15 ms·

The fall of Angry Birds

316 points by bootload 14y ago

deleted 14y ago
[deleted]
robryan 14y ago
Personally I get put off a bit by free to play. I expect to have the game pushing ads at me non stop or trying to get me to purchase things in game. Where as I associate a quality paid game to be clean and just giving me the game without all those other distractions. Granted I am sure there are some decent free to pay titles, just the mental impression I get before trying new games, based on past experience.
- soofaloofa 14y ago
  I agree. I don't want to buy a bag full of coins to defeat a monster. I want to play the game in full from the outset.
  - mdonahoe 14y ago
    You are a veteran video gamer. This is a different model of play from what you are used to. Many of the people playing these new style games haven't played many video games before.
- Splines 14y ago
  What's even worse are the paid games that also have "Buy 10000 coins" in IAP. At this point I have enough games to play and any games that have IAP consisting of energy/coins/diamonds/whatever I immediately avoid, even if it's a well-liked game. I don't have time for that sort of thing.
- highace 14y ago
  True... YOU expect the game to push ads at you or try to sell you things, because this is your domain. You look at it from a totally technical point of view, you have plenty of experience dealing with this sort of thing. Mr Smith the average app user on the other hand doesn't have this expectation, and if a little box pops up telling him he can upgrade his sword twice as quickly for just 99 cents, he just might do it..
  - SquareWheel 14y ago
    That scares the pants off me. I really fear games moving in this direction.
    - nkohari 14y ago
      If you think about it, though, most things are already sold this way. The people who are less engaged are subsidized by those who are more engaged. Mobile phones and broadband internet are good examples.
      - mertd 14y ago
        Is it really the case for broadband? I pay as much as the guy frantically torrenting day and night but right now I'm just commenting on a text-only website.
- egb 14y ago
  I've been building out free-to-play games that are purely ad-supported, with unobtrusive banners only, no interstitials. It's not as profitable as IAP or in-your-face ad-based games, but it seems to appeal to my target market. The problem is that to remain competitive, I'm feeling pushed to build an IAP game :-\
  - moultano 14y ago
    Do you have IAP just to remove the banners?
rjsamson 14y ago
"Last year I held a special webinar that was invite only and everyone had to sign an NDA before attending. On this webinar I explained the current state of the mobile game industry and my plans to dominate as an independent developer." For me, that quote about sums up the rest of the article. Too much arrogance in there for me.
- sausagefeet 14y ago
  I found that opening sentence pretty off putting too. The rest of the article seemed fairly handwavey.
- petercooper 14y ago
  Trey Smith is from the "Internet marketing" world and a friend of Frank Kern's. Now, I like these guys (as far as I can learn stuff from them for free - spending $10K for a "mastermind"..? nah ;-)) but they seem to take approaches that.. rub some people up the wrong way (and that's putting it lightly). Nonetheless, I've still found there's a lot to learn from their experiences even if the delivery is a bit.. slick.
  - gaius 14y ago
    So they're basically PUAs.
    - will_lam 14y ago
      No, they're not, although they did work with PUAs. The Verge did an editorial on them a while back. http://www.theverge.com/2012/5/10/2984893/scamworld-get-rich-quick-schemes-mutate-into-an-online-monster http://www.theverge.com/2012/5/10/2984893/scamworld-get-rich... While a bit slick/sleazy in their approach their work revolves around using social psychology principles (social proof, scarcity etc), conversion tricks, clever copy, giving away freebies in order to build up their email lists. These guys eventually upsell on their premium products for a ridiculous price whilst offering their digital product for a "limited time only" to convert users who've got a good amount of value from their give-away products. There's hardly any regulation in this industry and the FTC has come down hard on these guys on more than one occasion.
casca 14y ago
Trey bases his assessment on Apple's published "Top grossing" list. This is potentially problematic as it's not clear over what time period this is based or what other metrics Apple uses to put apps into this list. Apple, like the publishers would like to encourage people to spend more over time than just download free apps so they're incentivized to encourage the implication that in-app is the way to go. Perhaps Angry Birds is dropping on the pay charts because people are finally bored of the franchise? How many years and different ways will people pay to shoot slightly different pigs with birds?
- justjohn 14y ago
  I suspect at this point, everyone who currently owns an iOS device and wants Angry Birds has it. Their sales are mostly to new iOS device owners while new games can sell to everyone.
- mxfh 14y ago
  Angry Bird as a brand grew also outside the App Store. As long as you don't factor in the money made with licenses on cups, toys...; this analysis based only on App Store revenue just falls short. Simply put, you don't need to make money in the AppStore (and hand over the a huge amount of that to Apple) when you can monetize outside of it.
- zabar 14y ago
  Yes, the reason why Angry Bird is not in the top grossing app is because they already dominate the market. This metric is based on the number of new install on the last week or so. The fact that they are still #2 of paid app (also a metric on the last month or so) means that they monetize pretty well with in app purchase already.
Retric 14y ago
The problem with FTP games is they miss a huge segment of the market. I have spent thousands on games, but less than 20$ on free to play games because I dislike the gameplay compromises needed to support FTP. That said, the app store funnels things towards FTP games but a subscription based game-play is probably a better long term money maker.
- PJones 14y ago
  A subscription game only works if you're WoW. Virtually every other big name MMO since that has ended up free to play.
  - clarky07 14y ago
    EVE is still subscription based
    - krakensden 14y ago
      although their ISK<->subscription time market seems like a nice compromise- if you can grind, you can play for free. If you want to skip some grind, you can pay to get ahead. And no one feels like they're being fucked with by amoral Wharton grads.
  - Retric 14y ago
    MMO's transition to FTP but just because Everquest decided after 15 years including several that crossed the 50 million dollars in of subscription revenue mark and 18 paid expansions that the best way to milk the remaining value was FTP does not mean it's best to start there.
colinshark 14y ago
Free to play might ruin games. Games are supposed to be fun. In a free-to-play game, the game designer's goal shifts from fun to incremental revenue collection. I think it's an abusive dynamic between the game designer and the player. If free-to-play becomes the norm, we might wonder why games are not as fun anymore, without being able to put a finger on it.
- chucknelson 14y ago
  I agree. While all of these pseudo-gambling games have been common place on PCs and the web for going on a decade (maybe more?), it's sad to see it start leaking into traditional game spaces as well. iOS is basically brand new, so maybe it was inevitable for these types of games to take over. I'm interested to see what happens in the next console generation - it might be a sad state of affairs beyond big-budget AAA titles.
  - Splines 14y ago
    It's truly unfortunate. If the money is really in F2P (and I think it is), I would hate to see "core" developers like Epic/Valve/ID integrate those features into their games because it makes business sense. Yes, TF2 is F2P, but I think they've done it in a fairly tasteful manner. The MvM stuff with tickets is skirting the edges a little bit, but time will tell how it all turns out.
