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Survey: iOS gamers prefer 'freemium' games over paid downloads

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.




by MacNN Staff

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Comments

  1. Grendelmon

    Mac Enthusiast

    Joined: 12-26-07

    Sigh...

    That's because most iOS gamers have the attention span of a 14 year old, who are exactly the demographic that those games are geared towards. While I'm all for getting a nice profit on your software, the in-app purchase model for those games has become outright ridiculous. And, what really chaps my hide is the gall of some publishers that still incorporate "optional" IAP in paid download games (e.g. GameLoft).

    www.boiseweekly.com/boise/the-cost-of-freemium-games/Content?oid=3036015

    "Techi reports that the average user spends almost $13 a month on "virtual goods"--and that adds up. One hundred of those gems on My Little Pony might cost $10 or so, but, according to CNET, you're going to need 2,555 of them to complete the storyline. Don't want to pay for them? Get ready to ride those ponies every day for 10 years."

    Whatever floats your boat. I've given up gaming on iOS and picked up a refurbished 3DS directly from Nintendo. SuperCell/Rovio/GameLoft, etc will never come close to releasing a title with as much value as Zelda: A Link Between Worlds. It's phenomenal.

  1. vinic

    Fresh-Faced Recruit

    Joined: 06-07-13

    Total BS, I for one am fed of freemuim.
    I am ready to pay a fair price for a good game but no more freemuim crap.
    in the old days you bought a game for 30 to 50 euros now they ask 100dreds of euros for in app purchases.
    I say down with it.
    The survey sees how many children play these freemuim games because their parents do not want to spend the money on paid games. so this survey is bogus and exist only to make someone rich and the consumer to spend more by convincing all that it's ok and the way to go.

  1. Tamm-Horsfall

    Fresh-Faced Recruit

    Joined: 04-01-14

    I, too, am sick of freemium games. I question whether these 500 respondents are representative of the Apple ID holders population. What are the demographics of these people?

    Freemium games are absolutely annoying. I would much rather pay for a game and receive its entire content, along with appropriate challenges, rather than paying along the way to complete a game.

    Also, as others have pointed out, the ludicrous pricing of freemium games needs to be exposed more clearly. No iOS app is worth a $20, 30, 40, 50, 100 IAP (as I have seen in multiple games). Making the most most desirable things obtainable with money rather than skill or time takes away any sense of accomplishment. Rather it leaves a bitter resentment that one has again spent too much on a little entertainment.

    Lastly, as a parent, freemium games with IAP's kills the ability to buy iOS games for my kids as gifts (birthday, Christmas, rewards for hard work/grades/etc.). "But why can't I download this game, Dad? It's free!" Or even worse, "thanks Dad, that was a great gift. Only, isn't this a free game?"

    Demo games are a much better option. I preferred how iOS games started with a freemium limited version and a simultaneously released paid version with no adds or IAPs. The current situation is horrible.

  1. Grendelmon

    Mac Enthusiast

    Joined: 12-26-07

    Finally got the URL to work!

  1. Charles Martin

    MacNN Editor

    Joined: 08-04-01

    It's a small sample, but I think the point about how much Minecraft Pocket Edition makes (no ads, no IAPs, costs $7) versus how much Candy Crush Sage (et al) makes tells the tale. At one time, devs would have preferred demos and trials or the "free version and paid version" model, but not anymore -- for obvious reasons.

    Of course, the problem with the freemium model is that it only works well when the economy is growing and people feel like they can afford to spend $10 a month on "gems" or some such nonsense (to be fair, us "responsible adults" pay $70/month for TV and $6 for a cup of coffee -- there's wasteful spending all over the place, not just in IAPs).

    I don't mind a freemium app that offers to let me pay a reasonable amount to eliminate ads or gain "pro" features -- that's just a way of try before you buy. For games, I have to think long and hard before spending money on them -- is this a game I'm going to come back to and really get my money's worth, or is it a disposable time-killer? Suffice to say that while I don't mind paying for the things I enjoy one little bit, you'll not catch me buying "gems" or "in-app currency." Ever. I'll pay to drop ads or add real value, but not to simply finish the game.

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