Flurry: Freemium titles yield two-thirds of App Store gaming revenues
Freemium mobile games--i.e., titles that are free to download but offer premium in-app transactions like virtual currency and virtual goods--now generate 65 percent of gaming revenues in Apple's (NASDAQ:AAPL) App Store, according to new data published by mobile app analytics provider Flurry. As recently as January 2011, freemium iOS titles yielded 39 percent of App Store revenues, far behind traditional paid game downloads.
Click here to view a larger version of this chart.
Flurry reports that the number of consumers who spend money in a free game ranges from 0.5 percent to 6 percent, with spending influenced by the quality of the title and its core mechanics. While 90 percent of consumers are still not spending a dime on in-game transactions, Flurry notes that players who fall hard for a game spend far more than the 99-cent download fee the developer might have installed in lieu of pursuing the freemium approach.
"Since you gave away the game for free, your 'heavy spender' group can be sizable," states Flurry GM Games Jeferson Valadares on the firm's blog. "With games often occupying more than 75 percent of all top 100 grossing apps in the App Store, [the freemium concept is] the single most dominating business model in the mobile apps industry today."
Games remain the most popular mobile application category, with 64 percent of U.S. wireless subscribers playing mobile titles in the last 30 days, according to research published earlier this week by Nielsen. Gamers across Apple's iOS platform spend 14.7 hours a month playing mobile titles, while the average gamer spends 9.3 hours each month. Sixty-nine percent of iOS gamers download titles from the App Store--14 percent play preloaded games, 4 percent turn to web games and 3 percent play games transferred from another device.
Ninety-three percent of mobile subscribers who've downloaded a premium app in the last 30 days said they would pay for mobile games, outpacing all other categories, Nielsen adds. Entertainment apps are next at 87 percent, with productivity apps and maps/navigation/search apps tied at 84 percent each.
- read this Flurry blog entry
Nielsen: iOS users spend twice as much time playing mobile games
Flurry: iOS, Android games rake in $800M in 2010
PopCap: One third of adults play mobile games each month
Forecast: Mobile game ad spend to reach $900 million by 2015
Gartner: Mobile game revenues to top $5.6 billion this year