A new report reveals an eye opening fact – the tiniest percentage of those playing free-to-play mobile games actually make any in-app purchases at all – and yet some of the best selling games are still turning a very tidy profit.

The mobile monetization report, released by mobile marketing company Swrve, has lifted the lid on just how well relying on in-app purchasing worked in the first month of this year.

In its report, Swrve began with the obvious, pointing out that the mobile games industry had experienced somewhat of a revolution in the past few years. The reason for this is the shift to the ‘freemium’ strategy, in which developers essentially give away their product for free and then rely on users making in-app purchases in order to realize a profit.  

The report found that only 1.5% of players made in-app purchases during January (used to provide a monthly snapshot of the current state of the freemium business model), with on average, $15 (R150) being spent per user. This then effectively subsidized the other 98.5% of the players, who apparently avoid in-app purchases like the plague.

The few paying for the many

According to Swrve, just less than half (49%) of those making payments only made a single purchase in a calendar month.The company also noted that while purchases between $1 and $5 represent a majority (67%) of all purchases, they only contributed 27% of total revenues. High value purchases (those over $50) accounted for a mere 0.7% of the total number of in-app purchases.

Interestingly enough, it appears that developers don’t need very many people to actually buy in (literally and figuratively) to in app purchases in order to make a profit, provided of course, that their game is a hit.  A prime example, is Candy Crush Saga, in which players can purchase extra lives or extra moves for between R8 and R16.

Opportunity or opportunism?

However, not all freemium games are created equal. While some do live up to their name, offering players the ability to enjoy the game without having to pay, others use the freemium model to hobble gameplay and try and force players into parting with their money in order to progress or actually enjoy the game. It is the latter which has earned the ire of mobile players and given the freemium business model a bad name amongst players use to paying once for their title of choice and enjoying their game unhindered.

It is still interesting to see that if the freemium model is employed correctly then indeed, the vast majority of players can still enjoy a good, free game, even as the development of more titles still seems to rest upon the small minority who are willing to indulge in-app transactions.