Suprisingly with most free to play games only 1% to 2% of player base will spend on an in-app purchase.

Here are some statistics you can view in the 2019 SWRVE Gaming Monetization Report:  

• The Average Spend per month (MEAN):  $23.016
• The Average Spend per month (MEDIAN):  $4.99
• Average # of Purchases per month:  1.54
• Average Purchase value (MEAN):  $19.465

You are correct that if a greater percentage of players (20%-30%) were to spend $10-$50 it would generate millions in revenue.  However, with most free to play games that is not the case as it tends to consistently be year after year 1%-2% of player spending.

Most players are savy enough to not fall for cheap gimmicy sales tactics and will only spend if they feel invested in the game or community and its growth.  It is not something you can trick people into doing and be able to sustain for any significant length of time.

Highly recommend reading through it as it is a very intersting read and insight into the mobile gamin world business model.  

Very interesting and there are some staggering changes over short periods of . You can see that the spender is becoming more cautious before their first and second purchase  From my experience if the first purchase is to much I'll lose interest and leave the game. Also I'll make the first purchase and see if it's worth it.  The most I ever spent on a game was War of Robots but the amount I had to spend became way to high. That and high ranking players would have low ranking players creat games they could join. So you end up in a game extremely one sided. I showed the Dev. several screen shots showing all but one ( the host) were high ranking. Because alot of rewards were based on performance at the time. Players were abusing the way the matches are created. I never got a response from several attempts and when ever I stopped spending the matches would be one sided and no fun to play. I haven't had these problems with this game until recently. I'm not a big spender but spend alot more then most from what you've shown me. I'm still on the fence with this game and because of all the complaints and increased expense I have stopped paying.  What the report is lacking is a survey to learn why the numbers are changing so dramatically.  Also the high prices are going to affect someone's willingness to spend so you would need to see the price points and the perceived value of the product.  I believe the numbers are going to continue to change and the developer who finds that sweet spot is going to do very well. I think Unity is getting close because their prices seem to be fair. But who knows since it's still evolving. One thing for sure is the developer needs those spenders to never feel ripped off.

2Well said 

You would think there would be a breaking piont.  A drop off of players you would think would figure it out. Like wait a minute they are asking way to much. The higher I go the more expensive it gets. Shouldn't it  cheaper considering how much I've already invested, how long I've been a loyal paying customer. No discounts for the game veterans even. They are ripping me off, in my face. But instead they pay because they feel invested from the money already spent. But think about it what did you get for your money other then being entertained. Anything you paid for they still own and you can only use it when using there product. But it's the false feeling that you own something and have something to lose that they want. For me it's easy to  because I got what I paid for and the price becomes to high to justify spending on entertainment. I've hear people say "I've invested to much just to walk away" or "I've worked to hard and put in to much time so I can't leave now." I had a good friend who was literally addicted to a marvel game and was spending to much. I told him to just leave because it will be there if you want to go back. Take the amount your spending cut it in half and explore new games with it. If your over spending on a game and it's stressful then your not having fun and that's supposed to be the whole piont in gaming. He tried what I said and he thanked me and said "I had more fun trying out the new games then I've had in awhile.  I clicked on my old game and couldn't believe what I was spending to try and have fun but failed to do . I Uninstalled the game.

But what you are describing could apply to any Hobby.  For example, lets say instead of Mech Arena it was Golf.

There are no discounts for playing Golf for years or veteran players.  It has a high investment of both money and time with no gaurentee you will be good.  If you do want to progress in either competitive play or personal it takes even more time and money to be invested.  Once you do so you have clubs that can't be used anywhere else other then on Golf courses.

Ultimately, the majority of people who play (not as a career) do so for fun and entertainment.  You can substitute Golf with any other hobby and the premise still holds that the more engaged you are in the activity or community the more time and money you will spend in it.

Your example is laughable. If I was playing golf, and pay for things, I would own them.  I would own the club's, clothes, balls etc. These things are mine and if I was to move on from golf I could sell them. Mech arena is nothing like golf other than you take time doing either. Intangible pixels on a screen that cost as much as golf clubs are not of equal weight. We don't own any mech in our hanger or weapons. We are beholden to patches and game rebalances that may be detrimental to our progress or enjoyment ( see juggernaught shield). We don't control hackers or stupid aimbots. 

To say the extreme cost and outright greed are ok because it's the cost of being entertained is just plain false. This is simpelton justification and none of us believe this for a moment. 

You gloss over the main point that the more you enjoy or are engaged in an activity(hobby)/community the more likely you are to spend time and money on it or for it, regardless of whether the goods/services/activites are tangible or intangible.

Being of intangible nature versus a tangible/physical nature doesn't change that if you enjoy something you will likely spend more time and money on it or for it.

I think your argument would be better suited if you were to question whether or not you SHOULD spend more time and money or at what point a hobby/activity/community turns into a financial liability.  Entertainment is fun but everyone still has bills.