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The Whales: 33% of total in game spending for mobile and web games is done by the top 1% of new play

Here is some data by Playnomics based on mobile & webgames not necessarily MMORPGs.  And there were some interesting stats that most of us probably knew, but it sheds some light on how much the "whales" carry the F2P/B2P industry:

The top 1 percent of new players spending money on in-app purchases in mobile and web games account for around 33 percent of total spending, while the top 20 percent of spenders account for just over 90 percent of total mobile and web game spending.

That's according to social game analysis firm Playnomics. The company examined the spending behavior of more than 1.7 million web and mobile game players globally during the first quarter of 2013, and found that around 14,000 players chose to pay for in-app purchases in games -- roughly 0.77 percent.

http://www.gamasutra.com/view/news/192899/Heres_how_much_whales_spent_so_far_this_year.php

http://www.playnomics.com/q1-playnomics-quarterly-report/

So what this shows is that in these types of games only about 1% of players spend money in games.  Within that 1%, the top 20% represent 90% of spending.

Do you think this data is similar to how it is in F2P MMOs in terms of a % breakout?  If so, are we going to see a market were developers start catering to these niche but influential segment?  Or are they already doing that?

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Comments

  • nariusseldonnariusseldon Member EpicPosts: 27,775
    LOL .. i just posted the same news. I guess we saw it about the same time.
  • LivnthedreamLivnthedream Member Posts: 555
    Originally posted by SoMuchMass

    So what this shows is that in these types of games only about 1% of players spend money in games.  Within that 1%, the top 20% represent 90% of spending.

    That is not what your figures just stated. Top 20% makes up 90% of total spending, with the top 1% making up 1/3 of that.

    Do you think this data is similar to how it is in F2P MMOs in terms of a % breakout?  If so, are we going to see a market were developers start catering to these niche but influential segment?  Or are they already doing that?

    Yes, the numbers have been stated in the past to be similar, and I see no problem with it. Your question is like saying developers are going to start listening and making changes based entirely on what this forum says (the percents are pretty similar). Companies have found that there are players who are willing to subsidize there fellows in different ways, why would they not use that to their advantage. It meets all of the goals they have as a business and a company.

  • VengeSunsoarVengeSunsoar Member EpicPosts: 6,601
    Originally posted by Livnthedream
    Originally posted by SoMuchMass

    So what this shows is that in these types of games only about 1% of players spend money in games.  Within that 1%, the top 20% represent 90% of spending.

    That is not what your figures just stated. Top 20% makes up 90% of total spending, with the top 1% making up 1/3 of that.

    Do you think this data is similar to how it is in F2P MMOs in terms of a % breakout?  If so, are we going to see a market were developers start catering to these niche but influential segment?  Or are they already doing that?

    Yes, the numbers have been stated in the past to be similar, and I see no problem with it. Your question is like saying developers are going to start listening and making changes based entirely on what this forum says (the percents are pretty similar). Companies have found that there are players who are willing to subsidize there fellows in different ways, why would they not use that to their advantage. It meets all of the goals they have as a business and a company.

    actually it's less than 1% that bought anything.  1.7 million players, 14,000 bought something = less than 1%.  Of that 1% that bought something, 90% of the revenue comes from the top 20% (of that one percent), and 33% of the revenue comes from the top 1%

    Just because you don't like it doesn't mean it is bad.
  • SoMuchMassSoMuchMass Member Posts: 548
    Originally posted by Livnthedream
    Originally posted by SoMuchMass

    So what this shows is that in these types of games only about 1% of players spend money in games.  Within that 1%, the top 20% represent 90% of spending.

    That is not what your figures just stated. Top 20% makes up 90% of total spending, with the top 1% making up 1/3 of that.

    I don't think what I said is false, correct me again if I am wrong.  Here is how I read it.

    • Base (All Players) = 100%
    • People that Spend money in game = ~1% (.8%)
    • Out of people that spend money in game (1%), the top 20% make up 90% of spending.  And the 1% of the 1% make up 33%.
  • VengeSunsoarVengeSunsoar Member EpicPosts: 6,601

    Data aside I think there are actually a few more people paying in MMO than 1%.  Of those that pay something I bet the 1% making up a third of the revenue and 20% making up 90% is probably fairly accurate.

    No real numbers to go on, just my gut and sense of the market for whatever that's worth. 

    Just because you don't like it doesn't mean it is bad.
  • ScotScot Member LegendaryPosts: 19,972

    Didn't we just see a study in another thread showing that about 50% of players in F2P MMO's pay into them? It was a small amount but about 50% were chipping in.

