Why Freemium is Dominating Mobile
One of the most prominent trends in mobile gaming is the move to freemium. Spotted as early as 2011, the move to freemium has come to dominate both the iOS and Android App Stores. With the legendary Angry Birds simultaneously sitting in the Top 5 Free Apps and #52 in the Grossing ranks, it’s clear that freemium games are not only more popular, but they’re making significantly more money. Reinforcing this point, Natural Motion informed the press that CSR Racing made over $12 million in its first month with it’s AAA-quality free-to-play game, showing that even high quality titles stand to make more from the freemium model than charging an uber-premium price of $4.99+.
So why is it that freemium games are simultaneously so attractive to consumers and so profitable for game companies?
1) Free removes friction
When someone is looking for games on the App Store, you only have a limited amount of time to catch their attention. This is very hard to do, as evidenced by the rising popularity of App Store Optimization and the fact that our post on Hacking the App Stores still gets substantial traffic almost one year after it was written.
It’s hard enough as it is to convince people to download a free app, so why would you give people another barrier to trying your game? Making people pay for a game, even $0.99, forces people to make a decision about your game. If they play it once and never play it again, they lose $0.99, while if they play your free game and never play it again, they lose nothing. Making your app free removes a key point of friction for user adoption. Once they’re in your game, then you can convince them it’s worth paying money for.
2) Players feel invested
Hopefully, you’ve made a good game. Once players have downloaded and are playing your game, they start to invest in it. They invest their time, to start, but slowly they can become emotionally invested as well, whether its to their cute Zombies that they’re farming up, or into their drag racing car that they’ve worked hard to acquire. Once the player is invested, then it becomes much easier to convince them they should buy a cool new Zombie type or a sweet decal for their ride.
By giving players the ability to play your game before spending any money in it, this can actually increase the amount they are willing to spend. This is because of a psychology principal called cognitive dissonance. In the context of a game, this means that players who have invested their time or emotions into the game will use that investment to justify a purchase. This isn’t a bad thing: it actually gives players more control over what they feel is worth paying for. Instead of paying $60 for a disappointing console game, players can price themselves according to how much a unique or improved experience of a game they already love is worth to them.
3) Players price themselves
When you sell your game for $0.99, $4.99, or even $30, you’re not only pricing out people who might have been willing to pay less for your game; you’re actually pricing down people who would have been willing to pay more. Over 50% of a freemium game’s revenue comes from purchases of $20 or more, and those account for 13% of all transactions! Furthermore, 5% of all transactions are for more than $50, a price unheard of for a mobile game. All of this nets out to an average transaction size of $14, a significantly higher price point than most players would be willing to pay to try a new game.
Make the switch
Looking to switch your game to freemium? Check out Rovio’s Michail Katkoff guest post on the switch: 3 Steps from Paid to Freemium.