'Freemium' Mobile Gamers Spend An Average of $14 Per Transaction

By Tracey E. Schelmetic July 28, 2011

Have you ever played a “freemium” game on your Apple iPhone or Android-based smart phone? You know...one of those games that is initially free to play, but if you want to actually progress through the game’s levels, you need to buy things: tokens, weapons or Smurfberries, depending on your age and gaming preferences.

While it may sound a bit daft to those who don’t play, it turns out the average “freemium” mobile phone gamer splashes out about $14 per transaction on these games. That’s a lot of dough for the game developers and the mobile marketplaces, who take a cut of consumers’ in-game purchases.

Jeferson Valaderes of the blog Flurry writes that these “retail portable games” are seriously challenging more established gaming platforms like Nintendo DS and Sony PSP. (Something that appears to be irritating the pants off Nintendo CEO Satoru Iwata, who has referred to smartphone games as “worthless” and accused the mobile games app industry of “boring consumers.”)

Iwata’s protests aside, Flurry has measured that iOS’s and Android’s revenue share of the U.S. portable game software category rose to 34 percent in 2010: up from just one percent in 2008.

And it would appear that mobile gamers prefer the “freemium” model rather than paying for apps and playing for free within them. Flurry, pulling data from 75,000 apps and 3.5 million smartphone owners, discovered that fully 65 percent of mobile gaming revenue can be attributed to freemium games, while only 35 percent comes from gaming apps that users pay to download.

So who are these people paying an average of $14 per transaction inside a video game on their phone? Probably the guy sitting next to you on the train into work. But even more shocking is that five percent of people who make in-game purchases inside freemium games spend more than $50 per transaction.

That’s a lot of virtual body armor.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Tracey Schelmetic is a contributing editor for TechZone360. To read more of Tracey's articles, please visit her columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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