    - mdonahoe 14y ago
      I like that MvM costs money. It's a simple way to ensure you are getting paired up with people who are dedicated to finishing the match.
- tedsuo 14y ago
  Hmmm, I'm not entirely sure, though I also don't like the model. I have fond memories of stuffing quarters into arcade games, a "pay to play" model that's even more direct in it's incremental revenue collection. Yet that payment model did not lead to bad gameplay, even though it did limit the types of games that were created at the time. Possibly free-to-play is different, certainly it doesn't have the same requirement of keeping the gameplay fast-paced, so it's possible to make a boring one. But there are plenty of boring flat rate games as well. I wonder what people growing up on this game model will think about it?
dasil003 14y ago
I have a feeling that everything he's saying is true, and it makes me very sad.
timmaah 14y ago
They are making up for it in merchandise. I have been touring the US this summer and have been amazed by the number of people wearing Angry Birds shirts. Even grown men. Walmart has huge Angry Birds signs right next to established brands like Levi and Nike.
mdkess 14y ago
I really don't like free to play games, as they're implemented now. The current strategy is simply "pay to progress" rather than to unlock more functionality. I was playing this game called Tiny Tower, and in it, you could pay to finish building a room. If you paid for the room, you ... had another room. You could then pay for another room. The dynamic of the game didn't change, things just moved along. Even without this, because so few people pay anything, the dynamic of the in app purchases is skewed so that you have to spend a ton of money to get anything out of your purchases (people willing to pay are willing to pay a lot, apparently). So people like me, willing to spend $5-$10 on a fun phone game but not $50, are sort of left behind.
gingerlime 14y ago
Is it just me or did the game market become much more sinister than it used to be? It's all about getting people effectively addicted to make more money out of them. Give them a taste for free, once they're hooked, start cashing in on those poor addicts.
- dmethvin 14y ago
  It does seem sad. So many problems to be solved in the world, but the things getting financial reinforcement and attracting technical talent are compulsive gaming and nanosecond-level stock trades that are unrelated to productive work. Good thing Farmville wasn't around in the 1960s, we'd have never gotten to the moon.
- tsantero 14y ago
  Calling the game market "sinister" borders on hyperbole. Horia Dragomir and Stephanie Kaiser from Wooga gave a presentation[0] on metrics driven game development at GOTO Copenhagen earlier this year. Through the lens of one of their more popular franchises "Monster World", they discussed, among other things, A/B testing and the surprisingly short life (days to weeks) of a game feature before it becomes irrelevant. Nothing in their talk suggested late night meetings in dark corners, plotting to turn their users into addicts. Rather, they discussed adapting to rapidly changing trends and patterns--which sometimes but not always included introducing new in-game purchase items. If on the surface the game industry as a whole appears to you to be an online equivalent of a casino, thats fine. What I see are dedicated and passionate engineers trying to ensure the survival a product in which they've dedicated years of their lives to getting right, by employing many of the same techniques nearly every other user facing tech company uses everyday, and I for one am not ready to cast the first stone and accuse entire industries of moral bankruptcy. [0] http://gotocon.com/cph-2012/presentation/The%20Metrics%20Design%20Pattern http://gotocon.com/cph-2012/presentation/The%20Metrics%20Des...
  - Wilya 14y ago
    There are surely very dedicated people working in some casinos. That doesn't have anything to do with them doing interesting stuff. And the fact that they use "what every other user facing tech company uses" is exactly the problem. I like and use A/B testing, but it's purpose as a tool is to take decisions based on what extracts the more money from users. There's no dark corner, but the goal is definitely the same. And it's not exactly something that I want to associate with games. The fact that your whole post, and a big part of the link you give, is as much applicable to selling games as to selling rocking chairs or any random saas product is exactly the problem. Marketing and sales come first, game development is merely an afterthought.
J0415 14y ago
OT, but in CSR Racing and many "pay to avoid waiting" games, there's actually a bug where if you move forward the time on your device, the game thinks the time has passed and gives you the free gas.
- andyking 14y ago
  But then, the time is wrong on your phone - which could cause problems far worse than "having to wait for a new feature on a mobile game."
ynniv 14y ago
Free to play is the modern coin-op. Sure, it can ruin a game - anything can. Executed properly you'll find a mechanic of variable pricing based on a customer's interest in your product. If someone cares more, they (can) pay more. Who could ask for a better pricing model?
petercooper 14y ago
There are some interesting insights in here, but I think it's a bit like talking about the "fall" of Harry Potter or the "fall" of Star Wars. People get bored of particular entertainment franchises and icons and move on to the next thing. While there's undoubtedly more to milk from Angry Birds (especially if iOS devices get new innovations they can lean on), they'd better be working on new franchises that could be even bigger.
tsantero 14y ago
>> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like. I would love to analyze the in-game purchase data across multiple free-to-play games on multiple platforms (e.g. facebook, app store, etc) in order to see the distribution of user spending habits. While I'm sure there are power users who spend magnitudes more than the average, I'm skeptical that they're the main driver of revenue. What I'd like to see is the average % of users who make in-game purchases, the average in-game purchase over time, frequency of purchases and what % of total revenue the average represents. Unfortunately, I don't think Zynga et al will be releasing this data publicly anytime soon.
- patio11 14y ago
  I'm skeptical that they're the main driver of revenue. Your skepticism is founded on a prediction about a measurable feature of material reality, right? Your prediction is catastrophically inaccurate. http://casualconnect.org/lectures/games-for-gamers/virtual-goods-for-core-gamers-emily-greer-anthony-pecorella/ http://casualconnect.org/lectures/games-for-gamers/virtual-g... (Particularly slides 16, 17.) http://gigaom.com/2011/07/25/game-devs-looking-for-revenues-go-whale-hunting/ http://gigaom.com/2011/07/25/game-devs-looking-for-revenues-... http://www.quora.com/Social-Gaming-Startups-and-Companies/What-is-to-good-strategy-to-deal-with-ever-growing-importance-of-whales http://www.quora.com/Social-Gaming-Startups-and-Companies/Wh... Feel free to take anyone in the industry out to coffee if you want confirmation.
  - tsantero 14y ago
    Thank you for the links, but in the future don't put words in my mouth and then use them as a basis to insult me.
    - patio11 14y ago
      My inclination when people feel insulted is generally to apologize, but I've re-read my comment twice, and I cannot apologize because I am not contrite. I neither put words in your mouth nor insulted you. You can choose to feel insulted regardless, like you could choose to feel insulted if a teacher said "Nope, there is in fact no carbon in a water molecule -- here's some resources or talk to a chemist and they'll set you straight", but that is entirely under your control. Prior to deciding to become insulted, I might suggest pondering "Do I want to commit to routinely being unhappy when soliciting information about subjects I purport to care about from people who know more about them than I do?"
