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Spend once, spend twice, 25% of you will spend thrice

By on March 29, 2011
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I’m not sure how I missed this, but thanks to Diane LaGrange of Ico Partners for bringing it to my attention in a recent blog post on the price of commitment.

Social Gold, the virtual goods monetisation business owned by Google, has published an infographic on the behaviour of gamers within the social and online games operated by their clients. The chart is useful overall, not least for pointing out that the “average” social gamer spends $60. (Although, given that whales spend over $1,000 on a single game, this average can be very misleading – this is a power-law distribution, not a normal distribution).

It also confirms the logic behind my basic rule of free-to-play: the 0-1-100 rule. In essence, once you get a player to spend a dollar, 56% of them come back to spend a second time and 25% of them spend three or more times.

If that’s not a good reason to get them to spend once, I don’t know what is.

Social Gold infographic

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
  • The other factor here is volume. It might not appear great that only 25% of customers buy 3 or more times, but if it is 25% of 1m people, it can certainly add up.

  • Hi Nicholas, thanks for the link! Would love to have their median in addition to the average. Social Gold had another nice infographic about paying players segmentation : http://blog.jambool.com/index.php/2010/06/21/it%E2%80%99s-good-to-be-king-%E2%80%93-social-games-monetization-by-user-segment-part-1-of-2/
    I hope they’ll continue giving useful stats even now they’ve been bought by Google.

  • I think it would be more fair to say that they didn’t share it in this infographic. It is a very different stat after all

  • “In other words, this stat is about getting users engaged with a single game. If someone doesn’t keep spending on your game, can you introduce them to a different game of yours that they do like? Can you introduce them to a game of someone else’s and get a referral fee.”

    Social Gold must know whether that happens and they’re not sharing the answer… 😀

  • I sort of agree. But iTunes is a platform, not a band.
    In other words, this stat is about getting users engaged with a single game. If someone doesn’t keep spending on your game, can you introduce them to a different game of yours that they do like? Can you introduce them to a game of someone else’s and get a referral fee.

    In other words, if you made a one-off product, you would only ever have a chance of one payment. Here you have a chance of more payments, and future cross-promotion.

    So I take your point, but I don’t think it’s as bleak as you suggest.

  • Looking at it the other way, this is not such good news.

    75% of the people you persuade to spend once will NEVER spend a third time. For 44%, one payment is all you’re getting. To me that sounds pretty poor. It suggests that most customers don’t find their in game purchases especially compelling.

    What % of iTunes purchasers do you think end up making 3 or more purchases? Much more than 25% I’ll bet.