Free-to-play (F2P) has proven to be a lucrative business model for app developers but according to a new report, half of all ad revenue from F2P games comes from just 0.15 percent of players. That's a sobering percentage no matter how you slice it.
These players, sometimes referred to as "whales," are very important for app developers. Often times, the whales are the ones that are responsible for making a game profitable. Profit means developers have the money to fund future games - games that are enjoyed by people that have become accustomed to paying nothing at all for mobile titles.
App marketing firm Swrve tracked some 10 million players and found that the vast majority have never spent any money on free-to-play mobile titles. The only way to monetize those that don't make in-app purchases, then, is with advertising.
Breaking it down further, Swrve CEO Hugh Reynolds explained that only 1.5 percent of those surveyed made a purchase in a F2P game during the month of January. But the good news is that 53 percent of players that do make a purchase go on to make a second purchase within 14 days. Key, then, is making that initial sale.
The executive also warned that traditional in-app marketing methods aren't as effective as they once were. That's because people are very mobile, he said, and they have a lot of options. Trying to capture them is becoming more and more difficult.