Earn More With Free-to-Play
Why your game needs to be free-to-play
You work your tail off to build a great game. You put in hundreds of hours. From storyboarding to coding to calls with the designer to guerrilla marketing to gameplay testing to bug fixing, you pour sweat and tears into your baby. And now you want your customers to PAY for it? What are you, crazy?
But why shouldn’t I, you say. Building a game is significantly harder than a one-off web app that engineers can churn out themselves in a weekend, and those engineers charge for them. Building a game takes all of the challenges of coding and throws art, writing, and marketing on top of it. Why am I being punished for building the tougher product?
Sadly, to quote Ben Horowitz, nobody cares. Or at least your customers don’t. They saw your game had a great 4.5 star rating, immaculately written marketing copy, a bevy of beautiful gameplay screenshots, and even a snazzy app icon. They still aren’t convinced: they need to try it before they buy it. In dramatic fashion, users are flocking to free-to-play games and if your game isn’t free, you’re going to be left behind.
So why give it away for free? Honestly, the best way to think of your free users is as a marketing expense. Over the long term, the majority of users will stop using your app rather quickly whether it is paid or free, so your goal is to find as many of those long term users as possible. When trying to build a large user base to find these long term users, being free is a tremendous advantage. Free apps will get downloaded & used up to 6.6 times more than paid apps, and since this effect is compounded by word-of-mouth and viral channels, this can be the difference between your game joining the vaunted Top 100 list or being left in the basement of the App Store for eternity. Being free is also a great way to get users to try your game and convey your game’s vision far better than an app store description ever could.
Free is the new customer acquisition channel for anything from online file storage to Android anti-virus. This trend encompasses all types of games as well, from AAA MMORPGs all the way down to indie mobile games. Free games accounted for over 80.8% of the almost 100 million iPhone game downloads in March 2011. While one may think that the majority of these free downloads never convert to real dollars, the data shows otherwise: freemium games now account for 65% of the revenue generated by the top 100 grossing games on iOS. Furthermore, 75% of these top 100 grossing apps are games, showing that mobile gaming is stronger than ever. Yet these staggering numbers have appeared as advertising eCPMs remain low and rarely beat out paid apps in revenue. You may ask: where is this growth coming from and how can I get a piece of it? The answer is in-app purchases.
Of the top 150 free games on the App Store as of April 2011, 94 games or 63% of these games were using in-app purchases to monetize their userbase. In-app purchases have exploded onto the virtual goods scene recently, and while there are a number of factors that contribute to this trend, the most prominent is increased user familiarity with paying real-money for in-game items. Paying real money to play a free game is a concept that would have made most users balk before Zynga pioneered the approaches and hooks that made this behavior more appealing to players.
Alright, you’ve convinced me. Where do I start?
There are a lot of great companies that are trying to help you learn how to implement in-app purchases intelligently into your game. I have written a post on this topic on Betable’s blog called “A Hacker’s Guide to Monetizing Free-to-Play Games” which covers the three main freemium revenue channels in detail: Advertising, Level Packs, and Virtual Goods. This article was based off of the first TapJoy monetization webinar, which you can watch in full on their blog. There are also many other great resources that are written by people much more knowledgable than I, including Inc Magazine’s guide to creating a virtual goods economy, SlideShares from Amy Jo Kim, and Andrew Chen’s virtual goods guide. I hope these posts get you started, but there are always other great resources out there that are just a Google search away. Good luck, and feel free to shoot me an email about your next game. I would love to try it, as long as I can do so for free ;) .