Zenst 14y ago
Saw a friend of mine the other say, he had a angry birds teeshirt on. He has never played it ever in his life nor even knew it was a game, just liked the teeshirt. I showed him the game, involving the killing of birds and pigs and he was not phased in any way but still likes his teeshirt. Apart from that any old death of Tetris type article were you change the title to angry birds will be relevant in such matters of simple fun games and there lifespan.
- grhino 14y ago
  If you account for merchandising, I wonder if Angry Birds is beating the top free to play app?
  - Zenst 14y ago
    More than likely and does somewhat indicate a new mentality eventualy towards some games which are used in effect as marketing material to help promote and sell the mechandising aspects.
  - yskchu 14y ago
    I'm sure it is, there's so much Angry Bird stuff around now Just today: Passed by a Samsung Promotion, play angry bird games on SmartTV, win Angry Bird merchandise The cable car in Singapore has "Angry Bird" promotion cars with Angry Bird Decorations; has whole shop dedicated to Angry Birds Merchandise Local supermarket, spend $$$, collect stickers, redeem Angry Birds
ckayatek 14y ago
I see minecraft pocket edition on that list as well and it is neither a $0.99 game or a free to play. I think this is evidence that people are willing to pay for a well-made product. For me this article is simply a rehash of Zynga's whale strategy and we know how manipulative and frankly evil that is.
- giulianob 14y ago
  Minecraft already has brand recognition though. A lot of these other games don't yet.
  - tbeseda 14y ago
    And that recognition is among a less casual, often "hardcore" audience.
    - rocky1138 14y ago
      No way. It's children. Boys age 9-13 are Minecraft-crazy. Anyone with a server can tell you that.
Timothee 14y ago
I dislike free-to-play games because they tend to distort the gameplay towards paying additional in-game credits. It also feels a bit like printers: you get the printer for cheap but pay a lot on inks. Here they lure people in with a well-designed free game that lives on in-app purchases (IAP). That being said, the revenues discussed in this post are crazy. On a side-note, I wish the App Store allowed to filter out by apps that have or not IAP. I really don't mind paying for apps and games but sometimes there will be a cool free game available. Nowadays most games are free but with many IAP. If I see a high-ranked free game I tend to turn around when I see it has IAP because I know the gameplay will be around buying more stuff. On a second side-note, I wouldn't mind the fall of Angry Birds. IMO, the game has received a disproportionate amount of success and the merchandising all over the place has been ridiculous (e.g. a "Angry Birds" Roku box? That makes no sense). The game is ok but not very original or entertaining (again, IMO) but the milking of the brand has been the worst part of it.
- kmfrk 14y ago
  I imagine that all it takes is for a few media outlets to pick up on the advent of IAP for Apple to address it. It's becoming somewhat of an ethical problem for them. Maybe we'll see an equivalent of The Great Google Purge.
  - akldfgj 14y ago
    It's interesting that the App Store used to explicitly ban upsells ("This feature requires MyApp Pro") in apps, since it is a customer-hostile feature, until they realized they could make a fortune with it.
- michaelt 14y ago
  Do you also object to games with a free 'lite' version and a paid 'full' version, where the two are separate app store entries, or is it only games where you have to pay for the full version via IAP that you dislike?
  - Timothee 14y ago
habosa 14y ago
$12,000,000 a month? Holy shit. I had no idea the ceiling was that high. I made a free to play Android game that took me 6 weeks and made about $10 total... I guess I need to give this another shot.
- mdonahoe 14y ago
  They probably spend $4mil/month on advertising to drive new players to the game. That's how this all works.
jader201 14y ago
Re: "The fall of Angry Birds", this article should be titled "The fall of paid games, the rise of IAPs". Angry Birds, as a franchise, is doing anything but falling. Just look around the next time you go to a Walmart or Target. Angry Birds lunch boxes. Angry Birds Halloween costumes. And yes, Angry Birds Cheese Nips[1], which my kids are consuming even as we speak. And it's only inevitable that Rovio is or will be working on an Angry Birds game that takes advantage of IAPs over an up front charge. [1]http://www.walmart.com/ip/Nabisco-Cheese-Nips-Angry-Birds-Cheddar-Baked-Snack-Crackers-10.5-oz/21000202 http://www.walmart.com/ip/Nabisco-Cheese-Nips-Angry-Birds-Ch...
- pbhjpbhj 14y ago
  Or perhaps just "the fall of transparent gaming costs". Apparently the games are still paid, just pay-as-you-go without any clear/simple way to determine how much the game will cost to complete?!
  - orangecat 14y ago
    Exactly, and we pretty much have ourselves to blame. We prefer to get ripped off via "free" or low upfront costs, or "sales" taken off ridiculously inflated prices. Honest pricing is generally not rewarded; look at the Nexus One, or JC Penny's attempts at transparency.
- bmh100 14y ago
  But the current article title is so much more intriguing dna references a well-known brand. I would love to see an A/B test comparing the two, however.
TWAndrews 14y ago
I hate, hate, hate games that use in-app purchases as a significant part of game play (and removing grinding qualifies, imo), to the point that I look to see what the top in-app purchase are and won't download games which let you buy in-game currency.
kylec 14y ago
There really should be a Game Store separate from the App Store. Currently, if you're not looking for a game, pages like "Top Grossing Apps" are completely useless in the App Store.
MrFoof 14y ago
People wonder where video game arcades went after the console market started to really gain traction in the early to mid 1990s (and really got rolling with the Playstation 2). Outside of Japan, they largely went away, but now they're back: on your mobile device. We've gone right back to feeding tokens (in-game credits) because now you can distribute the equivalent of an single-game arcade cabinet -- a game that is designed to optimally take in cash at a given rate -- to every mobile device. A good analogue would be to make a beat-em up arcade cabinet that let you start out for nothing, but when you inevitably get KO'd, you have to feed it a few tokens for the privilege of continuing before the 15 second countdown elapses and you have to start from the beginning.
- pbhjpbhj 14y ago
  Did any arcade games do the equivalent of allowing IAP - like get a better weapon or new super move for 1 credit?
  - bronson 14y ago
    "Insert Coin to Continue" seems like an IAP.
    - joering2 14y ago
      I think that's different. In arcade's example, the only reason you needed a coin is when you have used all your lives. Now, if you had better skills, you could get through the entire game without a single additional coin. In IAP module, the game is designed so there is no chance (at least for 99% players) to go through the game without purchasing the stuff on the go. Take "where is my water" for example. You can continue game as long as you keep scoring all 3 coins on each level. If you miss even one coin, after many levels you will be missing that coin to open another level. There you have an option to open the level for $$$ Now, some of those coins, in my gaming experience, were impossible to score, but that's a different story...
      - Domenic_S 14y ago
jere 14y ago
>Phase 1 of app store monetization was Premium games (.99 titles) I have no doubt this is how it works, but I never thought I would see the day when something that costs a dollar is considered premium.
