Mobile Game Price Hikes- Factors Behind the Increase in In-App Purchase Costs

For the first time in a decade, the gaming industry is going through an economic crisis; as a result gaming industry declined by 6.4% compared to last year and generated $92.2 billion only, according to Newzoo. The main factors of this crisis lie between post-pandemic changes in player behavior and a drop in consumer spending to the impact of Apple's ATT (App Tracking Transparency).

To cope with these challenges, many gaming giants are adopting new strategies to protect their revenue and player base. One major trend that gained momentum last year was the launch of external web stores by gaming studios and publishers. These web stores allow developers to sell in-game items directly to players, effectively bypassing the high commissions charged by Google and Apple on in-app purchases.

Another trend that has emerged in recent times is the increase in prices of purchasable items in popular games such as Mario Kart Tour, Genshin Impact, Octopath Traveller, and more. The IAPs price hike is due to several factors, including the Federal Reserve's interest rate increase and the growing risk aversion in the market. Consequently, the US dollar exchange rate has surged, causing a decline in major currencies such as the Euro, CNY, and pound sterling against the US dollar.

The recent surge in the US dollar exchange rate has directly impacted Apple’s App Store revenue, as the company is headquartered in the United States. To adjust for these fluctuations, Apple increased App Store IAP (in-app purchase) prices across several regions globally in September. The rate of increase varies depending on how much a country’s local currency has devalued against the US dollar. For example, in Japan, where the dollar rose nearly 29% against the yen, Apple raised mobile game item prices by around 30%.

So, various territories were affected due to price hikes and Apple ATT announcement, which is about 10% to 30% in different regions like Japan, Korea, Malaysia, Poland, India, Chile, Egypt and more.

Price hike Vs. Price reduction between different games

From major titles to in-famous apps, they increased their IAPs accordingly, as the fact cannot be hidden that Apple's announcement has affected most games on the iOS store. However, there are different sets of strategies taken by gaming companies and developers to communicate these changes to their players.

The popular game Octopath Traveler: Champions of the Continent recently displayed a pop-up message announcing a 20% increase in its in-app purchase (IAP) prices across Euro-based regions. As part of this update, the highest-priced pack rose from €99.99 to €119.99, marking a significant change for players in these territories.

Tower of Fantasy released a statement stating they would increase IAPs and follow suit with Apple in adjusting the IAPs. At the same time, other platforms will get their services at regular prices.

The developers of Genshin Impact announced on their official HoYoLab blog that they will raise in-app purchase (IAP) prices in line with Apple’s recent changes across affected regions. They also clarified that the updated pricing will impact all platforms, although the adjustments will first take effect on iOS.

While some companies were hiking their IAPs prices, some companies played smartly and developed a more gamer-friendly approach, like League of Legends: Wild Rift, Mario Kart Tour, and Diablo Immortal.

League of Legends: Wild Rift announced an upcoming increase in its in-app purchase (IAP) prices effective November 18. Players were encouraged to make purchases between November 1–17 before the price hike, which significantly boosted sales. During this period, Wild Rift saw IAP sales double and recorded an extraordinary eightfold growth in daily revenue compared to the previous day.

Nintendo's Mario Kart got new and premium currencies in their existing packs at rising prices to tackle their players in their games. For example, the number of assets (currencies) is getting more in the bucket, like a value pack that went with Five rubies now consists of 6 rubies.

Nintendo also made positive revenue during the economic crisis with their re-balanced packs and got major increases in daily revenue worldwide, including a spike of more than 20 times in Japan.

Among major titles, Diablo Immortal stood out as the only game to actually lower prices following Apple’s changes—at least to some extent. While the price points for all packs stayed the same, Blizzard increased the amount of premium currency offered in each. That same month, the developer also introduced a new currency called Telluric Pearls, which can be used to craft powerful five-star legendary gems. Players can obtain these pearls for free through limited-time events or purchase them via in-app transactions.

In contrast to Apple’s recent announcement, Blizzard has introduced a new currency in Diablo Immortal while lowering its price. The pricing of all packs remains the same as before, but each now includes more premium currency. This update has sparked mixed reactions, with some players criticizing the move as making the game more “Pay to Win.” The new currency, called Telluric Pearls, can be used to craft powerful five-star legendary gems. Players can earn them for free by participating in limited-time events or purchase them through in-app transactions.

Apple expands developer benefits amid controversy and IAP web stores

Following the ATT announcement and news of price rises, Apple announced a positive announcement. It will soon provide developers with 700 additional price points and other benefits, which will enable developers to set prices as per country and many more things.

Epic Games and Apple controversy helped many developers create extended IAPs stores. It happened just after Fortnite's removal from the iOS store because Fortnite offered cheaper IAPs of Vbucks to direct those players who were buying IAPs through direct payment to Epic (Web Store).

Since then, following Epic Games, there have been external web stores launched by Game of Thrones: Conquest, Clash of Clans, Star Trek Fleet Command, and more to offer better deals for purchasing IAPs.

Conclusion:

The mobile gaming industry has been hit by an economic crisis, with a 6.4% decline in revenue compared to the previous year. Factors include post-pandemic changes in player behavior, a drop in consumer spending, and Apple's App Tracking Transparency (ATT). As a result, many game developers have increased prices for in-app purchases (IAPs) to compensate for losses. However, some have adopted a more player-friendly approach, such as offering discounts on IAPs or introducing new currencies. The impact of these changes varies by region, depending on the strength of local currencies against the US dollar.

If you are looking to hire a game development services agency or build an IAP web store for iOS games, Gamix Labs delivers tailored solutions designed to meet your business goals and enhance player engagement.