In-App Purchases of the Top Grossing apps
How 200 Top Grossing apps price their IAPs
Since in-app purchases (or “IAPs”) became a thing the App Store landscape has changed dramatically. From consumables in games to subscriptions for dating services the purchasing options in apps now span a huge range of options in price and value. For those of us building apps it can be hard to know where to start, and benchmarking data is difficult to find unless you have deep pockets.
I thought it would be interesting to take a look at how apps that have been hugely commercially successful approach this, to see if there are any obvious trends. I took a snapshot of the top IAPs for the iOS App Store’s Top 200 Grossing apps in the USA on September 24, 2015 and here’s what I found…
The Method
For each app in the Top Grossing chart I looked at these data points:
- the app’s rank on the Top Grossing chart
- price to download the app (obviously most were free)
- the list of IAPs displayed on their public App Store page including:
- price of each IAP
- name of each IAP
- position on the list of IAPs for that app
For any one of these apps I was only able to grab the Top IAPs, up to a maximum of 10 per app, as these are the IAPs that are publicly available on the App Store. It’s important to note that these 10 IAPs are the top IAPs for each app over time, so not all of the IAPs listed are necessarily live for the current version of that app.
Which categories are the Top Grossing apps in?
On the day in question 12 app categories were represented in the Top Grossing chart. 74% of the apps were games, which I’m sure doesn’t come as a surprise. The two next most popular categories were Social Networking (8%) and Music (6%). Fittingly, this chart looks like Pacman:
How many Top Grossing apps are free to download?
I looked at the percentage of these apps that are free downloads. I expected it to be high, maybe 95%. In reality it’s even higher — 98%! Of the 200 apps I looked at only 4 were a paid download. They were:
47. Minecraft: Pocket Edition $6.99
66. Grindr Xtra $0.99
151. Plague Inc. $0.99
182. Bloons TD 5 $2.99
The IAP data
Here’s a quick overview of the IAP data for all 200 of these Top Grossing apps:
Total number of IAPs 1671
Lowest IAP price $0.99
Highest IAP price $299.99
Median IAP price $8.99
Mean IAP price $19.11%
Apps with 10+ IAPs 69%
The two-fold difference between the mean and median IAP prices tells us there are some high-value outliers. Next I put the data into a scatter chart to identify those:
The scatter chart makes it easy to see that IAPs above $100 in value are clear outliers — only 9 out of the 1671 IAPs that are above $100 in value.
What surprised me a little about this chart was the prevalence of some higher value IAPs, specifically:
- $99.99
- $49.99
- $19.99
It’s possible that I’m just a cheapskate (or not addicted to any iOS games), but in my own experience most of the IAPs I encounter tend to be below this level. To get a clearer picture I decided to put the data into a pie chart:
The huge popularity of $4.99 as an IAP price point wasn’t so easy to detect from the scatter, but on the pie chart you can see how common it really is. Probably the most interesting thing for me on this chart was that $0.99, $1.99 & $2.99 IAPs are far less common than I thought.
Games vs everything else
Now that I’d had a look at the overall data for the Top Grossing chart I wanted to see how the picture would change if I isolated Games.
Games
Number of Apps 149
Total number of IAPs 1344
Lowest IAP price $0.99
Highest IAP price $99.99
Median IAP price $4.99
Average IAP price $16.77%
Apps with 10+ IAPs 78%
If anything, filtering down to Games only makes trends clearer on a scatter chart:
I can’t resist making a Game Pie ;)
For legibility I grouped together all price points that represented <1% of the total into the “Other” category.
The common price points in the overall data all show slightly greater representation when we filter down to games. In fact over 50% of the 1344 IAPs analyzed were priced at one of 4 price points: $4.99, $9.99, $0.99 or $19.99.
Non-games
Now for the other side of the coin. Here is the overall data for non-Games apps:
Number of Apps 51
Total number of IAPs 327
Lowest IAP price $0.99
Highest IAP price $299.99
Median IAP price $12.99
Average IAP price $28.70%
Apps with 10+ IAPs 43%
As a pie chart, it looks like this:
Again I grouped together all price points that represented <1% of the total into the “Other” category.
As you might have guessed, with games removed the IAP prices are more evenly distributed. Makes sense when you consider that there are music, social networking and other categories all mixed together here. Non-games also tend to offer higher-value IAPs, with a median price of $12.99 and mean price of $28.70. Non-games top grossing apps also offer fewer IAPs than their game counterparts, with only 43% listing 10 or more IAPs on their public page.
This also adds up — many of these IAPs are subscriptions to a service — likely to be more expensive, possibly with web functionality also. It’s also normal for SaaS subscriptions to be broken down into only 3–5 tiers, which may explain why these apps offer (or have offered) fewer IAPs on average.
Honing in on those top two non-game categories, here’s how the data looks:
Music
It seems that the clear trend for music apps is <$20. Interestingly, almost all of these IAPs are subscriptions. Surprise, surprise it’s Apple’s Beats app that offers a $99.99 IAP.
Social Networking (ahem **dating**)
This broader category has no such clear trend, although there are some interesting points here:
- 11 of the 15 apps in this category of IAPs offer or have previously offered an IAP priced at $59.99. With the exception of LinkedIn all of these apps were dating apps like Ashley Madison, eHarmony, and Grindr Xtra.
- 60% of the $1.99 IAPs are offered by one app: Viber. This price point is therefore not as significant as it looks for the category as a whole.
Conclusions
It’s important to note that this data isn’t perfect — flicking through it manually there are some apps that list an IAP with the same name but different price several times. I assume this is down to price testing, where the owners have deployed new versions with different pricing to see how it performs. This wasn’t as common as I thought it might be though. Music apps seem to use this approach most often, yet they also seem to test pricing within a very narrow range. This approach is very uncommon amongst game IAPs.
So what did I learn from this exercise?
Freemium works at this scale, clearly, with 98% of these apps offered as a free download with IAP. Bear in mind that it might not be possible to build your revenue on IAPs only in the early days, unless your app is inherently viral.
Games:
- $4.99, $9.99, $0.99 or $19.99 are the most common price points for game IAPs. If you’re launching a new game think about IAPs around these values to ensure you’re competitive against the big guys.
- Variety is the spice of life. 78% of top grossing games offer 10 or more IAPs. Giving users a lot of choice logically maximizes conversion rate.
- IAPs over $99.99 aren’t a thing for these successful guys, so don’t get greedy :)
Non-Games:
- Subscriptions baby! If you’re not in the games… errr… game, then SaaS models are very common. Trust us, recurring revenue businesses are awesome :)
- Think big(ger) price tags. Both mean and median prices for non-games are around 2–3x that of games.
- If you’re building a Music app you’ll need to keep your IAPs in the <$20 region to stay competitive. Unless you’re Apple, of course.
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Originally published at blog.appbot.co on October 1, 2015.
