Mobile Game Monetization

Below is a more in-depth look at the global monetization study discussed in Project 2: Game Monetization expanding on what we know about player spending in different mobile games.

This project was completed with data from . Please note that analyses are based on data collected between August 1, 2020, to April 16, 2022 and monetary measurements are in USD.

Historically, video games tended to be one-time purchases, with the complete game available on a cartridge, later a disc, and even more recently digital formats. This has increasingly changed in the last couple of decades in a movement toward more monetization models in video games. In some ways, this is a return to another video game history – that of the arcade. The movement toward additional post-game content and microtransactions harkens back to a time of pay-to-play, particularly for mobile games, but increasingly for other video game formats as well. This study considers player engagement with monetization in mobile games on a global scale.

Microtransactions take many forms in video games, from in-game currencies to loot boxes. These purchases can be continuously open to players and are often uncapped, but make some kind of additional in-game content available to players who purchase it. There has been a significant jump in the use of microtransactions in video games. For example, in 2010, about 8% of gamers on Steam were playing video games that included microtransactions versus about 85% on Steam by early 2019.

Mobile games have also incorporated these as part of freemium or free-to-play models, which make most in-game content available for free, but charge for some additional or premium content. Mobile games explore these models in a variety of ways. Freemium games, for example, lock some content unless paid for while offering most content for free. Free-to-play is similar in that content is freely available, but players can pay for additional content that can make the game easier or more fun by reducing time left on a timer or purchasing more in-game energy. Pay-to-play, on the other hand, are games paid for upfront, which may also include in-app purchases or subscriptions. Finally, pay-to-win games block players’ success or in-game progress unless they make purchases.

These models also change how players engage with games. With games that are sold as a final, complete product, player spending is equal and up-front. In monetized game models, however, players spend different amounts of money. This can happen naturally, following the Pareto principle where about 20% of people are responsible for about 80% of revenue. In some games, this is heavily skewed and the vast majority of revenue comes from a very small proportion of players, with as few as 0.15-1% of players responsible for 50% or more of mobile game revenue.

Below is a table outlining spending distributions and behavioral patterns for the top 1% of players spending money on extra game content and microtransactions. Hover above a point in the table for more information about these distributions.

Note: the above table is based on data collected between August 1, 2020, to April 16, 2022

These uneven spending circumstances and different models for spending have been cause for concern. Some of these models may be viewed as coercing, exploiting, or encouraging overspending among players, with high spenders often being referred to as “whales” in the industry. For mobile games available in the Google Play store in 2021, about 88% were identified as featuring problematic features tied to monetization.

These considerations also extend to who may be doing the spending. Game makers may need to consider whether or not most of the revenue from high spenders is coming from children or individuals who may have disorders that make them more inclined to spend heavily in mobile games. Some design approaches may also – whether intentionally or inadvertently – prompt players to spend more.

In general, player spending on mobile games resembles what is seen in the Pareto principle – with a smaller portion of players making most of the in-game purchases. The dynamic varies between different mobile games, with some matching about equally to the 80/20 split of the Pareto principle (Quasi-Pareto), some having a somewhat more even distribution among players (Sub-Pareto), others generating the majority of revenue through a very small segment of players (Hyper-Pareto), and still others having nearly equal spending habits from most players (Uniform).

Below are a couple of bar graphs looking at some of the particularities of these spending patterns among the top spenders. The first graph looks at median spending per game in the context of each spending pattern. The second graph looks at median spending per user for each spending pattern.

Note: the above figure is based on data collected between August 1, 2020, to April 16, 2022.

Note: the above figure is based on data collected between August 1, 2020, to April 16, 2022.

Hover over a bar in the above graphs for more information!

For “Quasi-Pareto” games, 20% of players are responsible for nearly 80% of in-game spending. “Sub-Pareto” games feature more even spending across players and “Uniform” games are those where players spend about equal amounts of money. Some games stand out as “Hyper-Pareto,” with a very small percentage – about 1% – of players providing about 40% of the in-game revenue.

Mobile games with different spending profiles also have different overall spending from their top 1% of players. For Uniform games, where most players are making about equal purchases, players who spend the most average $19 throughout their gaming experiences. This is higher for all of the other more skewed spending patterns in monetized mobile games. These top spenders spend an average of $138 in Sub-Pareto games, $660 in Quasi-Pareto games, and $1,700 in Hyper-Pareto games.

Mobile games rely on players for revenue to different degrees, with many relying on a small subset of players to make the majority of in-game purchases. The more skewed models – those that reflect Hyper-Pareto spending among a small portion of players – look a lot like what we see in gambling. This may not reflect the concerns surrounding mobile game spending, however. Depending on how much these players contribute to in-game purchases, these expenses may not make a broader financial impact on these players.

Highly skewed games are also relatively rare among mobile games in the study, comprising just under 12%. While mobile games do often have skewed spending behaviors among their players, most have comparatively more even spending across players. Nearly half of the players in the study made purchases in Sub-Pareto and Uniform games. These games also have a low level of spending overall, with under 10% of spending in the study happening in these mobile games.

The type of game can heavily influence amounts of spending, particularly for top spenders. Compared to other monetized mobile games, casino games earn more than other genres, with an average of over $2,000 from their top 1% of spenders. Some players spend quite a bit more than these typical averages, even outside of casino games, though. In the games studied, at least one strategy and one role-playing game had players that spend over $40,000 on in-game content. More needs to be learned about these dynamics, but certain game mechanics (like gacha mechanics or loot boxes) could encourage higher amounts of spending.

To keep up with trends in behaviors, refer to other projects currently underway!