In the early stages of the mobile gaming explosion, every publisher hunted whales. Only a tiny fraction of gamers actually paid for in-app goodies, and while minnows were OK for ad revenue, big spenders -- the whales -- drove success.
Over the past three years, the number of game players who actually pay rose by a third, game monetization platform DeltaDNA says. That's a massive difference, even though the overall percentage is still very low: 4% in North America, and 2.5% in Europe. And that's translated to increases of 200% in revenue for strategy games and 42% for casino games.
But the paying percentage is the real news.
Whales drove game development, and are still important. I have personally spoken to a game publisher who had a whale on her platform that had cumulatively spent over $1 million on her casual mobile game.
Money like that talks.
But if mobile publishers can increase the percentage of payers from 1% to 4%, or from 4% to 10%, greater rewards are available.
And, less vulnerability to a big spender leaving.
"Developers are now far less reliant on 'whales' as more players choose to spend money in-game," DeltaDNA's Jon Watts recently posted. "Where [free-to-play] games used to rely on a small percentage of whales or power spenders to drive the majority of the revenue, games now have a much greater number of casual spenders alongside the whales and this is creating much more balanced monetization.
Part of the rationale is likely the increasing quality of free-to-play games.
Take Fortnite: many play it on 50" TVs via console, and the graphics, gameplay, and rich social interaction allow the game to not look out of place. Another factor is likely the social nature of games: when your friends are playing with you, you're more likely to want that special skin or boost pack that allows you to look great and perform better.
The study does caution that overall spend per player has fallen slightly. On iOS, average life-time value is now $29.07, down 6.6%, and on Android LTV is $24.37, down 17.7%.
I think what might be happening there, however, is that payments are happening off-platform.
On the one hand, some payments are happening off mobile platforms and on console: PlayStation, for example, for Fortnite. On the other hand, hugely successful games like Fortnite are moving off official app stores, like Google Play, in order to process payments on their own and save the 30% platform tax that Apple and Google charge.
(Platforms, beware: you may have to scale your payments with success of games, and decrease your percentages as games pull in hundreds of millions or billions per year.)
Overall, however, broadening the population of players who pay is only going to help mobile game publishers.
"As spending in F2P games slowly becomes less stigmatized and more developers offer great premium experiences rather than relying on blockers, pinch points and free-to-start type models, I believe this trend will only continue," says DeltaDNA CEO Mark Robinson.