A new report by Unity, the top platform for creating and operating interactive, real-time 3D games and content, has found that approximately 77% of individuals who download mobile games make an in-app purchase within two weeks.

In-app purchases have become a dominant revenue source for many mobile applications, particularly in the gaming, entertainment, and productivity sectors. With the increasing popularity of mobile apps and the widespread adoption of microtransactions, in-app purchases are expected to continue driving significant revenue for developers and contributing to the growth of the mobile app industry.

Mobile apps revenue worldwide from 2018 to 2027, by segment(in billion U.S. dollars)

Source: Statista

According to Statista, in-app purchases emerged as the second most profitable strategy for monetization, after advertising.

In-App Purchase Timing Plays a Crucial Role

The report, which examined current efficiency in monetization and user acquisition strategies in mobile games, found that timing is a critical factor in in-app purchase conversion. The vast majority (77%) of players who make in-app purchases do so within the first two weeks of downloading a game.

Source: Unity

This data underscores the growing influence and profitability of microtransactions, which have become a key revenue stream for game developers.

Considering this data, developers, and publishers should focus their efforts on converting players during this critical window. There are a number of ways to do this, such as offering attractive introductory offers or providing in-game incentives that encourage players to make purchases.

Drivers of In-App Purchases in Mobile Games

In 2022, Ekaterina Buzulukova and Alina Kobets conducted a comprehensive study aiming to uncover the driving forces behind in-app purchases made by players from China, Indonesia, Taiwan, and India. The research shed light on the most influential factors that encourage players to engage in in-app purchases.

The study found that the perceived value of in-app prices plays a significant role in the purchasing decision. Users evaluate the purchase price in relation to the utility it provides within the game, determining whether the expenditure is justified.

BRICS Journal of Economics

Loyalty to the game also emerges as a crucial factor, as players who are willing to continue playing for an extended period and recommend it to others are more likely to make in-app purchases. Perceived value and loyalty to the game are supported by a study conducted by Kuo-Lun Hsiao and Chia-Chen Chen on drivers of in-app purchases.

The presence of incentives or rewards within the game serves as a strong motivator for players to invest in in-app purchases. Daily rewards or milestones to reach create a sense of motivation and encourage players to continue their sessions. Additional bonuses such as coins or points further enhance the perception of the game’s value for its price.

Playfulness, or the enjoyment derived from playing and interacting with other users, significantly influences in-app purchasing behavior. The social aspect of gaming, including networking and sharing experiences, drives players to spend on in-app purchases.

The study also revealed that dependence on the game, including its significance, tolerance, mood modification, withdrawal tendencies, and conflicts, can impact players’ propensity to make in-app purchases. Players who develop a stronger emotional connection to the game are more likely to engage in microtransactions.

Moreover, factors such as the perceived monetary value, intention to continue playing the same game, and the overall quality of the gameplay have crucial roles in driving in-app purchases. The perception of value, performance, gameplay, character competence, and overall user experience significantly influence players’ decisions to make additional purchases.

The study further explored the impact of flow, satisfaction, trust, honesty, and benevolence on in-app purchasing behavior. Flow, a state of immersive concentration and enjoyment during gameplay, has been found to contribute to players’ willingness to make purchases. Satisfaction arises from repeated interaction with the game, leading players to invest in in-app purchases. Trust in developers’ efforts and skills, as well as the perception of their honesty and benevolence towards users, also play a role in shaping purchasing behavior.

Understanding these factors can help game developers and industry stakeholders optimize their monetization strategies while ensuring player satisfaction and ethical practices in the evolving landscape of mobile gaming.

The findings of this report suggest that mobile games can be a very lucrative business. However, developers and publishers need to be strategic about how they monetize their games. By focusing on encouraging in-app purchases early on and targeting the right players, they can maximize their revenue potential.

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