- DLWormwood 14y ago
  I came here to post this same thing… Except for a couple of holdouts like Square Enix, the notion of paying more for something non-consumable vs. consumable seems to be at an end in the software space.
  - rhizome 14y ago
    I wonder if there's any economic theory on circumventing or avoiding a pricewise race to the bottom that would be relevant here.
drue 14y ago
If I wasn't living it I would believe this to be The Onion or something out of 1984.
cletus 14y ago
I don't dispute the OP's argument. It just makes me sad. One of the things I really used my iPad for a lot is games. The distribution mechanism and purchasing system are super-simple. You could (and can) get high-quality games for a low price. I see I've spent 100+ hours playing Bejeweled 3 alone. Yet the trend has clearly gone towards in-app purchases. I tried some golf game (Tiger Woods something?) and it was constant nagging for in-app purchases. That got deleted in about 2 minutes. Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most. And I've tried a bunch (spending no real $$$) to see (I'm a sucker for world-building games and there's a dearth of those, sadly). The second category (normal games with in-app purchases) create the wrong incentives. Whereas Angry Birds originally spread because it was a hugely fun game, the game developer is incentivized to make you fork over more money, typically at the expense of the game itself. It saddens me that Angry Birds has gone the in-app purchase route too. Sadly the genie is out of the bottle. Any sensible game developer will go this route. Add to this the "social" layer being foisted on users and it's really looking like dark days ahead for gaming.
- cageface 14y ago
  And this is exactly why I'm predicting a crash in the mobile games market. People are going to figure out sooner or later that they're being exploited and not actually having much fun and the whole house of cards is going to come tumbling down. It's actually worse than that because games make up the bulk of the app stores' revenue. Zynga was just the bellwether here.
  - joering2 14y ago
    No, I would rather say as app games market evolve, the developers are moving to where the money is being made: on inapp purchases. Now, while most app games users will not like this idea and do not like in app purchases-based games, to the developers the 1 or 10 or whatever % of those who make purchases counts the most, and those are the ones who they will target their products to. I wouldnt say it will crash the mobile games market; I would rather say the ratio of all the games designed in ".99 cents" a pop scheme will be on rapid decline...
Xcelerate 14y ago
I am absolutely baffled that in-app purchases are so popular. For me, I would rather pay a one time fee for an excellent game than be "nagged" to move myself ahead in the game. I play Tetris occasionally on Facebook, and I get so annoyed with the constant spam for extra coins, dollars, armor, line speed upgrades, etc. I'd rather pay $40 and get the game in pristine finished form. I don't know what to make of it, really. I'm usually decent at predicting what will be popular, but this time I completely missed the boat. It really makes me kind of sad. I remember when I was little I would get a game like Zelda for GameBoy for $30. That game obviously had tons of work put into it and gave me endless hours of enjoyment. Games for phones seem to lack this kind of depth.
- Silhouette 14y ago
  I'm 100% with you: personally, I would happily pay a substantial price for a good quality game, which I could install on whichever computer I want without it messing anything up, and which had a single-player focus. Sadly, hardly anyone makes games like that any more. It is, unfortunately, the logical conclusion of Internet piracy. The pirates can talk about how a ripped off copy isn't really a lost sale and they wouldn't have paid anyway until they're blue in the face, but the fact is that someone has to pay for the games these people obviously enjoy so much. Given that one-off big purchases of games seem to have at most 5-10% efficiency in terms of people buying legal copies, the people making the games are looking for alternative models where the pirates can't just copy the whole thing, which means something where you take the money interactively or something where you never actually get most of the game data installed locally so you can't copy it. And that means in-app purchases for the little guys and things like DLC and MMOGs for the big players. And they still throw in increasingly obnoxious DRM for good measure, presumably because the net win from making it more difficult or time-consuming for some people to get a pirate copy outweighs the loss of custom from people like me who would buy a good game without the junk but won't spend that kind of money on software we aren't actually going to own/control. In short, if you miss paying a fair price for a finished game, blame the pirates, and blame the short-sighted executives at the big game companies who couldn't find a better way to respond to those pirates than screwing their legitimate customers.
georgemcbay 14y ago
Free to Play is certainly popular now, but I'd be shocked if it were still popular in a year. It is exactly the sort of model that IME works while it is semi-novel but creates a model fatigue in customers that results in eventual backlash of even those who accept it at first. So, he's right, but F2P model will also eventually "fall".
deleted 14y ago
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egb 14y ago
I'm curious why people seemed to love and/or idolize Team Fortress 2 going free to play, but there seems to be a negative vibe surrounding it for mobile gaming... One of many mentions on their 12x revenue increase from F2P: http://games.slashdot.org/story/12/03/08/2148224/valve-switching-team-fortress-2-to-free-to-play-increased-revenue-twelvefold http://games.slashdot.org/story/12/03/08/2148224/valve-switc...
- erikpukinskis 14y ago
  I think it's because in TF2 you get a super fun, deep game that you can play for years and have a ton of fun and not pay a penny. You only pay for "extras". In FarmVille, when you use up your virtual money you can't play anymore. You can't plant anything, you can't harvest anything, you can't plow anything. You just have to wait a few hours until your plants grow. So your choice is make an IAP or literally watch grass grow. And even of you could grind through that and keep playing (say by mining gol laboriously)... TF2 is just a more complex, more interesting game. FarmVille and the like seem to exist only to get you to spend money compulsively.
- duskwuff 14y ago
  Because TF2 has made a very specific effort to avoid "pay-to-win" gaming. Most of the expensive items in TF2 are largely cosmetic; all of the seriously game-changing items can be crafted, found, or obtained through unlocks.
  - cshesse 14y ago
    Plus, TF2's stock weapons are generally the most versatile, so there are few if any game-changing items.
ww520 14y ago
Curious about the credit management mechanism. For the unused credits (coins), can the users ask for refund? Or they expire after some time, just like the cell phone purchased minutes.
- rhizome 14y ago
  Refund?!
m_myers 14y ago
An interesting variation on F2P is the one used by World Golf Tour [1], which I've been playing a bit recently. Instead of forcing users to pay real money to get better equipment, it has another means of earning credits: viewing advertisements. That means that a) I don't feel like I'm actually spending money (except opportunity cost), and b) they can show pretty well-targeted ads to users who are requesting to see them. I don't know the financial details, but I'd guess they can sell for a pretty decent rate. And you have to view quite a lot of them to get as many credits as you could have bought outright for $10. As an added bonus to them, relying on ads means I have to disable AdBlock for their entire website. [1]: http://wgt.com http://wgt.com
digitalengineer 14y ago
