Alex Bubb, senior partner manager, at Nokia, ran the panel, which consisted of:
- Richard Hazenberg, CEO, Lunaforte,
- Miikka Kukkosuo, director, strategic partnerships, Digital Chocolate,
- Mikael Hed, CEO, Rovio,
- Andreas Stecher, exective vice president sales, Fishlabs, and,
- Jane McGonigal, director of research, Institute of the Future.
Bubb: What experiences have the panel had with free games and how do you define freemium games?
Stecher: We've had 17 million downloads of our free Barclaycard games. That model works really well for us, it's only one part of the business however. The other model is to hook gamers and then charge them in different ways. I don't think as an industry we've found the right way to do that yet.
Hed: For me, freemium is everything that's a not straight paid download. I agrre, I don't think we've seen all the models yet. Something we're thinking about at Rovio is how we can increase the reach of our brands, notably Angry Birds. In that context, every single download - paid or free - has value to us because it grows our business. We're thinking about how we can profit from this in the future.
McGonigal: There's also the trend of linking the freemium model to social good causes such as Farmville and donations for Haitian earthquake relief. We're seeing a lot of activity around this and I'll think we'll see more in future.
Question from the floor: What conversion rates do you see from free to paid?
Hazenberg: For our games, some of them we release for free, funded by ads. We use the ads as a reason to encourage people to upgrade, but this rate depends on the nature of the game. We tend to do it for quite casual games, so our conversion rate is about 1 percent.
However, because people currently have to go back to the Ovi Store to buy the game, it's a barrier to conversation. Micro-transaction will be much better, and so we're very excited that Nokia's introducing the option to use in-app purchases.
Kukkosuo: It also depends on the range of billing options available. It's not just based on the product. Generally I think conversation rates are between 1 to 4 percent.
Bubb: Why is free so important?
Kukkosuo: If you make games based on original IP, you need to go free so people can try out the experience and see if they want to buy it.
McGonigal: I think people are used to free games, but they are willing to pay to be better in the game, whether that's buying a power up or virtual items or customising their look.
Kukkosuo: We view freemium like going into a cafe, you can get a normal coffee or scale up for something better. In the freemium model, you let gamers choose how much they enjoy the game in terms of how much money they spend.
Bubb: Is freemium limited to casual games or can it work for high end games?
Stecher: Freemium works well for games with a broad audience, but some people will pay $5-6 for hardcore games such as Galaxy on Fire.
Bubb: Do you think it cannabalises sales?
Hazenberg: No. Offering games for free gives you a large audience and drives sales.
Hed: Freemium games means you're accessing people who wouldn't otherwise play your game.
Bubb: With the rise of freemium Facebook games, do you think we're moving to a web based model?
Kukkosuo: Games are now a service. Brands need to be available on different platforms whether that's web or mobile or others. I think consumer expect this, even if it's not the exact same game.
Stecher: For each device - mobile, PC, console, web - the game needs to be adapted to the usage of each device. It don't have to be the same. For example, when I was working with EA, we planned a FIFA game on mobile where you were the goalkeeper, rather than a full-on game.
Kukkosuo: The other thing is that in mobile, the world of mouth loop used to be broken in terms of the fragmentation of devices and operators. The web provides a single platform and helps that social and viral interaction.
Hazenberg: I don't think cross platform features via social platform is yet significantly changing the business financially yet but you definitely learn a lot about your audience.
Bubb: How can you tailored freemium into the game experience?
McGonigal: Talking about the creative aspect of freemium, I think there are great opportunities in terms of paying for the ability to leave a mark in a game world. You can be creative with the business models as well. For example, you could auction the ability to do graffiti in a level.
Other things to think about include letting people to pay to gain early access to levels and powers - like the calendar business model. Developers need to think about different ways of offering premium gameplay to people who want to pay for it.
