The real Gold Rush is just getting started
TechCrunch just posted an article titled “How’s the Gold Rush Panning Out? 70% of Mobile App Users Pay Little Or Nothing, Study Says”. This implies that with only 30% of users ever paying for apps at all, a game developer’s potential success for the ever-popular freemium mobile game is much more limited than many think. Backing this up is an Ars Technica article from 10 days prior, which reported that “iOS app success is a ‘lottery’: 60% (or more) of developers don’t break even”. So not only are most players not paying, but most developers aren’t making enough off of the ones that do to break even.
This is a huge problem for more than 60% of iOS game developers, but it’s really a problem for every game developer in the ecosystem. The game developers that are breaking even still wish they could get that 70% of non-paying users to pony up, even for a couple dollars. The problem is motivating players to pay, something that is at the crux of every monetization method out there. Yet with 70% of people playing for free, I think it’s safe to say that they don’t work as well as game companies would like.
This is where real-money gaming could spark the next Gold Rush in gaming. Real-money gaming is the idea that players can gamble on the gameplay outcomes of their favorite social and mobile games. This gives non-paying game players incentive to buy in because they could potentially win real money while playing their favorite games. Unlike other monetization methods that force game developers to sacrifice user experience, real-money play will make the game fun and engaging. Excited by the prospect of “playing for keeps”, we foresee real-money gaming converting more free players to paying players and monetizing more effectively than existing methods.
The app store “Gold Rush” might not have panned out, but the real-money Gold Rush is just beginning.