Mobile game revenue barely outstrips cost per new user—except in these three countries

by Mike Rougeau

February 21 2014

The Cost Per Install (CPI), or the cost of acquiring new users, in some countries is just barely below what developers make from said users.

A recent survey of the Chartboost mobile monetization network by analytics and research firm Distimo found that in the U.S., tablet and smartphone game developers make an average of $2.52 in revenue per user while the CPI is $2.17. Taking into account the 250 highest-grossing apps during the fourth quarter of 2013 (and exlcuding those released before January 2012), that's only a ¢35 profit per player from paid downloads and in-app purchases.

Same story for Canada, the U.K., Germany, Italy, and China, where those margins are ¢31, ¢47, ¢38, the low ¢14, and ¢23, respectively.

But in Japan, South Korea and Australia, the numbers and margins are considerably higher. Japan makes a whopping $6.34 per user with a cost of $4.48 per download (a difference of $1.86). And South Korea and Australia's revenues per player are $3.82 and $4.50, respectively, with margins of $1.84 and the high $1.91.

The explanation may be that the free-to-play business model originated in the East and is technically much newer in the West, as Recode points out. Free-to-play makes up 94 percent of the app marketplace's total revenue in Japan, but only 79 percent in the U.S. That said, F2P is 94 percent of total revenue in China, too, but China's distribution of CPI vs. revenue per user more closely resembles the U.S.'s. So who knows?

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