If you’re still skeptical that free-to-play mobile games are the future of video games, you need only to look at Clash of Clans’ profit margins for 2015 to be convinced.
Supercell, creator of games like Clash Of Clans, generated $2.3 billion in revenue and profited $964 million last year. The $5.5 billion-dollar gaming company is worth more than Evernote, Eventbrite, and BuzzFeed combined. Just stop and think about that for a second.
This company released a total of four mobile games (Clash of Clans, Hay Day, Boom Beach and Clash Royale), all of which are free to download and make money off in-app purchases. It is now worth more than the largest event hosting company and one of the most popular media companies in the world.
Even more impressive is how Supercell has made this possible with a minuscule staff of only 150 employees. Based on last year’s profits, each Supercell employee is worth more than $5 million.
How are they making so much from in-app purchase, you ask? Pocket Gamer analyzed the behavior of Clash of Clans, and saw a clear pattern of heavy users paying the most money. PG noticed a 12% decrease of players making in-app purchases and a 27% decrease in the volume of in-app purchases from January to March of 2015. On the surface, it looks like Supercell isn’t doing well when in reality, the average value of in-app purchases increased when committed players paid more money. Many people on reddit admit to paying tens or hundreds of dollars, and one person dropped close to $5,000!
Although the trend of addicted gamers paying money for flashy upgrades isn’t new, the amount of money generated is overwhelming.
What’s the most you have ever spent on in-app purchase for free mobile games like Clash of Clans? We need to know because $2.3 billion is an obscene amount of money.