    We are having a discussion in another thread about how reliable MMO data studies are, perhaps you can see now why some of us take all this with a pinch of salt? Here they seem to have lumped all web games in with all mobile games, so is that saying MMO players put in more? Even taking into account the fact they widened the data sample to all online games, 50% down to 1% is a huge difference, these studies are questionable.

  • VengeSunsoarVengeSunsoar Member EpicPosts: 6,601
    In all fairness the article was not specifically addressing MMO's though - that could account for the difference.
    Just because you don't like it doesn't mean it is bad.
  • LivnthedreamLivnthedream Member Posts: 555
    Originally posted by SoMuchMass

    I don't think what I said is false, correct me again if I am wrong.  Here is how I read it.

    • Base (All Players) = 100%
    • People that Spend money in game = ~1% (.8%)
    • Out of people that spend money in game (1%), the top 20% make up 90% of spending.  And the 1% of the 1% make up 33%.

    Fair enough, I misread it. What I stated (the way I read it) falls into similar line with previous data. The data provided there is a subset of a subset, and is clearly skewed. We already know that generally speaking the top 10% of your playerbase pay for everyone in a f2p game.

  • ScotScot Member LegendaryPosts: 19,972
    Originally posted by VengeSunsoar
    In all fairness the article was not specifically addressing MMO's though - that could account for the difference.

    I clicked Post to soon and have amended.

  • reeereeereeereee Member UncommonPosts: 1,636

    Ah whales...  I still remember my first time finding out that people were dropping over $10k in the PWI cash shop.

     

    With f2p games just analyzing raw account numbers doesn't do much though because of people who make an account, log in, and play for 10 minutes to a few hours and never come back.  I know I've done that on a -lot- of f2p games. 

     

    The only game that I know that's given some indication of numbers is SWTOR with their slightly less than 500k subs and 1.7 million new f2p accounts which would at a bare minimum mean well over 1% of accounts are paying something.

     

    One of the problems whales have given rise to, is that they're just so damn tasty no one who is accountable to shareholders can pass up tapping into them.  I've got to think that's a big part of part of why Wildstar is talking about hybrid model.

  • Gaia_HunterGaia_Hunter Member UncommonPosts: 3,066
    So basically when people that dislike f2p come and talk that in fact someone will have to pay much more to play are in fact wrong since the large majority doesn't pay anything.

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  • RamanadjinnRamanadjinn Member UncommonPosts: 1,365

    This sort of thing has been known a long time, and there has been a lot of research done on it.

    http://en.wikipedia.org/wiki/Pareto_principle

    This is why I have never advocated the sentiment where "my demographic is the largest so you guys should cater to us."

    The world can be a little more complicated than that.

     

  • KenFisherKenFisher Member UncommonPosts: 5,035

    The part that surprises me is the 0.77% as spenders.  I would have expected something like 2.5%.

     

    My guess would be that this is due to the "uninstall after creating an account" syndrome.  A non-player isn't going to spend money.  I know I have accounts on games that I played less than 5 minutes total.

     


    Ken Fisher - Semi retired old fart Network Administrator, now working in Network Security.  I don't Forum PVP.  If you feel I've attacked you, it was probably by accident.  When I don't understand, I ask.  Such is not intended as criticism.
  • SulaaSulaa Member UncommonPosts: 1,329
    Originally posted by VengeSunsoar

    Data aside I think there are actually a few more people paying in MMO than 1%.  Of those that pay something I bet the 1% making up a third of the revenue and 20% making up 90% is probably fairly accurate.

    No real numbers to go on, just my gut and sense of the market for whatever that's worth. 

    Confusion comes from how total player number are counted. 

    Big number of players make account, play game for few hours or few days and never come back.  Yet they are counted towards those 90%+ of players than don't pay even one cent.  

    If you did create some account to some f2p game long ago, you don't even remember password and don't give a sh*t about it anymore - you're still counted toward game statistics.

    So it's actually much more than 1% of actively playing players.  

    Lies, bigger lies and statistics ;p

  • SoMuchMassSoMuchMass Member Posts: 548
    Originally posted by ZombieKen

    The part that surprises me is the 0.77% as spenders.  I would have expected something like 2.5%.

     

    My guess would be that this is due to the "uninstall after creating an account" syndrome.  A non-player isn't going to spend money.  I know I have accounts on games that I played less than 5 minutes total.

     

     

    Originally posted by Sulaa

    Confusion comes from how total player number are counted. 

    Big number of players make account, play game for few hours or few days and never come back.  Yet they are counted towards those 90%+ of players than don't pay even one cent.  

