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Nicholas Lovell
Home   >   Featured   >   51% of IAP revenue comes from customers spending $20 or more in your game

51% of IAP revenue comes from customers spending $20 or more in your game

By on July 27, 2011

Continuing my analysis of Flurry’s amazing statistics, 31% of revenue generated by in-app purchases for iOS and Android games comes from transaction sizes of over $20.

Look at this chart provided by Flurry:

Flurry chart of IAP spend

It shows a pattern that will be familiar to anyone who has seen my analysis of the revenue of freemium games such as Pocket Frogs or Tiny Towers. In short:

  • Transactions worth under $10 represent 71% of transactions, but only 31% of revenue
  • Transactions of $10-$20 represent 16% of purchase, but 18% of revenue
  • Most importantly, purchases worth over $20 represent 13% of transactions but 51% of revenue
  • (Flurry added that, of the 51% of revenue that came from $20+ transactions, 30% came from $50+ transactions suggesting that 15% of total revenue came from $50+ purchases)

Note that this analysis focuses on transactions, not players. So since players can make multiple purchases, the whales are likely to be even more concentrated than this.

The conclusion (both from Flurry and from me): You have to have a strategy that enables the whales. How can you make an ARPPU of $14 if you don’t offer your biggest fans the ability to spend $50? (Hint: you can’t).

If you make games, check out the rule of 0-1-100. It will help you think about how to make your game appeal to everyone: from those who want to spend nothing on it to those fans who are happy paying bucketloads.

About Nicholas Lovell

As well as founding Gamesbrief, Nicholas is a consultant to the games industry on online and corporate strategy and financial matters. He can be contacted at nicholas@gamesbrief.com Following a decade long financial career in the City of London, Nicholas founded Lodestar Partners, a corporate finance boutique that focused exclusively on the games industry. From 2006 to 2008, Nicholas was CEO of GameShadow, a games website and patching engine. He is a non-executive director of developer nDreams and provides consultancy services to a number of companies including Firefly and Huddle.