Freemium (Mostly) Dominates on Android

Freemium. It has been the "it" business model for games ever since Apple and Google introduced in-app purchases (IAP) to the App Store and Google Play, respectively, last year. Investors love it, purists hate it and the media seems convinced that game developers that don't buy into it are losing out in a big way.

At first glance, it does indeed look grim for the traditionalists. Only three out of the top 30 grossing iPad games are not free-to-play (as are 26 out of the top 100). On Android it is even worse. There, only one (Minecraft) out of the top 30 grossing games require up-front payment, as do just eight out of the top 100. (All figures are as of time of posting. Also, since my devices are older some games aren't shown to me, but what's left should be a reasonably representative sample).

So are the days of paid games numbered? Are mobile gamers doomed to an endless sea of ads, gold coins and slowly-replenishing energy bars? It actually depends on the category of game, and by a wide margin at that. I took a look at the top-grossing games on Google Play by category, and sorted them by free-to-play vs paid. Here are the results:

Almost all of the money made in the arcade/action, card/casino and casual categories gets made by free-to-play games. Just three paid arcade/action games crack the top 30. The casual and card/casino categories see only one paid game each in their top 30 lists.

It is another story, however, in the three remaining categories. Brain/puzzle, racing and sports games all have more-or-less parity between freemium and paid in their top 30 grossing lists. This same dynamic holds for the top 100 grossing games, though within this less exclusive scope paid games do better overall:

Sports and especially racing games appeal more to traditional gamers. This is a segment of players who, as a whole, are probably not strangers to paying $50 or more for a console or computer game. Contrast them to most casual gamers who have never paid a cent to play Bejeweled or Farmville, and the above starts to make a lot of sense. I suspect that Brain and Puzzle games appeal to an older audience which has less patients for the ads and simplistic gameplay usually associated with freemium titles.

While freemium has been a hot topic, the news is not all bad for fans and developers of traditional pay-to-play games. Those developers creating puzzle, racing or sports games for Android shouldn't assume at all that freemium is the only viable revenue model of the future. On the other hand, developers creating casual, casino or arcade games will want to seriously consider freemium if they haven't committed to it already.