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In-App Purchases are becoming less attractive to consumers

By Kenneth Ang - on 7 Nov 2019, 3:05pm

In-App Purchases are becoming less attractive to consumers

By now, everyone who has a smart device, be it a phone, computer or tablet should be well-acquainted with the term "in-app purchase", or IAP for short. Still, for those who may not be familiar, it's a marketing concept that relies on providing quick boosts to game progress or equipment in exchange for real money. At first glance, that might be easy to shrug off as just another gimmick, but you might be surprised to know that it has been a keystone in the rise and fall of many gaming franchises who got on the hype train. 

Anyway, according to a recent report published by SuperData (thanks, guys), gamers nowadays tend to spend significantly more on one or two particular games rather than spread it out across a wider range of franchises. More interestingly, the data also reveals that overall IAP expenditure has actually declined from last year

Apart from the proportional increase/decrease in choice spending as mentioned above, the decline is attributed to two other factors: the community's growing wariness of IAP-style marketing gimmicks as well as the failure of additional game content to attract players

As a title that primarily makes money from player-purchased cosmetics, Fortnite is among the worst hit by the decline. In fact, the combined revenue across three platforms - PC, console and mobile did not even manage to break the US$100M mark! It's not alone, though - gacha games like Fate/Grand Order, which operate along similar lines have also seen a general fall in player expenditure. 


What else could have contributed?

In our opinion, the rise of a new contender to the battle royale is one such external factor. Addressed informally as the "auto-battler", the tactical chess-like gaming concept popularised by titles like Auto Chess and Dota Underlords saw a rapid climb to the top of the hype ladder in the latter half of 2019. Additionally, these games do not seem to place as much emphasis on cosmetics, thus appearing more attractive to free-to-play gamers than aesthetic-dominated titles such as Fortnite

Truth be told, all this is quite similar to what happened at the start of 2019 with the battle royale. History is repeating itself in the form of the auto-battler - the genre saw a significant but unsurprising surge in popularity with various developers trying to snag a piece of the pie for themselves.

How it turns out one year down the road is anybody's guess. Will it meet similar troubles as Fortnite and the battle royale in general, or will it continue to stay at the top of the gaming food chain?

Images: Valve, Epic Games, Delightworks