What are Freemium Games?
Freemium games are those that cost nothing to download but which you may pay for in-app purchases and may include ads inside. But anyone can play the game free of charge and never pay a cent if they choose to do so.
The alternative is paid games, which you either have to pay a fee to download initially, or you get a free version with an upgrade you have to pay for.
The Current State of Play
Currently 22 of the Top 25 revenue-generating games in the App store are from freemium games and this includes all of the Top 5; so freemium is the dominant force for downloads.
The revenue is generated from in-app purchases – such as chips for virtual poker, other virtual currencies, extra lives, items for better in-game functionality or to enhance one’s game persona. Payment is also made for accessing new levels or game features.
What’s Causing This?
A new breed of gamers has arisen since the rise of the smart phone and the tablets; serious gamers were used to spending money to acquire games – often quite big money on Xbox, PS2 or Nintendo games; the new breed of gamers is more used to playing games on social media sites which may take up a lot of time and which they may play every day, but they are used to getting the game for free.
But these gamers are also divided into two “groups.”
We have quite a tribe of very keen gamers – using android, iPhone and, to a lesser extent, Blackberry, many of whom will occasionally buy a paid game and will upgrade from free to premium.
Then there is a whole bunch of really casual gamers that will virtually never buy a game, will usually stick with the free version rather than upgrading, but will be seen tapping away on their iPhone screen regularly.
Which Way do Developers Turn?
Game developers of the popular titles have clearly made the freemium model work by generating revenue from in-app purchases and by charging for unlocking new levels; but it relies on your game receiving a large amount of downloads and tapping into the percentage of those users that do spend money in-game, which is estimated at between 30-50% of smartphone gamers.
What’s your opinion of freemium vs paid games? Which model do you prefer? The answer to that will probably come down to what type of gamer you are….