How will this effect Google's Mobile Advertising Strategy? As the numbers show for almost all free Apps, the In-App-Ad's are being replaced by In-App-Purchasing...
beggi 14y ago
I think this wave of Free-to-play games with incessant requests to gamers to buy in-app coins and whatever might lead to a wave of expensive (like $30-$60, similar to the desktop market) up-front games that will have a promise of no in-app purchases. I know I'm at least, and I suspect a lot others, are yearning for the old days of Sim City and Sim Tower where you didn't have to pay extra for specific buildings.
andr3w321 14y ago
It makes sense that the free apps are making more when you think about it. They're getting the most money out of each customer. Every customer is not worth 99 cents. Some are worth a LOT more. Just like when you go overseas and the locals have on cheap price for locals and a much higher price for the rich foreigners. There have to be other ways of achieving the same end goal however without the constant nagging. Has anyone tried a game where people pay by the hour for instance? First hour free?
anovikov 14y ago
I don't see any failure there. They have relatively few installs, but near top revenue, meaning: nearly everyone have already installed their stuff, and stuck with it, and spend a lot there. They just turned into an established business, maybe no longer a 'startup'. Falling growth rate is inevitable if you have already conquired the world.
webwright 14y ago
If you'd like to see the fall over time, here's a graph: https://skitch.com/webwright/eq2es/angry-birds-rank-history-app-annie https://skitch.com/webwright/eq2es/angry-birds-rank-history-... The blue line is the overall grossing rank over time.
stcredzero 14y ago
> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like. Data? Citation? I'm genuinely curious. Is this now the common wisdom for indy games?
dark_element 14y ago
Interesting fact on how desperate people can get to be better at games. The lack of in app/game purchases in MMOs created a whole industry called "Gold farming" http://en.wikipedia.org/wiki/Gold_farming http://en.wikipedia.org/wiki/Gold_farming
theDaveB 14y ago
I read (might have been on here) that Angry Birds Space made $10 million dollars in its first week of release. I have 2 games on the app store and so far have kept away from IAP as I hate it myself but thinking of implementing it on my next game. Dave
podperson 14y ago
I hope the trend proves to be short lived, and suspect it will be.
mkale 14y ago
IAP games are like going to the arcade and paying some small amount per play, rather than buying the game upfront and getting to play as much as you want.
swombat 14y ago
Forget about whether IAPs are bad. Did nobody pick up on this? > In the last month, this single game generated over $12,000,000 on iOS alone. They have not ported the game to Android yet. > If this is the case and it holds ranking for the rest of the year, then this single game is worth $109,500,000 PER YEAR on the low side. Holy fucking shit. $100m a year of high-margin sales for a single iOS games? World of Warcraft makes, last time I calculated it, roundabout these amounts, and WoW is one of the most financially successful games ever and requires masses of investment in infrastructure, new content, community management, developers, and so on - so big it swallowed Blizzard whole for a while. If a silly, simple, stupid looking iOS game can make $100m a year of almost raw profit, this is... well, just mind-blowing, really.
- harpastum 14y ago
  $100m a year is clearly crazy money, but it's not quite at the scale of WoW yet. World of Warcraft subscribers have been declining steadily for the last couple years [1], but they still have ~9.1 million subscribers. The least a subscriber can pay is by buying in 6-month increments, which is 12.99 a month [2]. So, even though they're making less money than ever, 9.1 million subscribers at 12.99 per month is 1.4 Billion a year. [1] http://www.ign.com/articles/2012/08/02/world-of-warcraft-loses-subscribers http://www.ign.com/articles/2012/08/02/world-of-warcraft-los... [2] http://us.battle.net/support/en/article/payment-option-credit-card http://us.battle.net/support/en/article/payment-option-credi...
  - david_shaw 14y ago
    9,100,000 * 12.99 == 118,209,000 So, unless my math's off, I think that's pretty close.
crazygringo 14y ago
I wonder if the whole reason IAP is winning... is because trial periods aren't being done? Wouldn't it be a lot simpler to make Angry Birds free, have only the first 20 levels be playable, then pay $9.99 for the remaining 80 levels? (I'm making these numbers up BTW.) Obviously IAP makes a lot of sense for Farmville-style games that are all about "objects", but when tacked onto Angry Birds Space, or most games really, it feels like the company is just trying to take advantage of you. Why don't we see any "free trials" like this in the App Store? Is it against Apple TOS or something? Or have studies shown it just doesn't work? (And I don't mean the free "lite" versions of games -- those are annoying because you lose all your progress and have to start the full version from zero.)
- mdonahoe 14y ago
  IAP wins because the developer can capture more of the area under the curve for what people are willing to spend to the play the game. With traditional games, you either pay the $10 or you dont. Once you have bought the game, you are done. Maybe you can buy an expanion pack later, or a tshirt, but the developer literally is out of ways for you to spend money. With IAP, players can pay as little or as much as they want. The danger is that the game can become less fun if you are always being prompted to spend more money. But I think there are games that do it well. I have spend over $100 playing Valve's TF2, a game that is free-to-play, and I don't regret it.
CmdrKrool 14y ago
Funny thing I've found myself doing recently, when I'm hooked in to one of these horrible, grindy, submarine IAP games which I should know better than to keep loading up but hey I'm only human. Since my iPad is jailbroken I just SSH in, find the game directory and more often than not find my stats sitting there in a simple .plist file (maybe a binary plist, but then you just use the appropriate editor), make myself an in-game millionaire, load it back up and enjoy the game at max power for a few minutes before turning it off and never thinking about it again, a 'weight' lifted off my shoulders. It shocks me, how when the grind is suddenly removed, my interest in such a game that minutes before I had been feverishly, morosely addicted to, /completely evaporates/. It's funny how me doing this is quite comparable to piracy, but - rightly or wrongly - I feel almost no guilt about doing this because by the time I've got to this point I've lost all respect for the game anyway. It's ironic how Apple's locking down of the device is enough for most developers not to bother obfuscating their game save files so that if you have taken the trouble just for that jailbreak step, you're unlikely to meet much further resistance. And finally when I do run into a game which has apparently taken cursory defensive steps such that my crude hackery only succeeds in stuffing everything up and losing whatever progress I did have, this too turns out to be funny. As I have no impulse to start playing from the beginning again, I breathe that very same sigh of relief, and forget all about it. Win-win.
- mdonahoe 14y ago
  There are forum posts and youtube videos for how to cheat in most IAP games. Developers are learning to fight against it, but it funny how much effort goes into making sure some bits dont get flipped.
minikomi 14y ago
Just as a point of reference: the top 15 grossing apps in Japan at the moment are free to play but with in app purchase battle/card social games. I also work making them. 1-5 http://i.imgur.com/cuzGb.png http://i.imgur.com/cuzGb.png 6-10 http://i.imgur.com/ckpIC.png http://i.imgur.com/ckpIC.png 11-15 http://i.imgur.com/jzFWa.png http://i.imgur.com/jzFWa.png #16 is Line.

