everyone who joined during the first 2 weeks of 2013. Then for those group of users, they followed their monetization behavior through the first 3 months of the year.

But honestly, we have no idea how that person actually spent. Did he spend all $7400 the day he joined? Did he spend a little bit each day over the course of 3 months? etc...

Also, we should keep in mind that the 7400 individual was the highest spending whale after 3 months out of a pool of 1.7 million. Even had it been 7400 spent in 2 weeks as opposed to 3 months, we should keep in mind that someone way out on the tail of LTV isn't really representative of your average consumer.

Rik Spruitenburg
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I'm with Nicholas. They tracked 1.7 million people; not everyone of those is from an income of $50,000 us and has 2 kids and a dog. That $7,400 might be worth less to that person than the $200 the other people dropped was to them. Still, you wouldn't want your spouse finding out.

Jakub Majewski
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Alternatively, it can be a simple case of first-time addiction. You do hear, time and again, about people who go to the casino for the first time, and wind up spending all their money there - not even in multiple sessions, but all at once, because they keep thinking that one more throw of the dice will get it all back. I'm not sure what the compulsion to keep spending would be in this case (since there's no way to get the money back), but it's definitely possible to spend on these games due to addiction.

However, I'm not sure why we should even be talking about this $7,400 case. It's one person out of 1.7 million. In fact, even in the top 1% (a whopping 134 players - again, out of 1.7 million!), more than half spent less than $1000 - and for all we know, "less than $1000" may well mean $50. These are statistical blips, they barely even influence the average (I just tried taking the $7,400 player out of the equation and recalculating the average - it dropped by a whole cent!).

Michael Hartman
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I don't want to brag or anything, but the F2P conversion rate of all our games is over 77%. (Threshold RPG, our 17 year old text mud, is 95%+).

It is hard work, but it isn't rocket science.

Drop the stupid tricks and the desperation to make people pay immediately. We have a simple philosophy that works:

Make the game fun enough that people play long enough, and eventually they buy something.

That has worked for us for almost 20 years of F2P.

Pretend this URL dropping is me dropping the mic: http://www.frogdice.com

Aaron San Filippo
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I'd love to hear more about these games and your methods.

Michael Hartman
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Well, that's our secret sauce so its not something we discuss beyond what I already mentioned above.

Some very smart big game company will offer to buy us some day, and they'll be the ones who benefit from our ~20 years of experience at F2P monetization. The value we will add to their entire library of F2P games will be enormous.

Jakub Majewski
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Michael, so your secret is... to provide a service that people like and appreciate? Why, that's madness! What is the world coming to? ;)

James Yee
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I wonder how well these numbers convert to "stand alone" F2P games like Mechwarrior Online, Neverwinter, and World of Tanks?

Ramin Shokrizade
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I'm going to go out on a limb and say that with F2P, the better your game and the less your monetization model disrupts that gameplay, the more money you make. Thus I would predict that of the three you mentioned that World of Tanks would do best, for reasons I described in my Supremacy Goods microeconomic model a year ago: http://gamasutra.com/view/news/177237/The_new_rules_of_monetizati
on.php#.UEs0NY1lThM

Robert Green
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And yet those 99.23% of people not planning to spent a cent will still complain about in-game advertising.

Michael Joseph
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it's not as if that 99% is a law of nature. they add value for the paying players, and are still potential customers and if they are doing a lot of complaining then devs would be wise to listen.

people will pay if you give them a good value. and a good value starts with being a good game. many f2p games aren't that.

a relationship with customers shouldn't feel like a tug-of-war. it may be old fashioned, but why not treat them like your livelihood depends on them?

Robert Green
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@Michael - "people will pay if you give them a good value. and a good value starts with being a good game"

I would love to believe that, and obviously bad games aren't preferable in any system, but unfortunately the F2P model can separate the quality of a game from the monetisation of it. As such, there are inevitably going to be examples of well-received games that were played and recommended by many, but failed to make money. And while the initial response to that may be, as you say, to ensure you're offering them 'good value', the most successful model on the app store, the one that gets serious money from more than that 1%, seems to be to sell virtual currency (which has no inherent value at all) for use in skipping wait periods or grinding that was only in the game in order to convince that 1% to pay up.
So while I'd like to believe that offering a great product with great value is the way to succeed, the reality suggests the opposite, that you need to intentionally degrade your experience in order to make the big bucks.

Advertising, on the other hand, enables you to get a little bit from a lot more people instead. What this means is that you don't have to rely so much on the spenders, and obviously you still have to make an engaging game. The downside is that the players aren't necessarily aware that you've balanced the game in a less hostile fashion.

Rik Spruitenburg
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Well, it just feels underhanded.

It's different with TV or Youtube. Youtube's never asked me for a dime, or told me to plant more tomatoes if I want to watch move videos. They just run ads. Now here I am playing what is basically a giant ad for micro-transactions and now you want to tell me about how much I could save on my car insurance?

Robert Green
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I'm not sure underhanded is the word you're looking for, because there's nothing nefarious about it.
I hadn't really looked at F2P from the perspective of 'the game itself is an ad for its IAPs', but when you look at the numbers presented above, you start to see a problem with it - namely that 99% of people not only aren't buying your product, they aren't buying anyone else's either, they're essentially jumping from one free sample to the next, and without advertising the only way they're adding any value to the system is through things like word-of-mouth or providing competition in multiplayer.
Which is not to say these people are doing anything immoral themselves, they're simply taking what's on offer (the ones who aren't pirating at least). But hopefully that demonstrates why this situation isn't so easily comparable to other markets.

P.S. Youtube is adding paid subscriptions, so pretty soon they will be asking you for a dime. They just didn't have that option set up before. F2P games certainly aren't the first market to try to monetise customers in multiple ways.

Yan Shen
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To clear up any potential confusion, the Q1 monetization study looked at all new players who joined during a two week window at the start of 2013, then for those players only followed their behavior through the end of Q1 2013.

So you might say that this particular data set yielded a monetization rate of roughly 0.77% after 3 months. Over a longer time horizon, the actual rate of monetization for the sampled users will probably be higher, although most likely not by much.


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