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Holding your breath and going Freemium – Future Games of London share some stats

By on September 13, 2011
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This is a guest post by Ian Harper, managing director of Future Games of London, recently named as one of Mobile Entertainment’s Top 50 Innovators.

No doubt you all saw this post by Flurry on 7th July (and Nicholas’s subsequent analysis)

 

http://blog.flurry.com/bid/65656/Free-to-play-Revenue-Overtakes-Premium-Revenue-in-the-App-Store

Free Apps take the lead

For those of us selling Paid apps on the App Store, this should prompt an immediate jaw-drop and strategic rethink. The market is clearly moving very quickly, the question is: how to respond? Clearly 6 months in the mobile games business is a long time.

For us at Future Games of London, having had great success with the Lite/Paid app model, ditching that and converting to Freemium was a BIG STEP. We’d built our business on a model that looks about to go extinct!

Earlier in the year we had started to experiment with putting In-App Purchases (IAPs) in our Lite versions. However, shoehorning in a virtual goods economy into Hungry Shark did not make much sense, so we instead went for selling non-consumable IAPs in the form of gameplay modifications: Mega Shark and Blood Bath, then later Treasure Map. We’d had a lot of user feedback on Hungry Shark, and there was clearly an appetite for more variations on how to play the game. We’d resisted these in the past as we’d not wanted to mess with our core game mechanics that had been so successful, but by implementing these as optional extras that could be turned on and off we thought we’d a good solution. GetSetGames had also demonstrated in their title MegaJump that IAPs could work well in a single player arcade game, and so Freemium was not limited to click farming clones.

There were some remarkable early results – the revenue seemed pretty constant, even after months. Then our users started asking for them in the Paid versions, so we obliged. Then the obvious occurred to us – could the IAPs generate more revenue than the Paid app if we increased user volume by removing the price? What we needed was an experiment. By the time the Flurry article came out on the 7th July, our plans were already well advanced. We decided to try converting Hungry Shark – Part 2 to free for a few days when the IAP-enabled Update came out, and to switch it back to paid if it didn’t do the numbers. Here’s what happened:

Sales increased 5x overnight

We had no need to switch it back! It was also coming up to Shark Week again (1st week of August – Thankyou Discovery Channel!), and after the success of Part 2 increasing revenue, we prepared to drop a Shark based nuke on the App Store: making the latest version, Part 3, free. We’d already added the IAPs to Part 3 by the 22nd July, but we decided to hold off until Shark Week in order to maximise the effect. We were not disappointed:

Source: www.appannie.com / iTunesConnect

It was at this point we went public with our results, in a gamasutra press release.

Freemium games now

Hope this article helps any developers out there thinking about Freemium but not really sure how to approach it. My advice would be start doing it now, the Paid app market has taken considerable losses already to Freemium, there may not be much time left! Also, if you need any help with marketing and promotion, check our our Future Games Network proposition and this article on the future games network.

About Ian Harper

  • Pingback: Is iOS freemium a lottery? | Nerd Gamers()

  • Ben

    That is really impressive is there any data on the price ceiling for IAP I know a friend is doing a $20, $40 test at the moment an is converting amazingly well. But have to see what happens with refunds.

    With IAP being applicable to so much if the game play is good is their a price ceiling on what people will pay?

  • I don’t follow your logic.
    In case 1, someone has to be able to tell that Jetpack Joyride is good from the description alone.
    In case 2, he downloads a free game and if (yes, if) he enjoys it, he is able to buy $4 of content.

    I see case 2 as the lower risk option for most people.

  • Guest

    So let me get this straight. “Bob” is looking for a new game. He sees “Jetpack Joyride” and says to himself “I’d rather castrate myself with a spoon than spend $1 on a game.” Then he downloads Hungry Shark 3 for free and immediately plunks down $4 to the privileged of adding back in basic functionality that was stripped from the thing.

    So really the most important conclusion we can make is that people are fucking retards. Or did you already know that?

  • Ian Harper

    Hi David,
    Well spotted, you got me there. Yes, we’ve just put all the iPhone Hungry Shark games to paid to stop complaints from the Android users who still have to pay. No not really… we have our reasons, all will be revealed soon!
    Best,
    Ian Harper
    Managing Director
    Future Games of London

  • David Barnes

    This is amazing. Even without consumables or a particularly free-to-play friendly design you’re still laughing.

    When I visit iTunes the games show as 99c, not free?