    If you did create some account to some f2p game long ago, you don't even remember password and don't give a sh*t about it anymore - you're still counted toward game statistics.

    So it's actually much more than 1% of actively playing players.  

    Lies, bigger lies and statistics ;p

    It does seem like the % is extremely small, even if you look at the presentation by Ben Cousins about EA's Battlefield Heros, the "% of actives spending" was 1.29%.

    http://www.slideshare.net/bcousins/paying-to-win

    Here they use the term "actives". The study in the the study I posted and the one I just linked used "actives" so I don't think they are using "non-active" players.

    It is important to also note that when games like SWTOR state they have "2 million players" they are counting users that just created an account and don't care anymore either.  So the stat is still relevant, regardless.

  • ScotScot Member LegendaryPosts: 19,972
    Originally posted by Gaia_Hunter
    So basically when people that dislike f2p come and talk that in fact someone will have to pay much more to play are in fact wrong since the large majority doesn't pay anything.

    As I mentioned a study on another thread showed about half of the player base in F2P MMO's were paying something, a small amount for most.

  • LoktofeitLoktofeit Member RarePosts: 14,247
    Originally posted by Sulaa

    Confusion comes from how total player number are counted. 

    Big number of players make account, play game for few hours or few days and never come back.  Yet they are counted towards those 90%+ of players than don't pay even one cent.  

    If you did create some account to some f2p game long ago, you don't even remember password and don't give a sh*t about it anymore - you're still counted toward game statistics.

    So it's actually much more than 1% of actively playing players.  

    Lies, bigger lies and statistics ;p

    That's not how we do the numbers, though. Ther percentages come from using the Monthly Active Users (MAU), not total accounts ever created. Here's a link that explains how that math is done:

    http://www.playerize.com/blog/sticky-games-relationship-between-mau-dau-and-arpu

     

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  • VolkonVolkon Member UncommonPosts: 3,748

    They're talking two distinct groups.

     

    The top 1 percent of new players spending money on in-app purchases in mobile and web games account for around 33 percent of total spending, while the top 20 percent of spenders account for just over 90 percent of total mobile and web game spending.

     

    The first group is the top 1% of new players spending money. They account for about 33% of total spending in a game. New players. 

     

    Second group is the top 20% of ALL spenders (including the new players spending). The top 20% of ALL spenders account for over 90% of total spending.

     

     

    Takeaway: New players, when they spend money, are the most zealous at it. They tend to be the ones gobbling up the bank tabs, character slots, etc. Overall, 20% of the community accounts for the vast majority of spending. The bottom 80% account for less than 10% of spending.

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  • AIMonsterAIMonster Member UncommonPosts: 2,059

    I'd actually assume the figures are a bit different depending on the game.  A Zynga game for example with extremely heavy P2W elements would have much larger % funding from whales, while a game that doesn't rely so heavily on a P2W element would have a smaller amount of funding from whales.  Games more reliant on P2W element should have a smaller amount of people paying for the game too.  A game like League of Legends for example seems to have a higher percentage of paying players than 1% (in my experience it should be closer to 10% possibly even as high as 20%) and much more players who wouldn't be classified as whales spending say $5-10 in the cash shop at a time, and not frequently as opposed to the smaller amount of whales who buy a large amounts of skins and champions with RP frequently.  I also think the mobile market tends to differ greatly from the F2P MMO market in that smaller IAP purchases (~$1-$3) are easier to shallow for many players than purchases from MMOs which tend to be a bit higher in the $5-$10 range, plus the mobile/web market tends to limit time you can actually play games without IAP through the "energy" P2W mechanic while a F2P MMO doesn't, further promoting the P2W aspect and making it more whale centric.

    I also think a more "expensive" cash shop will make casual spenders (non-whales) less likely to spend money at all and thus the percentage will be much higher on the amount whales are actually funding the game.  A game with both an expensive cash shop and extremely heavy P2W elements could possibly have whales funding the majority of the game, as much as the 90% from the top 1% instead of just the top 20%.

    I'm wondering what games or set of games (or other source) they got their data from.  Didn't have time to read through the whole report, so if that's stated that would be interesting to note.  I'd personally love to see a comparison from say a Gpotato game, a PWE game (particularly Neverwinter), League of Legend's Cash Shop, and a sub or B2P cash shop like Guild Wars 2 or Everquest 2.  Guess that's probably not going to happen.

    So in my opinion the data will differ for F2P MMOs.  I think it will always be based on games and how much of a P2W element they have, but I'd assume a typical F2P MMO will have a higher percentage of paying players and less reliance on whales than a mobile or web game.

