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Freemium 'fad' fails more studios than it helps, reckons Days of Wonder's Hautemont

Freemium 'fad' fails more studios than it helps, reckons Days of Wonder's Hautemont
Studios who stick rigidly to the paid game business model appear rare on iOS these days.

Speaking to Pocket Gamer, however, Ticket to Ride developer Days of Wonder has branded the freemium movement as the latest "fad".

According to company co-founder and CEO Eric Hautemont, the industry has been too willing to hype up freemium as the next big thing, while its experience suggests it could be a case of the boy crying wolf.

Third time lucky?

"Take a step back: two or three years ago, all you ever heard about at GDC was Facebook, Facebook, everybody was going to develop games on Facebook," recalls Hautemont.

"We were like 'Woah, we don’t really know how Ticket To Ride will work on Facebook, as it’s not much fun taking one turn at a time'.

"Then last year everybody was talking about Android. People were like 'Android, Android, Android'. We looked at the iPad and thought 'Well we've still got work to do on the iPad version, so lets see how this pans out'."

According to Days of Wonder, freemium has replaced both these trends as the fad the industry is now hyped about, but there's no guarantee that it's the real deal.

"What I suspect is that a lot of people switched to a freemium model because they could not make money on the paid side," added Hautemont.

Hiding the hurt

Days of Wonder's view is that the successes some studios have enjoyed heading down the free-to-play route has acted a smokescreen for the many developers who have found it no more welcoming than paid games.

"There are very few games on the F2P side that are really making significant money for their developers," continued Hautemont.

"Yes, it's true they are making lots of money, but I think the few that are making lots of money are hiding the rest.

"Because a lot of the industry is driven by investor and VC money, they are looking for growth of some sort, and if their company can’t grow revenue they try to grow number of users or number of downloads."

The studio doesn't rule out a freemium game of its own at some point, but is careful to point out that, when it comes to board game conversions such as Ticket to Ride, paid for perks have the potential to break the game.

"We still believe there’s a lot of money to be made on the paid side," concluded Hautemont.

"If you look at companies like Rovio or something like Minecraft, I’d say that some of the most profitable developers are still on the paid side, not the F2P side."

You can read the rest of the interview over on Pocket Gamer.
Editor

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font. As PocketGamer.biz editor, he has the pleasure of monitoring the market share of all mobile OSes on a daily basis.

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A bad game will fail regardless of revenue model and getting the right balance with IAP's is definately a skill but for me Freemium is simply about no barrier to entry, it's about getting as many downloads as possible in an already highly competitive market.
jon jordan
I think the point is that companies really need to know whether they are f2p - like Zynga, Glu, GREE etc, or whether they are fundamentally paid - DoW, Epic, EA.

It's when companies try to do both that they get into trouble. Will be interesting to see how Gameloft manages in this context, moving from paid to a hybrid F2P and paid with IAP model.
George Bing
I reckon the same number of companies failing on paid also fail on freemium would be interesting if there were some statistics around that?
Nicholas Lovell
I'm intrigued by the definition of freemium as a fad. I accept that different platforms change, but freemium has been proven on browser, on Facebook, on smartphone and on tablet.

Hautemont is certainly right that many companies fail with freemium - as they do with paid. He is also right that a few companies are making lots of money with paid.

But with 2/3 of the top grossing games being free AND it being much easier to make money outside of the top charts with free than with paid, I think he is preaching what he prefers, not what is best.
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