316 points by bootload 14y ago

deleted 14y ago

[deleted]

Personally I get put off a bit by free to play. I expect to have the game pushing ads at me non stop or trying to get me to purchase things in game. Where as I associate a quality paid game to be clean and just giving me the game without all those other distractions. Granted I am sure there are some decent free to pay titles, just the mental impression I get before trying new games, based on past experience.

soofaloofa 14y ago
I agree. I don't want to buy a bag full of coins to defeat a monster. I want to play the game in full from the outset.
- mdonahoe 14y ago
  You are a veteran video gamer. This is a different model of play from what you are used to. Many of the people playing these new style games haven't played many video games before.
Splines 14y ago
What's even worse are the paid games that also have "Buy 10000 coins" in IAP. At this point I have enough games to play and any games that have IAP consisting of energy/coins/diamonds/whatever I immediately avoid, even if it's a well-liked game. I don't have time for that sort of thing.
highace 14y ago
True... YOU expect the game to push ads at you or try to sell you things, because this is your domain. You look at it from a totally technical point of view, you have plenty of experience dealing with this sort of thing. Mr Smith the average app user on the other hand doesn't have this expectation, and if a little box pops up telling him he can upgrade his sword twice as quickly for just 99 cents, he just might do it..
- SquareWheel 14y ago
  That scares the pants off me. I really fear games moving in this direction.
  - nkohari 14y ago
    If you think about it, though, most things are already sold this way. The people who are less engaged are subsidized by those who are more engaged. Mobile phones and broadband internet are good examples.
    - mertd 14y ago
      Is it really the case for broadband? I pay as much as the guy frantically torrenting day and night but right now I'm just commenting on a text-only website.
egb 14y ago
I've been building out free-to-play games that are purely ad-supported, with unobtrusive banners only, no interstitials. It's not as profitable as IAP or in-your-face ad-based games, but it seems to appeal to my target market. The problem is that to remain competitive, I'm feeling pushed to build an IAP game :-\
- moultano 14y ago
  Do you have IAP just to remove the banners?

rjsamson 14y ago

"Last year I held a special webinar that was invite only and everyone had to sign an NDA before attending. On this webinar I explained the current state of the mobile game industry and my plans to dominate as an independent developer." For me, that quote about sums up the rest of the article. Too much arrogance in there for me.

sausagefeet 14y ago
I found that opening sentence pretty off putting too. The rest of the article seemed fairly handwavey.
petercooper 14y ago
Trey Smith is from the "Internet marketing" world and a friend of Frank Kern's. Now, I like these guys (as far as I can learn stuff from them for free - spending $10K for a "mastermind"..? nah ;-)) but they seem to take approaches that.. rub some people up the wrong way (and that's putting it lightly). Nonetheless, I've still found there's a lot to learn from their experiences even if the delivery is a bit.. slick.
- gaius 14y ago
  So they're basically PUAs.
  - will_lam 14y ago
    No, they're not, although they did work with PUAs. The Verge did an editorial on them a while back. http://www.theverge.com/2012/5/10/2984893/scamworld-get-rich-quick-schemes-mutate-into-an-online-monster http://www.theverge.com/2012/5/10/2984893/scamworld-get-rich... While a bit slick/sleazy in their approach their work revolves around using social psychology principles (social proof, scarcity etc), conversion tricks, clever copy, giving away freebies in order to build up their email lists. These guys eventually upsell on their premium products for a ridiculous price whilst offering their digital product for a "limited time only" to convert users who've got a good amount of value from their give-away products. There's hardly any regulation in this industry and the FTC has come down hard on these guys on more than one occasion.

casca 14y ago

Trey bases his assessment on Apple's published "Top grossing" list. This is potentially problematic as it's not clear over what time period this is based or what other metrics Apple uses to put apps into this list. Apple, like the publishers would like to encourage people to spend more over time than just download free apps so they're incentivized to encourage the implication that in-app is the way to go. Perhaps Angry Birds is dropping on the pay charts because people are finally bored of the franchise? How many years and different ways will people pay to shoot slightly different pigs with birds?

justjohn 14y ago
I suspect at this point, everyone who currently owns an iOS device and wants Angry Birds has it. Their sales are mostly to new iOS device owners while new games can sell to everyone.
mxfh 14y ago
Angry Bird as a brand grew also outside the App Store. As long as you don't factor in the money made with licenses on cups, toys...; this analysis based only on App Store revenue just falls short. Simply put, you don't need to make money in the AppStore (and hand over the a huge amount of that to Apple) when you can monetize outside of it.
zabar 14y ago
Yes, the reason why Angry Bird is not in the top grossing app is because they already dominate the market. This metric is based on the number of new install on the last week or so. The fact that they are still #2 of paid app (also a metric on the last month or so) means that they monetize pretty well with in app purchase already.

Retric 14y ago

The problem with FTP games is they miss a huge segment of the market. I have spent thousands on games, but less than 20$ on free to play games because I dislike the gameplay compromises needed to support FTP. That said, the app store funnels things towards FTP games but a subscription based game-play is probably a better long term money maker.

PJones 14y ago
A subscription game only works if you're WoW. Virtually every other big name MMO since that has ended up free to play.
- clarky07 14y ago
  EVE is still subscription based
  - krakensden 14y ago
    although their ISK<->subscription time market seems like a nice compromise- if you can grind, you can play for free. If you want to skip some grind, you can pay to get ahead. And no one feels like they're being fucked with by amoral Wharton grads.
- Retric 14y ago
  MMO's transition to FTP but just because Everquest decided after 15 years including several that crossed the 50 million dollars in of subscription revenue mark and 18 paid expansions that the best way to milk the remaining value was FTP does not mean it's best to start there.

colinshark 14y ago

Free to play might ruin games. Games are supposed to be fun. In a free-to-play game, the game designer's goal shifts from fun to incremental revenue collection. I think it's an abusive dynamic between the game designer and the player. If free-to-play becomes the norm, we might wonder why games are not as fun anymore, without being able to put a finger on it.

chucknelson 14y ago
I agree. While all of these pseudo-gambling games have been common place on PCs and the web for going on a decade (maybe more?), it's sad to see it start leaking into traditional game spaces as well. iOS is basically brand new, so maybe it was inevitable for these types of games to take over. I'm interested to see what happens in the next console generation - it might be a sad state of affairs beyond big-budget AAA titles.
- Splines 14y ago
  It's truly unfortunate. If the money is really in F2P (and I think it is), I would hate to see "core" developers like Epic/Valve/ID integrate those features into their games because it makes business sense. Yes, TF2 is F2P, but I think they've done it in a fairly tasteful manner. The MvM stuff with tickets is skirting the edges a little bit, but time will tell how it all turns out.
  - mdonahoe 14y ago
    I like that MvM costs money. It's a simple way to ensure you are getting paired up with people who are dedicated to finishing the match.
tedsuo 14y ago
Hmmm, I'm not entirely sure, though I also don't like the model. I have fond memories of stuffing quarters into arcade games, a "pay to play" model that's even more direct in it's incremental revenue collection. Yet that payment model did not lead to bad gameplay, even though it did limit the types of games that were created at the time. Possibly free-to-play is different, certainly it doesn't have the same requirement of keeping the gameplay fast-paced, so it's possible to make a boring one. But there are plenty of boring flat rate games as well. I wonder what people growing up on this game model will think about it?

