What drives add-on sales in mobile games? The role of inter-price relationship and product popularity

초록

Mobile app developers monetize in-app purchases or add-ons whose prices can be compared with the prices of the app and other add-ons. However, little attention is paid to pricing methods of the base and add-on products to maximize add-on sales. This study examines how absolute and relative prices of new add-ons-compared with those of the base and existing add-on products in the same product-influence their sales with a consideration of product popularity. Using a sample of 7,108 weekly observations derived from 74 mobile games and 514 add-ons, we find that the absolute (relative) price of a new add-on has a positive (negative) effect on the add-on sales. Moreover, we find that the negative relationship between relative price and sales is attenuated by base sales and review volume. This study provides app developers a substantial guideline for optimally pricing base and add-on products under different levels of product popularity.

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