updated 12:52 am EDT, Tue April 1, 2014
Opportunity to 'try before you buy,' earn rewards through ads seen as selling points
A new study from Wild Tangent and IHS Technology has found that iOS gamers overwhelmingly prefer free games with ads -- so called "freemium" games -- over paid but ad-free game apps. A total of 86 percent of the 500 respondents sampled in the survey said they preferred free games with ads over paid games, with 70 percent preferring advertising-support games, while the other 16 percent preferred ad-supported games that offered in-app purchases (IAPs) to buy equipment, levels and other items.
This leaves only 14 percent of the respondents saying they preferred to pay for games outright and not be bothered with ads. One reason for the popularity of ads in games may be that the model allows the games to be "tried" for free before buying, and deleted if the player isn't satisfied. Apple's App Store doesn't allow "demo" or "time-limited" versions of apps, though it is known to offer refunds if players aren't satisfied with a paid app.
The survey didn't make clear how many of that 70 percent of ad-loving gamers exercised the option to pay to remove ads later, after they'd decided they were going to stick with the game, but the 16 percent that don't mind paying later for add-ons or extra content suggest that a fair number of players are willing to pay to remove ads after an initial trial of the game. Some 71 percent of those who preferred ad-supported free games said that they preferred games where they get to choose when and how to view ads compared to apps that don't offer the choice.
This ties in with the respondents who said that they like so-called "value exchange" ads in freemium games, where viewing an ad or playing a video advertisement gave them in-game currency or items. Ads, it appears, are an accepted downside of free games -- but if the viewer gets something in exchange for putting up with them, they're a positive feature -- and gamers will spend an average of 28 percent more time in the app, even if part of that time is watching video advertisements.
Because developers see in-game ads and IAPs as significant money-makers over what they would get from straight paid downloads, they are increasingly used in game apps -- particularly as the target audience seems to accept them willingly. Only around 15 percent of gaming app revenue comes from paid apps, and IHS predicts that by 2017 that average will have fallen to 10 percent.
As pointed out by MacRumors, 43 of the top 50 highest-grossing apps are "freemium" titles, with the rest being non-game apps and only one paid, no-ad game -- Minecraft Pocket Edition -- in the group. The Minecraft game is reported to earn about $60,000 per day in revenue -- which sounds impressive until its compared to "freemium" games like Clash of Clans or Candy Crush Saga. The former earns approximately $1 million per day in ad revenue, IAPs, booster packs and other items. The latter makes more than $834,000 per day through the same methods.