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As you move down the funnel, you need to start converting users into payers. Without conversion, you don’t have a business.
The key difference for a free-to-play game, though, is that conversion rates are very low compared to a traditional business model. After all, in a traditional business model, the only people who haven’t paid are the pirates.
Conversion rates vary wildly from game to game and platform. Picking the right conversion rate may be the biggest swing factor in your forecasts. I’ve seen everything from under 1% to around 17% for a free-to-play game. At the Social Games Summit, Joost Van Dreunen, managing director of SuperData, said that a conversion rate of 2-10% is reasonable. Martin Koppell said that on mobile apps, each additional step required between choosing to buy an IAP and actually completing payment reduces conversion by 15%. This makes Android currently harder to monetise than iOS, due to the lack of a comparable streamlined solution for payments.
If you are a start-up, or have an understanding boss, that’s OK. You pick your best estimate (I would suggest 1-5%, depending on the platform) and run with it. When you get your first month’s data, you see how well you are performing against benchmark. Then you tweak and iterate.
If you work for a large organisation, you have a harder time. Organisations are rarely suited to taking risks, and struggle to follow an iterative strategy. Hopefully some of the benchmarks that we give you here will help.
- Superdata puts average conversion rate for US mobile games at 5%, compared to 2.9% for Chinese mobile games. (source: Superdata, May 2014)
- Playnomics cites much lower figures of 0.11% in Asia Pacific to 0.58% in North America. Their figure is “the percentage of all active players who spent at least once during the month” (source: Playnomics, January 2014)
- US has higher ARPPUs, Japan has higher conversion (10-15% on average across the GREE network) — Anil Darni, GREE
- SuperData reports that the average conversion rate across the social games industry increased to 2.5% in 2012, from 1.4% in 2011. (Source: GamesIndustry.biz)
- Trevor McCalmont from W3i says “In most games, 1-2% of users will pay for virtual currency. In healthy games, the conversion rate is closer to 3-6%. Few games can boast a 10% conversion rate or higher, and usually these are games that focus on a niche audience as opposed to mass market.”
- Candy Crush monetises around 8 percent of its total player base. (source: Pocketgamer)
- “40% of shopping sessions happen on mobile, but you have a 75% drop-off before a purchase is made” — Aunkur Arya, Braintree, speaking at MobileBeat about e-commerce generally rather than just games.
- Tiny Tower: 3.8% (number of unique lifetime payers divided by the number of unique lifetime paid players over the first six weeks of the game. Source: Gamesbrief)
- Tiny Tower: 5% (source: Pocketgamer)
- ngMoco: 2.0% (2% of DAUs spend every day, sourced from a presentation/handout at GDC 2010)
- naturalmotion: 2.0% (“We’re tracking above that. I can’t give you the exact numbers but we’re tracking pretty high overall at the moment.” Source: Pocketgamer)
- Jetpack Joyride, Halfbrick: 5-10% (Source: gamasutra, 8/2/12. We think that this is lifetime, not monthly conversion.)
- GREE: 14% (Source: Wall Street Journal, via iesherpa, 6/15/12)
- DeNA: 13% (Source: Wall Street Journal, via iesherpa, 6/15/12)
- Temple Run, Imangi Studios: 1% (Source: Gamesbrief. We think that this is lifetime, not monthly conversion.)
- Ski Champion, Majaka: 0.1% lifetime conversion (Source: Majaka, 6/8/12)
- Hashi Puzzles, Frozax: 5-6% after first 3000 downloads, based on unit sales/downloads (Source: Frozax, 17/01/13)
- 4.46% of Pixel This players spend money. (source: Twitter, 8/10/2013)
- Papaya engine: 20% (Source: Inside Mobile Apps)
- Hashi Puzzles, Frozax: 2-3% after first 3000 downloads ( based on unit sales/downloads, Source: Frozax, 17/01/13)
- Stardom, Glu Mobile: 3.9% (Source: Pocketgamer, 9/8/12)
- Deer Hunter, Glu Mobile: 3.4% (Source: Pocketgamer, 9/8/12)
- Junkies, Glu Mobile: 1% (Source: Pocketgamer, 9/8/12)
- Gun Bros, Glu Mobile: 1.2% (Source: Pocketgamer, 9/8/12)
- Frontline Commando, Glu Mobile: 1% (Source: Pocketgamer, 9/8/12)
- Contract Killer, Glu Mobile: 0.6% (Source: Pocketgamer, 9/8/12)
- CSI: 5% (claimed at MGEITF. Possibly flippant, and the Alex Farber’s comment ignores the importance of whales and true fans)
- Speaking at GDC 2012, Giordano Bruno Contestabile of Popcap said that for Bejeweled, conversion rates are more than twice as high for iOS as Facebook.
- Dennis Ryan of Popcap also said this at Login 2012.
- Kixeye: 7-10% (Lifetime. Source: Venturebeat)
- Zynga: 1.2% (Perhaps individual games rather than whole network. Source: Wall Street Journal, via iesherpa, 6/15/12)
- Zynga: 4.4% (Derived from MUUs/MUPs. Source: investor.zynga.com)
- Battlefield Heroes, EA: 3.9%
- Hattrick, 14% (Source: paidcontent.org)
- Tribes Ascend: 10% conversion rate (source: Gamasutra, July 2013)
- Team Fortress: 20-30% (probably lifetime), according to Gabe Newell in a must-read Geekwire interview.
- ATB, Reloaded: 7%, but their target is 10% according to Bjorn Book-Larsson speaking at GDC 2012
- World of Tanks, Wargaming.net: 30% (probably lifetime) (source: Edge)
- AI War, Arcen Games: 15% lifetime conversion (source: Cliffski’s blog comments)
- Autoclub Revolution, Eutechnyx: 9% lifetime conversion (source: The A List, 6/28/12)