What the Top 50 Apps Do With IAP
That the Rest of Us Don’t
MIKE HINES
DEVELOPER EVANGELIST, AMAZON
@MikeFHines mikehines45...
CREDIBLY INNOVATE PHOTO HERE
IAP: Way beyond the item list
TODAY’S AGENDA
The top 50 vs. the rest of us
How they did it
Wh...
Free apps are very ‘now’.
And probably tomorrow too.
In-app purchases generated only 53% of revenue in the
Apple App Store for iPhone in January 2012 in the U.S.,
But generate...
Garter is forecasting that, by 2017,
94.5 PERCENT OF DOWNLOADS
WILL BE FOR FREE APPS
Garter – http://www.gartner.com/newsr...
IN APP PURCHASING - TYPES
Consumables
Things that get used up.
Entitlements
Things that the user gets to keep.
Subscriptio...
IN APP PURCHASING - CURRENCY
Soft-Currency
Easy to earn, easy to purchase, inflation compatible.
Hard-Currency
Inflation r...
Top 50 vs. the rest of us
Cohort Analysis
Group A: Top-50 Grossing
Source: Amazon Appstore, March 2014
Group B: Rest of Freemium
Day 0: Installs
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiii
iii...
Day 0: Active Users
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii...
Day 0: Uninstalls
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
i...
Day 0: Paying Users
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiii...
Day 0: Engagement
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiii...
Day 0: Revenue
Group A: Top-50 Grossing
iii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiii
...
1 Day Later…
Group A: Top-50 Grossing
ii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore...
3 Days Later…
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March...
1 Week Later…
Group A: Top-50 Grossing
iiiiiiiiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March...
2 Weeks Later…
Group A: Top-50 Grossing
iiiiiiiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 201...
1 Month Later…
Group A: Top-50 Grossing
iiiiiiii
iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii
Source: Amazon Appstore, March 2014
Gr...
Hours Since App Download
IN-APP PURCHASING BY HOUR
Source: Amazon Appstore, March 2014
0 24 48 72 96 120 144 168 192 216 2...
WHAT WE LEARNED
The top have higher average price points
You can charge more in the right place and time.
Session length a...
What the top 50 do differently
THE TOP DEVELOPERS KNOW THE NUMBERS
?
ENGAGE
CUSTOMER
EARLY
KEEP THEM
IN THE
GAME
GIVE THEM A
REASON TO
COME BACK
37% of u...
Games with bigger selection
RECEIVE MORE
ORDERS PER
CUSTOMER
Developers that add new items regularly are able to
re-engage...
Apps with tutorials that introduce IAP
items
HAVE A 2.5x HIGHER
CONVERSION RATESource: Amazon Appstore, July 2013
Apps showing users how to “consume”
GET MORE REPEAT
ORDERS
Games that providing a post-purchasing tutorial
generated 65% m...
Conversion Rate
INDEX: Average = 100%
Don’t confuse your customer
OFFER VARIETY,
BUT NOT TOO MUCH
Source: Amazon Appstore,...
Apps that made it easy to shop
INCREASED REVENUE 75% (ARPPU)
Source: Amazon Appstore, March 2014
Most of us have too much
CONCENTRATION ON LOW
PRICESTotal Marketplace: Assortment by Price Point
Source: Amazon Appstore, ...
We find that the
TOP GAMES ARE MORE
BALANCED
Source: Amazon Appstore, March 2014
Top 50 Apps: Assortment by Price Point
28...
WHAT WE LEARNED
Games with bigger selection
RECEIVE MORE ORDERS
Tutorials that introduce in-app items
HAVE HIGHER CONVERSI...
How you can increase session count and
minutes per session
REDUCE BARRIERS TO FREQUENT
USE
Tuning Game Difficulty
WILL ENCOURAGE
LONGER SESSIONS
Too hard, and users will abandon. Too
easy, and they can get bored. ...
Adopt Social: Leaderboards and awards
CAN CREATE BUZZ
AND KEEP USERS
ENGAGED
This will result in more friend-to-friend mar...
Adopt Social
SOCIAL ENGAGEMENT
DRIVES ADDITIONAL
SESSIONS
Hosting Special Events
WILL ENCOURAGE
MORE ENGAGEMENT
Offering special levels and unique item rewards
during a specific ti...
Design IAP into the
fabric of your game
MAKE IT
EASY TO BUY
Offering ways to buy your IAP
items when they are needed
will ...
To sell more IAP items,
BE CLEAR
ABOUT VALUE
Make it obvious what the
benefit is for buying different
price items. Confuse...
WHAT WE LEARNED
Make it quick to start playing
REDUCE BARRIERS TO FREQUENT USE
Nobody likes a pushover (or a bully)
TUNE G...