dasil003 14y ago

I have a feeling that everything he's saying is true, and it makes me very sad.

timmaah 14y ago

They are making up for it in merchandise. I have been touring the US this summer and have been amazed by the number of people wearing Angry Birds shirts. Even grown men. Walmart has huge Angry Birds signs right next to established brands like Levi and Nike.

mdkess 14y ago

I really don't like free to play games, as they're implemented now. The current strategy is simply "pay to progress" rather than to unlock more functionality. I was playing this game called Tiny Tower, and in it, you could pay to finish building a room. If you paid for the room, you ... had another room. You could then pay for another room. The dynamic of the game didn't change, things just moved along. Even without this, because so few people pay anything, the dynamic of the in app purchases is skewed so that you have to spend a ton of money to get anything out of your purchases (people willing to pay are willing to pay a lot, apparently). So people like me, willing to spend $5-$10 on a fun phone game but not $50, are sort of left behind.

gingerlime 14y ago

Is it just me or did the game market become much more sinister than it used to be? It's all about getting people effectively addicted to make more money out of them. Give them a taste for free, once they're hooked, start cashing in on those poor addicts.

dmethvin 14y ago
It does seem sad. So many problems to be solved in the world, but the things getting financial reinforcement and attracting technical talent are compulsive gaming and nanosecond-level stock trades that are unrelated to productive work. Good thing Farmville wasn't around in the 1960s, we'd have never gotten to the moon.
tsantero 14y ago
Calling the game market "sinister" borders on hyperbole. Horia Dragomir and Stephanie Kaiser from Wooga gave a presentation[0] on metrics driven game development at GOTO Copenhagen earlier this year. Through the lens of one of their more popular franchises "Monster World", they discussed, among other things, A/B testing and the surprisingly short life (days to weeks) of a game feature before it becomes irrelevant. Nothing in their talk suggested late night meetings in dark corners, plotting to turn their users into addicts. Rather, they discussed adapting to rapidly changing trends and patterns--which sometimes but not always included introducing new in-game purchase items. If on the surface the game industry as a whole appears to you to be an online equivalent of a casino, thats fine. What I see are dedicated and passionate engineers trying to ensure the survival a product in which they've dedicated years of their lives to getting right, by employing many of the same techniques nearly every other user facing tech company uses everyday, and I for one am not ready to cast the first stone and accuse entire industries of moral bankruptcy. [0] http://gotocon.com/cph-2012/presentation/The%20Metrics%20Design%20Pattern http://gotocon.com/cph-2012/presentation/The%20Metrics%20Des...
- Wilya 14y ago
  There are surely very dedicated people working in some casinos. That doesn't have anything to do with them doing interesting stuff. And the fact that they use "what every other user facing tech company uses" is exactly the problem. I like and use A/B testing, but it's purpose as a tool is to take decisions based on what extracts the more money from users. There's no dark corner, but the goal is definitely the same. And it's not exactly something that I want to associate with games. The fact that your whole post, and a big part of the link you give, is as much applicable to selling games as to selling rocking chairs or any random saas product is exactly the problem. Marketing and sales come first, game development is merely an afterthought.

J0415 14y ago

OT, but in CSR Racing and many "pay to avoid waiting" games, there's actually a bug where if you move forward the time on your device, the game thinks the time has passed and gives you the free gas.

andyking 14y ago
But then, the time is wrong on your phone - which could cause problems far worse than "having to wait for a new feature on a mobile game."

ynniv 14y ago

Free to play is the modern coin-op. Sure, it can ruin a game - anything can. Executed properly you'll find a mechanic of variable pricing based on a customer's interest in your product. If someone cares more, they (can) pay more. Who could ask for a better pricing model?

petercooper 14y ago

There are some interesting insights in here, but I think it's a bit like talking about the "fall" of Harry Potter or the "fall" of Star Wars. People get bored of particular entertainment franchises and icons and move on to the next thing. While there's undoubtedly more to milk from Angry Birds (especially if iOS devices get new innovations they can lean on), they'd better be working on new franchises that could be even bigger.

tsantero 14y ago

>> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like. I would love to analyze the in-game purchase data across multiple free-to-play games on multiple platforms (e.g. facebook, app store, etc) in order to see the distribution of user spending habits. While I'm sure there are power users who spend magnitudes more than the average, I'm skeptical that they're the main driver of revenue. What I'd like to see is the average % of users who make in-game purchases, the average in-game purchase over time, frequency of purchases and what % of total revenue the average represents. Unfortunately, I don't think Zynga et al will be releasing this data publicly anytime soon.

patio11 14y ago
I'm skeptical that they're the main driver of revenue. Your skepticism is founded on a prediction about a measurable feature of material reality, right? Your prediction is catastrophically inaccurate. http://casualconnect.org/lectures/games-for-gamers/virtual-goods-for-core-gamers-emily-greer-anthony-pecorella/ http://casualconnect.org/lectures/games-for-gamers/virtual-g... (Particularly slides 16, 17.) http://gigaom.com/2011/07/25/game-devs-looking-for-revenues-go-whale-hunting/ http://gigaom.com/2011/07/25/game-devs-looking-for-revenues-... http://www.quora.com/Social-Gaming-Startups-and-Companies/What-is-to-good-strategy-to-deal-with-ever-growing-importance-of-whales http://www.quora.com/Social-Gaming-Startups-and-Companies/Wh... Feel free to take anyone in the industry out to coffee if you want confirmation.
- tsantero 14y ago
  Thank you for the links, but in the future don't put words in my mouth and then use them as a basis to insult me.
  - patio11 14y ago
    My inclination when people feel insulted is generally to apologize, but I've re-read my comment twice, and I cannot apologize because I am not contrite. I neither put words in your mouth nor insulted you. You can choose to feel insulted regardless, like you could choose to feel insulted if a teacher said "Nope, there is in fact no carbon in a water molecule -- here's some resources or talk to a chemist and they'll set you straight", but that is entirely under your control. Prior to deciding to become insulted, I might suggest pondering "Do I want to commit to routinely being unhappy when soliciting information about subjects I purport to care about from people who know more about them than I do?"

Zenst 14y ago

Saw a friend of mine the other say, he had a angry birds teeshirt on. He has never played it ever in his life nor even knew it was a game, just liked the teeshirt. I showed him the game, involving the killing of birds and pigs and he was not phased in any way but still likes his teeshirt. Apart from that any old death of Tetris type article were you change the title to angry birds will be relevant in such matters of simple fun games and there lifespan.

grhino 14y ago
If you account for merchandising, I wonder if Angry Birds is beating the top free to play app?
- Zenst 14y ago
  More than likely and does somewhat indicate a new mentality eventualy towards some games which are used in effect as marketing material to help promote and sell the mechandising aspects.
- yskchu 14y ago
  I'm sure it is, there's so much Angry Bird stuff around now Just today: Passed by a Samsung Promotion, play angry bird games on SmartTV, win Angry Bird merchandise The cable car in Singapore has "Angry Bird" promotion cars with Angry Bird Decorations; has whole shop dedicated to Angry Birds Merchandise Local supermarket, spend $$$, collect stickers, redeem Angry Birds

ckayatek 14y ago

I see minecraft pocket edition on that list as well and it is neither a $0.99 game or a free to play. I think this is evidence that people are willing to pay for a well-made product. For me this article is simply a rehash of Zynga's whale strategy and we know how manipulative and frankly evil that is.

giulianob 14y ago
Minecraft already has brand recognition though. A lot of these other games don't yet.
- tbeseda 14y ago
  And that recognition is among a less casual, often "hardcore" audience.
  - rocky1138 14y ago
    No way. It's children. Boys age 9-13 are Minecraft-crazy. Anyone with a server can tell you that.

