Freemium

Written by David Frampton @ 11:38 pm, July 7, 2011

[update - it wasn't clear, when I refer to 'freemium' I am specifically talking about the type of free to play games which are currently filling the top grossing charts. Those where the player buys packs of in game currency to speed up and improve something they are trying to grow/create.]

Eli Hodapp from TouchArcade today posted an article showing that Free-to-play revenue has now overtaken premium revenue on the App Store.

I mentioned on twitter that I thought this was a bit sad, but there wasn’t enough space to really say why. So I thought I’d explain.

Developers are noticing. Many of the developers I have talked to recently are at least planning their freemium games in their head, if they haven’t already shipped or started working on one. We’ve all seen the writing on the wall for a while now. Freemium is where the money is. At 99c a pop, premium games just can’t compete when it comes to revenue.

So developers are switching to making freemium games, and we’ll see more and more of them in the future. As a side effect we’ll also see less and less premium pay-up-front games.

The thing is, I don’t believe the majority of people actually prefer these kinds of games. As a genre they’re fine and good, and I’ve enjoyed a few of them myself. But this financial ‘voting’ if you like, is not representative of gamers as a whole. Freemium is just so damn good at making money, that its users are over represented. And as a result, developers are switching focus away from what the majority of gamers actually want.

I’m sure everything will be fine, there’s only so many freemium titles that can be made before that market will be saturated and developers will start moving back to premium. Also, as Dave from NimbleBit (creators of the excellent freemium title Tiny Tower) pointed out, they’re probably not actually taking away any customers from the paid games. Though freemium is an appealing and growing market, the premium game market is still doing just fine.

But I do feel a bit sad for all the premium games we’re missing out on as developers work on freemium titles. I’ve played enough freemium games now, but there will be a lot more to come.

And to be perfectly honest, I’ll probably be one of the developers responsible.

[UPDATE 2 - Eli has responded here.

I agree with what he says there. Really my use of the distinction between freemium and premium in this post is completely incorrect. Not all freemium games are of the kind that I'm talking about, and a game needn't be premium in order to avoid being of that type. However this post still stands as long as you keep in mind that I am only talking about the farming type games as I defined above (added after Eli had written his post). These are the games making the money, that developers are flocking to create.]









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