Is freemium the future for mobile app developers?
The mobile games industry offers a fascinating case study into how users feel about in-app purchases
Aside from disgruntled swine and addictive candy, the mobile game app sector offers a fascinating micro case study of the evolving macro mobile ecosystem as a whole, and by virtue of their mandate to provide the next big craze, mobile game developers are constantly pushing the boundaries of what is technically possible. But when it comes to actually knowing how to successfully monetise their product, these guys are as unsure as everybody else in the field.
At the moment, there seems to be an interesting move by developers towards the so-called ‘freemium model’, moving away from all–out paid–for apps in favour of free models which give users the option of investing a few dollars here and there should they choose to as they progress in the game. Revenue that would have come from traditional pay-per-download models instead comes from in-app purchases – much to the distaste of a subset of users, who argue that this new free-to-play model is ‘ruining’ games.
The numbers behind the shift to freemium speak for themselves. A two-year study by App Annie Intelligence, a company which tracks more than 700,000 apps, showed that revenue from freemium apps has eclipsed that of premium ones as far as iOS and Android are concerned. Revenue from premium download apps failed to show any significant increase.
PopCap’s Plants vs. Zombies 2 is the latest blockbuster example of this model. Launched this summer, the tower-defense sequel racked up more downloads in the first two weeks of its launch than its predecessor did in its entire lifetime. The massive increase in uptake was driven by a shift from an all out paid model to an ostensibly free version of the game.
To date, over 25 million people have downloaded the game, and a small but vocal portion of them have been quick to voice their dissent at this new tactic, with app store reviews such as, “A wonderful concept destroyed” and “Waited all this time for this game only to be presented with in app purchases. Would’ve been happier to purchase at a one off fee.”
This mode of operation also allows developers the freedom to keep growing their in-game worlds. By releasing in-game add-ons in regular increments, developers can continue to enrich and improve gaming experience once the product has been released, and although this could be seen as a cunning money sucking tactic, at the end of the day, it’s up to players how far they want to take their investment. As one of the development team behind Plants vs. Zombies pointed out, “It’s hard for us, because the Plants vs. Zombies 2 experience is one that we’re going to be expanding and adding content to all the time. “ He went on to add, “It would be hard to charge you for something that we haven’t even thought of yet … We’re not selling content.”
One big issue with the freemium option of course is that many users simply aren’t interested in upping their gaming experience. By opting for this form of monetisation, developers are catering for both hardcore and casual gamers – the latter making up the bulk of the mobile gaming market. The average casual gamer may only use their apps to while away a few minutes on the train, and however ever many exciting bells and whistles the developer grafts on, be happy enough with their basic package.
On the other hand, game fans may be disappointed that you can now effectively pay your way to a faster gaming experience, unlike traditional games, where free cheats helped those in the know enhance their fun. Those unwilling to pay may have to sit for a few extra hours of tedious of work before getting the payoff – killing the fun of the exercise entirely.
The solution? According to Adam Telfer, VP of game development for XMG Studio, developers must become more sales-orientated, putting the potential customer in mind from the start to create something genuinely immersive that people will be willing to invest in.
PopCap will be releasing more in-app purchase driven games later this year, although fans may complain about the apparent hard sell. Developers get the carrot of having all the freedom they want to grow their virtual worlds, unfurling their ideas as the fanbase grows. The theory is, if you build it, they will come. And if you build it well enough, they’ll come back, and buy some of your awesome unicorn stickers while they’re there.