Every time you want to download an app onto your smartphone, you’re left with a decision. Should you download the paid app or the free to play games? Let’s say you choose the free app, but then there are some in-app purchases available to enhance your gaming experience. You pay 99 cents here and there, but before you know it, those transactions have added up. Should you have just downloaded the paid game for $2.99 in the beginning? Over time, which costs more?
Free to Play Games with In-App Purchases
Free games sound like the best option when you’re considering a new download, right? Just over 5% of app users, out of 1,000 users in a study, spend money on in-app purchases. This may not sound like a lot, but when you consider how much the average user is spending on a monthly basis, it’s pretty astronomical.
On a larger scale, 95% of iOS users and 98% of Android users download these ‘freemium’ games. The average person who uses free smartphone games with in-app purchases spends 20 times more money on their games than someone who downloads a paid game.
These users spend an average of 50 cents per purchases, adding up to an average of $9.60 per month on their in-app purchases.
The download of games with in-app purchases is forecasted to contribute to 48% of all app downloads by the end of this year. By 2020, researchers expect that these games will account for roughly 20% of all revenue on iTunes.
Paid Games
Paid games are apps that you can find on your operating systems respective market that cost a one-time fee. Due to their one-time cost, these Paid Games generate more initial revenue than a free app with in-app purchases.
Most of the issues consumers have with paid games, however, is the inability to try it out before they purchase it. Google and Apple have responded to this by enabling previews of how the game works, giving the consumer a 30-60 second experience prior to downloading it.
According to a recent survey, there is still a niche of ‘avid gamers’ that still prefer paid games over their free competitors. According to these gamers, they find that the graphics can be more intense, and there is more support for the game.
Paid games account for roughly 50% of total game downloads, even though games with in-app purchases generate more revenue overall.
Future of Mobile Gaming
In the aforementioned survey from April to May 2016, 100 million users were studied. The survey saw 30 million purchases over just 1,000 apps.
With this data, we can conclude that free games with in-app purchases aren’t going anywhere soon. While paid games do generate revenue for their developers, most people are more inclined to continue paying more for in-app purchases over time.
This is opening an entire new market in gaming and app development. By end of 2017, paid apps are expected to generate $29 billion worldwide. While this is a lot of revenue, in-app purchases won’t be outdone. In-app purchases are expected to generate a staggering $37 billion.
