Wednesday, September 14, 2011

Freemium : $$$ v/s Time

Last week Flurry released an interesting chart on the Freemium games .

As evident, the data suggests that max amount of money (49%) is spent by users in the 25-34 age group. They play only for 29% of the relative time. One possible reason is that this demographic prefers to buy upgrades and special powers to help them cross levels faster. In the same light, the 18-24 years age group spends the max amount of time (32%) but only 16% of the relative revenue comes from them. This is even lower than than the 28% revenue coming from the 35-54 year age group which spends only 14% of the relative time.

While 13-24 year olds constitute more than 50% of the time spent, they contribute only 21% to the revenue. This is an interesting observations for gaming companies. It helps them understand that they can make more money by catering to the in-app purchases of this higher age group (24-54 years).

Flurry had earlier published that consumers spend an average of $14 per transaction when making in-app purchases in freemium games. What items does this money go to? Another interesting chart shows the spending on durable v/s consumable good.

Durable goods are those which can be use to provide permanent benefit in the game play and consumable provide only one time benefit. Personalized are those which are only for a purely decorative purpose. Consumable goods constitute more than 50% of all in-app purchased in freemium games. A majority of this is a towards game currency which can be used in multiple ways within the game.

The data cannot be generalized completely and should be taken with a pinch of salt. Depending on the actual game needs the attractiveness of the durable and goods will change.

The two sets of analysis above are important when trying to decide what in-app purchases to offer and what age groups to cater to. With 65% of all revenue generated among the top 100 games now coming from freemium games these numbers become even more important to understand.

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