No Whales Yet in Mobile -- But They're Coming

In our story yesterday about "super whales", people who spend over $10,000 on social games, we used data from payments company Social Gold, which gathered information from its services on online social networks. But mobile gaming, the second half of the industry, remains for now almost entirely separate from the online business. So after finding out about whales on social networks we naturally wondered about mobile games -- do they also have whales? The short answer: yes, but only if you reduce your expectations of what a whale is. Some iPhone games have attracted players who will spend hundreds of dollars on virtual goods, according to Ron Hirson, the co-founder of mobile payment company Boku. But Boku's market, as it exists today, actually prevents larger whales from existing. When players pay via their mobile phone, the charge goes to a mobile carrier like AT&T or Verizon. These carriers, especially in the United States, still consider themselves phone and data providers over anything else -- including a mobile bank account for users. So most have caps of under $1,000 for monthly spending, discouraging whales from developing. "I think it will be a while before whales as defined in the US use mobile as their payment choice, mostly because carriers are just beginning to enable mobile payments and are reticent to enable transaction levels to reach these amounts," says Hirson. High per-transaction fees are also a problem. "For the ecosystem of mobile payments to thrive, we need lower carrier rates so that merchants/publishers would choose to offer mobile at parity." Of course, some games will also allow users to pay with PayPal or credit cards, just as they do online -- but for attractions to building mobile games is how easy customers find it to pay with their phone (Boku and competitors like Zong are also integrated into Facebook games for this reason). So for a parallel system of whales to develop in mobile, the carriers will probably have to come around first. Luckily, Hirson thinks that that it won't take long for carriers to come around. "US Carriers have already begun to lower their fees," he tells us. "Verizon announced a 15% fee, down from 30-45%, in recent months. I believe this trend will continue."

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No Whales Yet in Mobile -- But They're Coming

Chris Morrison

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Chris Morrison