Psychology of in-app purchase

Although the in-app purchase might seem like a great idea at first, I’ve come to the opposite conclusion. As long as we're talking good games; regarding amazing games all bets are off. But you'd never read this if you're making The Game anyways. The thoughts on this are deducted from my personal feelings, but as usual when it comes to personal feelings, one tend to think they are more general than they are. So do I, probably, but at least I think there's a grain of truth in them.

If you buy a game up-front, it's because the screenshots look fantastic, OR the grandes+comments are very good, OR the grades+comments are good enough and you're an enthusiast in that specific field (say FPS). If you buy in-app it's because you either love the game and feel you want more content, OR it's because you'd enjoy playing it more but you can't get to the next level without paying the "tax".

And although it's always cheap to buy (compared to physical things or man-weeks spent), when a customer walks away it's always a matter of it being too expensive. Otherwise she would have bought! One other point: when buying "the rest of the game contents" in-app (seems like a common business model for good games, great games usually have more virtual goods), then you also have to take into account that the customer would feel that "I'd gotten more money's worth if I hadn't gotten the first levels for free!". Our brains are still in the bartering business, even though we're talking peanuts.

On a related note, I'm pretty sure that the customer who buys a good game up-front for $5 has the feeling of a good buy as long as the game is played. While I think that on some level the lizard brain of a customer who buys the remaining ten levels in a good game for $5 will imagine buying "a complete" great game for those $5 instead.

On the other hand, IF you are attempting to make a fantastic game (top 100 or on that level) and you're going to take use of in-app purchase, make it expensive. 51% of revenue comes from transactions of over $20.



But if you're not making one of the top 200 games, or anywhere near, I think you can disregard the above. Furthermore, my reasoning goes something like this:

	Up-front purchase	In-app purchase
Garbage game	Won't buy	Won't buy
Unsatisfactory game	Spender might buy	Won't buy
Average game	Spender might buy	Enthusiast might buy
Good game	Anybody might buy	Spender, enthusiast and lottery-winner may buy
Fantastic game	A lot of people will buy	Millions of people will buy

To sum up: up-front purchase will sell more good games and buyers will feel better about their loot. In-app purchasers will be less inclined to buy and will feel deceived when they do.

15% of iPad revenue comes in-app purchase
Buyers of one great game only spent another 40% on in-app purchase.
If you're making a fantastic game, you need in-app purchase to make 14 times the money (contradicting the above).