Mobile Mavens

The PG.biz Mobile Gaming Mavens on whether there are any options beyond freemium

Is grind really all there is?

The PG.biz Mobile Gaming Mavens on whether there are any options beyond freemium

On the back of recent research, this week, we asked the Mavens:

"Given that the commercial power of the freemium model now appears to be overwhelming, is there anyone not making free games with in-application purchases?

Adding, "How do you think the industry can take the genre beyond FarmVille-style grinding?"

As Nokia's Alex Bubb pointed out, it's "Easy to forget, but freemium isn't necessarily a genre, it's a mechanic - one that can deliver a solid business case and reduce many barriers."

He continued, "Freemium may be the first real mechanic breakthrough and it will continue to grow, but I hope it won't be the last!"

Volker Hirsch, from social technology outfit Scoreloop (owned by RIM), talked up why the IAP model works so well on mobile, saying "Freemium reduces entry barriers - no initial cost to the user - and adds transparency - you're not buying something based on a couple of shoddy and possibly glamorised screenshots, etc."

Show me the money

Of course, the bottomline with freemium is all about monetisation.

"The better you go about integrating the relative touch points for subsequent transactions into your game design and mechanics, the better the conversion to paying users will be," Hirsch said.

Tim Harrison of the Mobile Consultancy agreed. "One of the great gifts that Web 1.0 gave us was consumer price transparency. The social web has opened the Pandora's box of consumer value transparency, and social networks have given producers the ability to thrive or die by that."

Christopher Kassulke of German publisher HandyGames built on the words of Snappy Touch's Noel Llopis, from his excellent Develop Evolve speech.

"He mentioned a 20 times higher download rate for his free title compared to a selling price of $1. I can tell you that HandyGames has up to a 3,000 times higher download rate compared to paid in some portals!

"Out of those 3,000 times more consumers, you generate tons of happy consumers that come back and get more titles or using IAP."

All stand together

OpenFeint offers plenty of freemium features to developers. Its SVP for marketing and developer relations Eros Resmini noted that the IAP/freemium model was causing design convergence from different types of developers.

"On the one hand you have arcade developers - those that came from console, value high production quality, and straight up know how to make incredible experiences. These guys are trying to figure out how to run a freemium version of their games. These are not farming, time management, iso-decorators. Mega Jump is a great example," he said.

"On the other hand you have Facebook/social free-to-play developers realising that ARPDAU increases as you improve quality of experience.

"Even Zynga is going down the route of more hardcore mechanics and quality production. These guys have nailed games as a service but are still learning how to build a great looking, beautiful experience."

This year's love

The question of whether freemium is just a buzzword was raised by Pocket God developer Dave Castelnuovo of Bolt Creative.

"There are apps that are successful with all kinds of monetisation model," he said.

"I do think that things come and go in cycles, and that freemium isn't appropriate for every game mechanic. Right now, freemium is definitely where all the buzz is centered. I think this opens an opportunity for devs that want to do something more traditional."

Tim Harrison agreed the model wasn't for everyone and everything.

"Not all games will naturally thrive within a freemium commercial model. Many will be lucky enough - because of either brand or value track record - to continue to charge at the door. DRM, distribution models and billing platforms will play a major part in how developers monetise going forward, so this isn't an entirely free market," he added.

Harrison also argued the market needed a mix of models, "Used strategically, cleverly, with excellence and with constant respect for the consumer's experience - to appeal to the maximum number of consumers - that way lies the best chance of success.

"Or just bet the farm on doing something less benevolent absolutely bloody brilliantly..."

Korean example

Joony Koo - who has just left Korean publisher Com2uS - provided some numbers on how the company been driving using IAP since 2005.

"Minigame Paradise 2 sold 3 million copies alone in Korea at $3-4 and gained more than 100 percent additional IAP revenue with carrier billing," he revealed.

"The interesting thing is that the so-called freemium games are doing the same thing but lowering the entry cost to nothing. The result is that you usually get 10 times the number of users, but do you get 10 times paying users?

"The result as far as I know is nowhere close to the percentile numbers we were getting."

Turning the sausage machine

He continued, "As I heard from one of the sessions at GDC, in the end there are producers who just know how to make fun games and build IAPs around it. There are others who can read the data analysis and work around it to make games."

Mills, from UK developer ustwo, agreed. "I do personally feel that it's become a bit of a buzzword, and now I see a lot of games with IAP that don't seem to need it ... feels shoehorned."

Castelnuovo was also worried about the increasingly mechanic nature of the freemium business.

"It's all about trying to get cross promoted, tune your economy, K factor, ARPU, and doing ad spends to keep users coming in," he said.

"I think success will start to be driven by the companies with the largest distribution network and bank accounts. You could make an argument that the entire app store is moving in this direction but it feels like with 99c apps there is still the opportunity for the audience to find good games from small developers."

Accentuate the positive

He continued: "On a personal level, while I do respect people that make freemium titles (I love Pocket Frogs, Zombie Farm, and Empires & Allies), I feel like paid games allow me to focus more on game design.

"Optimising the economy, ad CPI, K factor, ARPU, and always looking for cross promos make my head spin a bit and feel more like accounting work than just making something cool and putting it out there."

"Developers should see this as an opportunity to build games so compelling that the in-app purchase becomes a no-brainer for a user because it is something they would want to do," said Volker Hirsch.

"Not to remove annoying and negative interferences (ads, levels cutting out, etc), but in order to further positive experiences in the gameplay. If you get that right, the sky is the limit!"

"And, yes, of course should they use our tools..."


A backroom operator, Dan works behind the scenes to source and proof content for PG.biz; if you notice Dan's work, then something has
gone wrong. Dan's background is in writing about politics, tech and the games industry, and he's addicted to social networking and board
games. His favourite mobile games are Carcassone, Neuroshima Hex and Catan
(though he laments its lack of online multiplayer).

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