While the freemium business model becoming more popular on iPhone, one publisher SGN, is hedging its bets.

Its World War II dogfighting game Skies of Glory was launched for free with the option of buying virtual items, but a $6.99 Battle of Britain version of the game which contains extra missions, planes and other content, has also just been released.

We caught up with CEO Randy Breen to find out the thinking behind the decision.

Pocket Gamer: Why have you released a paid version of Skies of Glory?

Randy Breen: The iTunes market is very young and we're finding our way through it, just like everyone else. Models are developing around digital distribution that didn't exist before.

I think there are customers on the iPhone who are interested in one time purchases as opposed to the freemium approach. So we've listened to them and are delivering content in both places.

I'm committed to the freemium model and it works particularly well for certain types of social games, but I also think there are a lot of console gamers who have come to iPhone and they are comfortable with one time purchase.

Having product in the paid and free categories offers different options and means we can deliver our products to reach the customer in as many ways as possible.

Will iPhone becomes more freemium over time?

Breen: The micro-transactions part of the market is still very young and in order to exploit it, games have to be designed around that approach. That is you need to be able to build in the mechanics of burning your way through the product and balancing that with incremental purchases.

Those models are particularly well suited to the turn-based strategy style of game. When applied to an action game, it's more challenging to do it in a way that's fair for the players and that generates enough revenue for the developer.

SGN's current games such as F.A.S.T. and Skies of Glory are male oriented. Why?

They certainly offer a different play style to the Farmville-type game, which attracts the core gamer rather than the casual, but I think F.A.S.T. and Skies of Glory are good, early approaches in terms of allowing the incremental purchase of the product.

They will continue to develop because it is early days. I believe that longterm the freemium model is healthy for the market because everyone gets access to the product because it's free. Consumers can then make their decision about what they want to buy into, instead of buying the whole package.

And from a development standpoint, we're able to see what's selling in the marketplace and focus our attention on the things people want. This means we can respond to the consumer more rapidly with content than if we work for a year and build this big single product and then release the sequel a year later. That's just too slow.

What's next from SGN?

We have both action and strategy products in development. There will be more action products, but social aspects apply to any kind of game. It's just that it require different attention as you move away from the social strategy and the super casual stuff.

What's your take on iPad?

I'm really excited about iPad, and we're going to address the market aggressively. I think the type of game best suited to the device will be somewhat different to those on the iPhone though.

The interface means you have to rethink how you approach the device. I'm not convinced that accelerometer-based steering will the best choice for example.

Will freemium work on iPad as on iPhone?

It will depend on the type of game as to which approach we will take in terms of business model. We're watching the market place and learning what the best approaches are and I expect that to continue for the foreseeable future.

I also think the freemium approach on iPad might be questionable in the early days because the audience may not be big enough to support the products, but it does depend on the product. We'll also be looking to see how consumer react to the products coming to market.

Thanks to Randy for his time