  • kedarakedara Member UncommonPosts: 72

    Trends that I've noticed myself tend to advocate the initial figures. There are very few people paying to play and of those few only a handful buy all of the items in the shops. The numbers tend to stay persistent throughout and having played the majority of F2P P2W games on the market, I would agree with the "1% spend" findings. Clothing and vanity seem to have as much of an effect as P2W items in regards to spending as well.

     

    The examples people use of P2P games going F2P are very good examples of skewed market views. There are people paying for the game at a regular pace, still occupying a small percentage of the market. These numbers typically decrease over time while certain players introduce large sums of cash to gain all of the advantages available.

    Also, all games that allow players to spend money for an advantage of any kind, be it a boost or a distraction...I mean fancy clothes, is still using a pay to win structure. Don't be fooled by the wording that these companies use, if there wasn't a competitive edge to the cash shop, then there would be no reason to have one as no one would buy anything.

    Looking better and leveling faster are just two more ways of winning.

  • Lord.BachusLord.Bachus Member RarePosts: 9,686
    You cant compare spendings in a free mobile app to spendings in a free to play MMO.

    Best MMO experiences : EQ(PvE), DAoC(PvP), WoW(total package) LOTRO (worldfeel) GW2 (Artstyle and animations and worlddesign) SWTOR (Story immersion) TSW (story) ESO (character advancement)

  • kakasakikakasaki Member UncommonPosts: 1,205
    Originally posted by Lord.Bachus
    You cant compare spendings in a free mobile app to spendings in a free to play MMO.

    Yes you can, the concept is the same.  Look, you guys are getting stuck on specific percentage numbers. The big picture is, regardless of the specific number, in a cash-shop F2P game, the majority of the revenue comes from a small percentage of the player base. Game companies know this and in fact count on it. Right, wrong? Neither. It is a business model that seem to work for the industry and they are running with it.

     

    As to the "people" (got to avoid another warning) that keep whining and moaning about free-loaders: get a grip. If the companies want to use a F2P cash shop model for their products, then why are players complaining? it's not like the people paying aren't receiving a benefit. How does some people not paying a cent to play affect you in any way? 

    A man is his own easiest dupe, for what he wishes to be true he generally believes to be true...

  • IcewhiteIcewhite Member Posts: 6,403
    Originally posted by SoMuchMass

    So what this shows is that in these types of games only about 1% of players spend money in games.  Within that 1%, the top 20% represent 90% of spending.

    Do you think this data is similar to how it is in F2P MMOs in terms of a % breakout?

    Probably in the same general neighborhood.

    MMO players (arguably) would tend to develop stronger attachments to their games or characters over time (thus more 'whales' to divide the load).

    But if you speculate, someone's bound to tell you how 'ur rong" you are, so ... yeah, forget I fell for the snare.

    Self-pity imprisons us in the walls of our own self-absorption. The whole world shrinks down to the size of our problem, and the more we dwell on it, the smaller we are and the larger the problem seems to grow.

  • waynejr2waynejr2 Member EpicPosts: 7,768
    Originally posted by Scot

    Didn't we just see a study in another thread showing that about 50% of players in F2P MMO's pay into them? It was a small amount but about 50% were chipping in.

    We are having a discussion in another thread about how reliable MMO data studies are, perhaps you can see now why some of us take all this with a pinch of salt? Here they seem to have lumped all web games in with all mobile games, so is that saying MMO players put in more? Even taking into account the fact they widened the data sample to all online games, 50% down to 1% is a huge difference, these studies are questionable.

     So by your logic you are saying that if the whales stopped paying these games would still generate a healthy income?

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  • TamanousTamanous Member RarePosts: 3,025

    This isn't news. This is the model and it is well known.

     

    This is the basis of the complaint for f2p in mmos. It isn't designed to target the veteran players who stick around and form a community.

     

    A f2p game will ALWAYS be a rotating door for players and community will never be nurtured through content focus or content access. F2p kills what sustains mmos ... it may work for other games but for mmos it is the killer of communities and you only have to look to every single mmo that converted to f2p unless it was a soft hybrid approach designed to keep veteran players. At best you see a surge in money and then you get games like SWTOR where success is based on how many trinkets sell in the cash shop over content built around keeping community based players on board. Guilds form and dismantle in mmos now faster than ever before. The reasons for even forming guilds are slowly vanishing.

     

    The mmo industry WILL be forced to address this issue once they finally come to terms with the fact they completely dismantle existing communities or stop them from ever forming. Is it a model that makes money? Yes. Is it an optimal model for sustaining a long running mmo? Nope.

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