Tag: game industry

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.

Chillingo and Samsung join forces to support mobile games

| March 2, 2013

Mobile Games Samsung and Chillingo partnershipMobile games developers may benefit from new publishing platform

Chillingo, a subsidiary of Electronic Arts that publishes mobile games, has announced its partnership with Samsung this week. The two companies will work together to provide new tools to the mobile games developer community, helping them find the success they crave in a highly competitive industry. Samsung has been showing very strong interest in mobile games recently, backing several initiatives designed to provide better services to independent developers around the world. Electronic Arts also holds an acute interest in mobile games because of the vast potential that can be found throughout the burgeoning market.

Platform offers 100% revenue shares for mobile games developers

Together, Chillingo and Samsung will work to develop a new platform for mobile games developers that will offer them unparalleled revenue opportunities. This platform is called 100% Indie and acts as a community hub where developers can share they games, which are then made widely available to Samsung customers. The new platform will be opened to developers beginning March 4, and will offer them 100% of the revenue they generate through the mobile games that they sell through the platform for the first six months that they are active.

Independent developers receive strong support from consumers

The platform offers higher revenue opportunities for developers than any other platform of its kind in the world. Chillingo believes that the mobile games market is filled with promising developers that often struggle to find the success they need in order to be stable. Many developers are unable to compete with studios that have the backing of large publishers, such as Electronic Arts, but many consumers have fallen in love with the so called “indie” scene, where games are produced and published by their developers rather than through large corporations.

Chillingo expects to see success through new platform

After the first six months a game has been on the 100% India platform, the revenue share that developers have access to will drop. This drop will continue in modest fashion until March 2015, when it will come more in line with the revenue shares offered by other platforms. Chillingo believes that the platform will help expose consumers to very promising mobile games from new developers.