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Comment by phamilton | Hacker News Reader

My favorite version of nonsense in ads is the current mobile space.

Assuming mobile data is $10/GB, a 1MB video ad costs the end user 1 cent. Quality (though not premuim) mobile ad space has a CPM of about $5, or a cost per impression of half a cent. So whenever you see an ad in a mobile app and you aren't on WiFi, you are paying 1 cent to use the app _and_ watch an ad and the publisher is getting less than half a cent (ad rev share) from the advertisers. The end user and the publisher would be better off if they just paid the publisher half a cent directly.

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> Assuming mobile data is $10/GB, a 1MB video ad costs the end user 1 cent.

Yeah and then the ads aren't even remotely interesting - most of in-app video ads for me are uninteresting-as-... F2P games (Clash of clans and countless variations - just how in blazes do these actually make money?!).

But what I find even more annoying: that there apparently seems to be no way for the in-app ads to check if I already have a certain application installed. It's wasted money for Deutsche Bahn to spam me with ads for their (actually highly useful) app when I already have it installed... but then again, it's bad for privacy if any adtech company can profile me based on the set of apps I have installed.

> just how in blazes do these actually make money?!

I'm guessing they expect to make it back on the occasional whale who can't control their spending on these types of games.

Exactly. They extract money by addicting people and taking advantage of them. It should be criminal.

While in general I support your opinion, there is one critical question: where should the line between legal and illegal be drawn?

For example, consider DLCs, a form of IAP. In the Fallout universe, what you get as a DLC would in other franchises be an entire game... should this be made illegal too?

In my opinion, not - but instead it should be made illegal to ship games with bus so serious it requires weeks of waiting for multi-GB patches so they're barely playable...

Almost nobody thinks of DLC when they talk about F2P games, except for the people making decisions in the Google Play store dev while being clueless and divorced from the actual market.

I think there's no need to worry about or bring that up.

I'm not talking about a definition for nerds, I'm sure everyone on this forum knows the difference. I'm more after something that can be presented to a politician and be acted upon.

And most politicians either have no clue or don't care about the difference between DLC and IAP, for them it's the same - you pay for "new" content in a computer game. Have enough voters complain to them and they'll cluelessly enact crap as laws.

I'm not sure if i disagree or not, but you're diving into a veritable pool of what-ifs there.

Well what's getting quite popular these days is the concept of a "loot box" which is where you spend some real money to get a box of unknown items.

When you open it you get a randomised, by whatever factors, set of items/powerups/whatevers. It adds a bit of a gambling aspect to it where a user might want to pay again to have another roll of the dice.

That's pretty easy to distinguish

the poor guy who's kid spends $300 on in purchases ends up subsidizing 10,000s of users.

> just how in blazes do these actually make money?!

Read this, and the other posts this guy has written. He has worked with a number of F2P companies on designing and implementing their business model, always trying to get them to build nice systems, and has learned a lot about the inhuman ones.

http://www.gamasutra.com/blogs/RaminShokrizade/20130626/1949...

TL;DR: Almost all F2P games, except for like 10 or so on the PC, exploits brain faults common to almost all humans. They lead them from a fun skill-based game experience to an abusive "pay to be able to play at all" model. (Like in arcade machines, only lives are disguised as power ups, and easily gained without cash early in the game cycle.) If people started out in the latter mode they'd balk at paying for an unknown, but this way they're driven to stick with it due to the memories of the start, as well as the thinking of "i spent this much time already". (sunk cost fallacy)

> Clash of clans and countless variations - just how in blazes do these actually make money?!

Typically, 1-2% of userbase is paying, but a typical LTV of a paying user in a successful game is $50-100. CPI of $5 and even $10 is quite acceptable for the top products.

> Assuming mobile data is $10/GB

That is incredibly steep though. I pay around $1/GB in the UK, which gives the publisher a nice margin, no?

I pay 10$/300MB in Canada on a major carrier.

You live in a place with a competitive market.

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