Gameloft, FDG Entertainment committed to freemium, premium app strategy

EA recently announced it would discontinue premium games in favor of free to play
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While some mobile publishers like Electronic Arts no longer plan to make premium games, at least two big publishers don't want to put all of their eggs into just the freemium basket. Gameloft and FDG Entertainment both revealed they are committed to offering both freemium and premium titles.

"We don't believe that either premium or paymium will completely die one day," explained Philipp Döschl, co-founder and executive producer of mobile gaming company FDG Entertainment. (Paymium titles are available for a small amount--a 99 cent game vs. a $5.99 game--but still offer in-app purchases.) "So, we'll keep doing games with this business model as well. What's important to us is to have a good balance, as every one of these three business models (freemium, paymium and premium) has its pros and cons," said Döschl.

Gameloft's VP of Publishing Baudouin Corman expressed a similar sentiment in an email to FierceMobileContent. "In 2013, a majority of our titles will be free-to-play, but we will still launch some paymium titles throughout the year."

Gameloft offers a mix of titles ranging from free to $6.99, but most of its bestselling apps are currently free titles, with only three of its top 20 bestselling apps in the App Store falling under the premium category. This kind of split isn't surprising given that last month a report from Distimo revealed that only 24 percent of iPhone app revenue came from paid apps.

"We've been releasing free-to-play games on smartphones and tablets for two years now and today a majority of our revenue on these platforms is coming from IAP (in-app purchases) and advertising. Our players seem to love this model. We've seen an amazing adoption of our free-to-play titles and we will continue to launch deeper and more impressive free-to-play games," explained Corman.

This week, Gameloft launched Dungeon Hunter 4 as a freemium title with the option to make IAPs to buy in-game currency. The first two titles in the Dungeon Hunter series are premium titles, while Dungeon Hunter 3 and 4 use IAPs.

Moving forward, Corman said Gameloft will continue offering both types of titles.

FDG Entertainment's current hit is the paymium game Slayin, which is currently the No. 2 app on the App Store's top 10 paid apps list. Slayin costs 99 cents and incorporates IAPs.

"Nobody can deny the huge impact that free-to-play has had on the market. It changed a lot of things, starting from the audience right down to the way games are designed nowadays," said Döschl.

However, Döschl reaffirmed that offering a mix of free and paid titles is the best business model in the mobile gaming space. "We currently have a couple of free-to-play designed games in development, which will be released through the year. But we also have some major premium games such as Across Age 2 and Cornfox & Brothers' Oceanhorn, as well as paymium titles such as the recently released Slayin and Banana Kong or our upcoming tower defense game Crystal Siege," said Döschl.

Last week, gaming powerhouse Electronic Arts announced it would scrap the premium model going forward, opting only to release free-to-play mobile games. EA has previously sold a large assortment of premium titles including Tetris and Boggle. During the last three months of 2012, EA's most successful freemium title, The Simpsons: Tapped Out, generated over $23 million in revenue alone.

EA isn't alone in embracing the freemium model head on. Glu Mobile (NASDAQ:GLUU) only offers freemium titles and Zynga (NASDAQ:ZNGA) offers a freemium version of nearly all of its signature titles.

Related articles:
Electronic Arts ditches premium model for free-to-play mobile games in 2013
Distimo: In-app purchases pay off for iOS developers
In wireless, what is the conversion rate from free to paid?
Activision enters freemium mobile gaming market with 'Skylanders'
Forecast: In-game purchase revenues to reach $4.8B in 2016

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