Tag: freemium

Mobile games with “freemium” model are the future, according to EA

| April 5, 2013

EA Mobile Games FutureEA continues to become more enthusiastic toward mobile games

Electronic Arts is one of the most powerful companies in the game industry, so when it starts putting more focus on mobile games, it is not doing so arbitrarily. Mobile games are quickly becoming the most popular product that the game industry has to offer. These games are enjoyed by millions of mobile consumers around the world, many of whom are more than happy to put their own money into these games to unlock new features are purchase virtual currencies. Electronic Arts has been growing more vocal on the issue of mobile games as consumers begin to become more critical of the company’s entry into this sector.

Freemium model enjoyed by most consumers

According to EA, the vast majority of people that play mobile games prefer the free-to-play, often called “freemium,” business model. Through this model, consumers can obtain and play mobile games free of charge. This allows games to circulate among a larger audience, potentially acquiring more fans and exposing more people to in-game advertisements, which generate revenue for both the game’s developer and the game’s publisher. Many of the features of these games could be locked, however, with players having to pay to access such features. This particular practice has been criticized by many gamers as greedy and dubious.

In-app purchases are widely supported

EA notes that consumers are enthusiastic about in-app purchases because the can choose how they want to experience the game they are playing. Some purchases involve power-ups that can significantly decrease the time investment requires to complete mobile games. These allow players to enjoy games at a pace that is more accommodating to their tastes. Moreover, in-app purchases are the ideal way for mobile games to generate revenue for their developers. EA suggests that traditional games that require an upfront purchase in order to play typically generate less revenue and are considered, on the business side, outdated.

Freemium is the most popular model among independent developers

While a large portion of gamers enjoy mobile games, many suggest that EA’s insistence on the freemium model is a prime example of corporate greed ruining the game industry. Developers, however, are the primary parties responsible for this business model. Independent developers, those that release games without the backing of publishers like EA, rely heavily on this model in order to remain in business, as the freemium model is the best way for these developers to generate profits from their mobile games.

Mobile games benefit from freemium model

| March 9, 2013

Mobile Games FreemiumFreemium makes mobile games a booming market

Mobile games have become a very prominant market for the game industry. Games for smartphones and tablets represent a market worth billions of dollars in revenue and this market has begun to attract game developers that had previously been focused exclusively on developing titles for consoles and PCs. Though mobile games generate a massive amount of revenue on a yearly basis, most of these games are entirely free, though boast of a wide variety of in-game transactions. This business model is often referred to as “freemium.”

In-game transactions relatively accepted by gamers

Freemium is a simple concept: Mobile games that are free to obtain and free to play, but provide gamers with the opportunity to purchase in-game items and power-ups that can make the game more enjoyable. This is where the majority of the revenue that is generated by mobile games comes from. The freemium model allows developers to offer services to gamers for a relatively low price and because these prices are so low, consumers tend to participate in in-game transactions on a regular bases.

Freemium opens mobile games to more consumers

Analysts from Index Ventures, a venture capital investment firm, suggest that the freemium model is ideal for the mobile games market. This model allows developers to price-discriminate individual consumers, eliminating the upfront costs that are associated with other business models. A typical console game can cost anywhere from $30 to $60, but most mobile games are offered for free, with additional content being offered for as little as $1. Index Ventures suggests that the freemium model does not exploit consumers, but rather allows for a broader consumer base to participate in mobile games.

Business model not accepted by all gamers

Index Ventures suggests that many consumers are willing to sink money into mobile games in order to gain as much entertainment from these games as possible. The freemium model may be great for developers, but it is not universally accepted among gamers. Many argue that the freemium model encourages developers and publishers to create games that are deliberately restrictive in order to heavily promote in-game transactions.