How Did We Do?
http://bit.ly/Top50Survey
Contact us:
forums.developer.amazon.com
developer.amazon.com/help/contactus.html
...
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What the Top 50 Apps Do With IAP That the Rest of Us Don’t

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As presented at the Israel Mobile Summit 2014 by:
Mike Hines, Amazon
http://www.israelmobilesummit.com

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What the Top 50 Apps Do With IAP That the Rest of Us Don’t

  1. 1. What the Top 50 Apps Do With IAP That the Rest of Us Don’t MIKE HINES DEVELOPER EVANGELIST, AMAZON @MikeFHines mikehines45 mihines@amazon.com
  2. 2. CREDIBLY INNOVATE PHOTO HERE IAP: Way beyond the item list TODAY’S AGENDA The top 50 vs. the rest of us How they did it What we can do
  3. 3. Free apps are very ‘now’. And probably tomorrow too.
  4. 4. In-app purchases generated only 53% of revenue in the Apple App Store for iPhone in January 2012 in the U.S., But generated a record 76% in February 2013 clearly demonstrating the success of this monetization method Distimo http://www.distimo.com/blog/2013_03_publication-how-the-most-successful -apps-monetize-their-user-base/
  5. 5. Garter is forecasting that, by 2017, 94.5 PERCENT OF DOWNLOADS WILL BE FOR FREE APPS Garter – http://www.gartner.com/newsroom/id/2648515
  6. 6. IN APP PURCHASING - TYPES Consumables Things that get used up. Entitlements Things that the user gets to keep. Subscriptions Things that the user gets as long as they keep paying..
  7. 7. IN APP PURCHASING - CURRENCY Soft-Currency Easy to earn, easy to purchase, inflation compatible. Hard-Currency Inflation resistant, hard to earn, easy to purchase.
  8. 8. Top 50 vs. the rest of us
  9. 9. Cohort Analysis Group A: Top-50 Grossing Source: Amazon Appstore, March 2014 Group B: Rest of Freemium
  10. 10. Day 0: Installs Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiii100100 installe d
  11. 11. Day 0: Active Users Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiii4142 In active 5958 active
  12. 12. Day 0: Uninstalls Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Iiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active
  13. 13. Day 0: Paying Users Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active 33 paying
  14. 14. Day 0: Engagement Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 6.9 7.4 2.6 2.9 18 21.6
  15. 15. Day 0: Revenue Group A: Top-50 Grossing iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiii =× # of items / paying 100% 112% avg. selling price 100% 136% 100% 154% ARPPU 1318 uninstalled 5958 active 33 paying # of sessions / active session length / active (minutes) × = avg. session length (minutes) 6.9 7.4 2.6 2.9 18 21.6
  16. 16. 1 Day Later… Group A: Top-50 Grossing ii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium ii Iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 1725 uninstalled 3437 active 11 paying =× # of items / paying 100% 106% avg. selling price 100% 107% 100% 114% ARPPU 6.7 7.7 3. 2 3. 5 21.2 27.5 =
  17. 17. 3 Days Later… Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 1928 uninstalled 1923 active =× # of items / paying 100% 107% avg. selling price 100% 122% 100% 131% ARPPU 5.9 7.9 2.6 3.2 15 23 =
  18. 18. 1 Week Later… Group A: Top-50 Grossing iiiiiiiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiiiiii iiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 2032 uninstalled 1418 active =× # of items / paying 100% 102% avg. selling price 100% 121% 100% 124% ARPPU 5.7 7.4 2.6 3.2 15 23 =
  19. 19. 2 Weeks Later… Group A: Top-50 Grossing iiiiiiiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiiiiiiiiii iiiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × avg. session length (minutes) 2134 uninstalled 1014 active =× # of items / paying 100% 111% avg. selling price 100% 108% 100% 120% ARPPU 5.7 7.3 2.5 3.1 14.2 22.6 =
  20. 20. 1 Month Later… Group A: Top-50 Grossing iiiiiiii iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii Source: Amazon Appstore, March 2014 Group B: Rest of Freemium iiii iiiiiiiiiiiiiiiiiiiiiiii # of sessions / active session length / active (minutes) × = avg. session length (minutes) 2236 uninstalled 48 active =× # of items / paying 100% 103% avg. selling price 100% 128% 100% 131% ARPPU 5.9 7.3 2.4 3.1 14.1 22.1
  21. 21. Hours Since App Download IN-APP PURCHASING BY HOUR Source: Amazon Appstore, March 2014 0 24 48 72 96 120 144 168 192 216 240 264 288
  22. 22. WHAT WE LEARNED The top have higher average price points You can charge more in the right place and time. Session length and count are important Retention is not the only important metric.
