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Oh, you’ve spent a couple dollars on Candy Crush? How cute.
In a mobile monetization report released today, app testing firm Swrve found that in January, half of free-to-play games’ in-app purchases came from 0.15 percent of players. Only 1.5 percent of players of games in the Swrve network spent any money at all.
The latter finding is in line with what the advocates of free-to-play have been saying for years: Players don’t have to pay anything to enjoy the game. But the former stat underscores the importance of big spenders, or “whales” in industry lingo, to the app ecosystem.
Broken out as a percentage of only players who pay anything at all, Swrve’s report still points to whales. As the chart below shows, the top 10 percent of that 1.5 percent of paying players produces a dramatic upswing in revenue from even the 20th percentile group.
Some game companies talk openly about the fact that they have whales, but others shy away from discussing them publicly. It costs money to develop and keep a game running, just like those fancy decorations and free drinks at a casino; whales, like gambling addicts, subsidize fun for everyone else.
At a conference I attended last year, a representative of a gaming company — who declined to be named or interviewed for a story — claimed that his firm had worked with a Japanese game company with one player who spent about $10,000 per month on in-app purchases. The company, he said, had assigned an employee to cater just to that whale, to ensure that she was always satisfied with the game and therefore likely to keep coming back.
That’s an extreme outlier. And it would be unfair to assign a blanket of blame to all free-to-play game companies, as some monetize more aggressively than others. When I spoke to him over lunch last November, Scopely CEO Walter Driver argued that a minority of players choosing to spend a lot does not an ethical dilemma make.
“We want to provide people with an experience they love so much that they’d spend money to have a deeper experience,” Driver said at the time, shortly before the release of Scopely’s free-to-play Skee Ball Arcade. “Am I tricking you into ordering dessert, or are you saying, ‘I like it here, and want more of the stuff I enjoy?’ … It’s not an ethical problem from the developer’s point of view.”
Among longtime gamers, companies that profit from whales often get accused of ruining games. In a panel at the DICE Summit earlier this month, pinball and arcade designer Eugene Jarvis playfully antagonized the moderator, Zynga senior creative director Mark Turmell, by comparing free-to-play games to hardcore MMOs that make players play for hours and hours, or “grind,” to advance.
“Now, with this crush of millions of apps, all of a sudden it’s like, ‘We need to monetize,’” Jarvis said, adding, “We don’t want to be the 99 percent. We want to monetize these whales. We want to sell purple cows for 5,000 bucks. I mean, you’re at Zynga. You guys invented that shit!”
Turmell laughed and quickly moved on to another topic. Zynga, in fact, did not invent free-to-play monetization, which began in Asia as PC/online gaming companies like Nexon sought to combat game piracy.
For all the chatter about this game or that game getting millions of downloads, the story of the business of mobile games is still happening in the top-grossing charts. And that story is: Games for the many, paid for by the few.