REPORT: What Facebook Users Spend Money On (Interview With Justin Kloc Of Arkadium)

Posted Aug 9, 2012

Arkadium is a top game development company that has released their second part of social gaming research recently.  The data reflects the behavior of social gamers such as what they are interested in purchasing.  The survey was conducted with users 18 and older with 48 questions and was taken on March 30, 2012 through Peanut Labs eRewards.  Arkadium received 1,576 responses. Of the responses, 986 were female and 584 were males.

About 63% of the gamers have played with at least 6 friends and 33% spent more than $20 on one purchase. Just under 50% of gamers have purchased in Facebook games, 59% have purchased a premium gift for a friend, and 65% have purchased a gift for themselves.

Around 69% of the users are likely to spend real-world money on simulation games like CityVille and The Sims Social. Around 51% of players spend money to decorate and personalize games and 44% spend money to gain an edge. About 46% of players purchase game upgrades and 52% typically stay in the $0-$5 range for in-game purchases. Game currency and game upgrades are the most popular categories of items to purchase.

Below is an interview I conducted with Justin Kloc of Arkadium:

Amit Chowdhry: Have you noticed any trends in terms of what people purchase?  For example, it appears that a majority of the people buy virtual goods for decorating and personalization. Has that always been the case or have people purchased more virtual goods to gain an edge in the past?

Justin Kloc: We?ve noticed that these purchasing trends tend to follow in line with the most popular Facebook games of the day. The majority of respondents report that they have played sim and city-building games, so it follows that what they are purchasing most are the decorative items for sale in those games. With arcade and puzzle saga style games, functional performance boosters are popular. In general, the trend with purchases is in line with the popular style of games on Facebook, rather than a shift in consumer habits overall.

Amit Chowdhry: In the study, Arkadium was able to determine that 67% of the buyers wait over a week before they are convinced in buying a game?  How were you able to extract the data for this part of the study?
Justin Kloc: For this part of the survey we isolated respondents who had made a purchase in a Facebook game in the past. Along with several other purchaser-specific questions, we asked these gamers how long they had played a game before they made a purchase. 67 percent of users claimed to wait at least one week before buying in-game items.
Amit Chowdhry: Do you believe that people have a tendency to spend more on Facebook games or mobile games?  The $0-$5 range for in-game purchases seems pretty low when compared to the amount that people spend on the iPhone to my knowledge.

Justin Kloc: We were surprised to learn how many purchasers were willing to spend over $11 on a single purchase (44% had spent at least $11 on a purchase before), and 24% claimed to have spent more than $20.  I have read some research that reported the average transaction in iOS and Android games is as much as $14. With the Freemium gaming model, players are going to spend more frequently on virtual items for a game that they are dedicated to, regardless of platform. And as more payment methods and revenue models for mobile games emerge, it will just increase the ease of these transactions.

Arkadium Social Gaming Monetization Research – Part 1 from ArkadiumInc

2012 Arkadium Social Gaming Monetization Research – Part 2: Purchaser Behavior from ArkadiumInc