  23. 23. What the top 50 do differently
  24. 24. THE TOP DEVELOPERS KNOW THE NUMBERS ? ENGAGE CUSTOMER EARLY KEEP THEM IN THE GAME GIVE THEM A REASON TO COME BACK 37% of users who will purchase, purchase on the first day 48% of repeat purchases happen within one hour of a previous purchase 64% of revenue comes from 3rd order + 74% of revenue occurs after first 7 days 56% of revenue occurs after first 30 days
  25. 25. Games with bigger selection RECEIVE MORE ORDERS PER CUSTOMER Developers that add new items regularly are able to re-engage their paying customers. 1.14% of the customers generate 30% of sales. Source: Amazon Appstore, March 2014 69% 100% 145% 1-5 Items 6-10 Items 11-15 Items ARPPU by # of IAP items for sale
  26. 26. Apps with tutorials that introduce IAP items HAVE A 2.5x HIGHER CONVERSION RATESource: Amazon Appstore, July 2013
  27. 27. Apps showing users how to “consume” GET MORE REPEAT ORDERS Games that providing a post-purchasing tutorial generated 65% more repeat orders than the market average. Source: Amazon Appstore, March 2014
  28. 28. Conversion Rate INDEX: Average = 100% Don’t confuse your customer OFFER VARIETY, BUT NOT TOO MUCH Source: Amazon Appstore, March 2014 147% 101% 52% 0% 50% 100% 150% 200% 1-5 Price Points 6-10 Price Points 11-15 Price Points
  29. 29. Apps that made it easy to shop INCREASED REVENUE 75% (ARPPU) Source: Amazon Appstore, March 2014
  30. 30. Most of us have too much CONCENTRATION ON LOW PRICESTotal Marketplace: Assortment by Price Point Source: Amazon Appstore, March 2014 31% 29% 7% 12% 11% 5% 3% 1% 14% 11% 6% 3% 16% 16% 11% 9% 0% 10% 20% 30% 40% 0.99 1.99 2.99 4.99 9.99 19.99 49.99 99.99 % of Assortment % of Sales
  31. 31. We find that the TOP GAMES ARE MORE BALANCED Source: Amazon Appstore, March 2014 Top 50 Apps: Assortment by Price Point 28% 15% 10% 13% 11% 9% 9% 5% 32% 19% 7% 4% 10% 12% 5% 4% 0% 10% 20% 30% 40% 0.99 1.99 2.99 4.99 9.99 19.99 49.99 99.99 % of Assortment % of Sales
  32. 32. WHAT WE LEARNED Games with bigger selection RECEIVE MORE ORDERS Tutorials that introduce in-app items HAVE HIGHER CONVERSION Showing users how to “consume” GETS REPEAT ORDERS Treating in-app items like a catalogue MAKES IT EASY TO SHOP 1.14% of paying customers generate 30% of sales +60% Increase average selling price over 30 days
  33. 33. How you can increase session count and minutes per session
  34. 34. REDUCE BARRIERS TO FREQUENT USE
  35. 35. Tuning Game Difficulty WILL ENCOURAGE LONGER SESSIONS Too hard, and users will abandon. Too easy, and they can get bored. Just right, and it becomes addictive! Image courtesy of FreeDigitalPhotos.net
  36. 36. Adopt Social: Leaderboards and awards CAN CREATE BUZZ AND KEEP USERS ENGAGED This will result in more friend-to-friend marketing as players share their achievements and ranks. Players will also compete with friends and leaders and stay engaged.
  37. 37. Adopt Social SOCIAL ENGAGEMENT DRIVES ADDITIONAL SESSIONS
  38. 38. Hosting Special Events WILL ENCOURAGE MORE ENGAGEMENT Offering special levels and unique item rewards during a specific time window will generate excitement and participation.
  39. 39. Design IAP into the fabric of your game MAKE IT EASY TO BUY Offering ways to buy your IAP items when they are needed will increase conversion.
  40. 40. To sell more IAP items, BE CLEAR ABOUT VALUE Make it obvious what the benefit is for buying different price items. Confused customers don’t buy anything.
  41. 41. WHAT WE LEARNED Make it quick to start playing REDUCE BARRIERS TO FREQUENT USE Nobody likes a pushover (or a bully) TUNE GAME DIFFICULTY Obligations to friends (even online friends) matter DESIGN FOR SOCIAL ENGAGEMENT Treating in-app items like a catalogue MAKE BUYING EASY WITH OBVIOUS
  42. 42. How Did We Do? http://bit.ly/Top50Survey Contact us: forums.developer.amazon.com developer.amazon.com/help/contactus.html Follow us: /AmazonAppstoreForAndroid @AmazonAppDev @MikeFHines developer.amazon.com/blog Unattributed images sourced from Creative Commons

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