Freemium the current favourite, but subscription services may steal its thunder reckons Sega's David Zemke

Such is the pace of the mobile market even some of the publishers most adept at staying ahead of the curve would have to admit the freemium model has caught them unawares.

Ambitious are the firms, however, willing to look beyond the current consumer hunger for free releases and in-app purchases (IAPs) to what comes next.

Sega of America's recently appointed director of mobile David Zemke is keen to talk up the continued relevance of the paid model, but he's also aware that neither freemium releases nor IAPs are the mobile industry's end game.

We caught up with Zemke to ask what forms of monetisation will rise up in the years ahead to unseat the current king.

Pocket Gamer: Distimo's latest figures suggest apps with in-app purchases make up 72% of all iOS revenue. Does this tie in with your own experiences on the App Store?

David Zemke: Yes. We’ve had a few applications that include in-app purchases and they have performed very well.

One of our most popular titles, Kingdom Conquest, has been in the top 100 ranks in Japan for several months and has been a top grossing app for Sega overall.

What kind of bearing, in any, do reports like this have on your output?

Naturally, they indicate that the market is moving quickly in the direction of in-app purchases. However, like any report they must be taken with a big grain of salt.

Distimo's reports do not focus on games, but include all apps. I always take reports like this into account, but in the end, it comes down to making great games and bringing them to as wide an audience as possible.

The report also suggests the majority of these IAP equipped games are free releases. Do you think freemium is likely to dominate iOS in the future?

I think freemium games will be popular for the next few years as people continue to purchase tablets and smartphones. However, freemium games will evolve, just like every other form of entertainment before them.

Think about music and how it has changed from LP to CD to digital to subscription services. Does that mean people have stopped buying albums? I don’t think so. It depends on where the technology is heading.

With mobile games, we might see something interesting happen with more advanced networks, such as a rise in subscription services or streaming capabilities.

Is the relevance of the paid model falling away?

I don't think so. There will be a certain consumer who wants to own a game and pay for it upfront, and that is a great reason to give them quality entertainment for a reasonable price.

Super Monkey Ball 2 is one example a highly rated game with plenty of content, including 115 mazes and 4 characters.

We aim to build high quality premium and freemium games because if people enjoy playing them then they are likely to search out other Sega games.

What are your own IAP plans?

In-app purchases are a great way to add content to any app simple and direct.

We launched a new game called Samurai Bloodshow recently, which is a strategy game where players get to defend their general from waves of attacking samurai.

The game has a system of cards which can be purchased from within the game, which lets users build up their army. They can also trade the cards among friends.

Additionally, what does it say about the App Store as a whole that just 4% of apps are generating 72% of the revenue?

It means that the most popular games are rising to the top and staying there. With so many apps to choose from, it is harder to find fun games to play. So it is natural for people to open up iTunes and look at the top 25 to see “what’s popular”.

The same thing happened years ago in the early console market the top 20 games tended to drive the majority of revenue for the entire industry.

However, the rise of social networks has given publishers new ways and channels to get their apps noticed and to build an audience of loyal fans. So there are other ways to get a hit game noticed.

Thanks to David for his time.