Timothee 14y ago

I dislike free-to-play games because they tend to distort the gameplay towards paying additional in-game credits. It also feels a bit like printers: you get the printer for cheap but pay a lot on inks. Here they lure people in with a well-designed free game that lives on in-app purchases (IAP). That being said, the revenues discussed in this post are crazy. On a side-note, I wish the App Store allowed to filter out by apps that have or not IAP. I really don't mind paying for apps and games but sometimes there will be a cool free game available. Nowadays most games are free but with many IAP. If I see a high-ranked free game I tend to turn around when I see it has IAP because I know the gameplay will be around buying more stuff. On a second side-note, I wouldn't mind the fall of Angry Birds. IMO, the game has received a disproportionate amount of success and the merchandising all over the place has been ridiculous (e.g. a "Angry Birds" Roku box? That makes no sense). The game is ok but not very original or entertaining (again, IMO) but the milking of the brand has been the worst part of it.

kmfrk 14y ago
I imagine that all it takes is for a few media outlets to pick up on the advent of IAP for Apple to address it. It's becoming somewhat of an ethical problem for them. Maybe we'll see an equivalent of The Great Google Purge.
- akldfgj 14y ago
  It's interesting that the App Store used to explicitly ban upsells ("This feature requires MyApp Pro") in apps, since it is a customer-hostile feature, until they realized they could make a fortune with it.
michaelt 14y ago
Do you also object to games with a free 'lite' version and a paid 'full' version, where the two are separate app store entries, or is it only games where you have to pay for the full version via IAP that you dislike?
- Timothee 14y ago

habosa 14y ago

$12,000,000 a month? Holy shit. I had no idea the ceiling was that high. I made a free to play Android game that took me 6 weeks and made about $10 total... I guess I need to give this another shot.

mdonahoe 14y ago
They probably spend $4mil/month on advertising to drive new players to the game. That's how this all works.

jader201 14y ago

Re: "The fall of Angry Birds", this article should be titled "The fall of paid games, the rise of IAPs". Angry Birds, as a franchise, is doing anything but falling. Just look around the next time you go to a Walmart or Target. Angry Birds lunch boxes. Angry Birds Halloween costumes. And yes, Angry Birds Cheese Nips[1], which my kids are consuming even as we speak. And it's only inevitable that Rovio is or will be working on an Angry Birds game that takes advantage of IAPs over an up front charge. [1]http://www.walmart.com/ip/Nabisco-Cheese-Nips-Angry-Birds-Cheddar-Baked-Snack-Crackers-10.5-oz/21000202 http://www.walmart.com/ip/Nabisco-Cheese-Nips-Angry-Birds-Ch...

pbhjpbhj 14y ago
Or perhaps just "the fall of transparent gaming costs". Apparently the games are still paid, just pay-as-you-go without any clear/simple way to determine how much the game will cost to complete?!
- orangecat 14y ago
  Exactly, and we pretty much have ourselves to blame. We prefer to get ripped off via "free" or low upfront costs, or "sales" taken off ridiculously inflated prices. Honest pricing is generally not rewarded; look at the Nexus One, or JC Penny's attempts at transparency.
bmh100 14y ago
But the current article title is so much more intriguing dna references a well-known brand. I would love to see an A/B test comparing the two, however.

TWAndrews 14y ago

I hate, hate, hate games that use in-app purchases as a significant part of game play (and removing grinding qualifies, imo), to the point that I look to see what the top in-app purchase are and won't download games which let you buy in-game currency.

kylec 14y ago

There really should be a Game Store separate from the App Store. Currently, if you're not looking for a game, pages like "Top Grossing Apps" are completely useless in the App Store.

MrFoof 14y ago

People wonder where video game arcades went after the console market started to really gain traction in the early to mid 1990s (and really got rolling with the Playstation 2). Outside of Japan, they largely went away, but now they're back: on your mobile device. We've gone right back to feeding tokens (in-game credits) because now you can distribute the equivalent of an single-game arcade cabinet -- a game that is designed to optimally take in cash at a given rate -- to every mobile device. A good analogue would be to make a beat-em up arcade cabinet that let you start out for nothing, but when you inevitably get KO'd, you have to feed it a few tokens for the privilege of continuing before the 15 second countdown elapses and you have to start from the beginning.

pbhjpbhj 14y ago
Did any arcade games do the equivalent of allowing IAP - like get a better weapon or new super move for 1 credit?
- bronson 14y ago
  "Insert Coin to Continue" seems like an IAP.
  - joering2 14y ago
    I think that's different. In arcade's example, the only reason you needed a coin is when you have used all your lives. Now, if you had better skills, you could get through the entire game without a single additional coin. In IAP module, the game is designed so there is no chance (at least for 99% players) to go through the game without purchasing the stuff on the go. Take "where is my water" for example. You can continue game as long as you keep scoring all 3 coins on each level. If you miss even one coin, after many levels you will be missing that coin to open another level. There you have an option to open the level for $$$ Now, some of those coins, in my gaming experience, were impossible to score, but that's a different story...
    - Domenic_S 14y ago

jere 14y ago

>Phase 1 of app store monetization was Premium games (.99 titles) I have no doubt this is how it works, but I never thought I would see the day when something that costs a dollar is considered premium.

DLWormwood 14y ago
I came here to post this same thing… Except for a couple of holdouts like Square Enix, the notion of paying more for something non-consumable vs. consumable seems to be at an end in the software space.
- rhizome 14y ago
  I wonder if there's any economic theory on circumventing or avoiding a pricewise race to the bottom that would be relevant here.

drue 14y ago

If I wasn't living it I would believe this to be The Onion or something out of 1984.

cletus 14y ago

I don't dispute the OP's argument. It just makes me sad. One of the things I really used my iPad for a lot is games. The distribution mechanism and purchasing system are super-simple. You could (and can) get high-quality games for a low price. I see I've spent 100+ hours playing Bejeweled 3 alone. Yet the trend has clearly gone towards in-app purchases. I tried some golf game (Tiger Woods something?) and it was constant nagging for in-app purchases. That got deleted in about 2 minutes. Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most. And I've tried a bunch (spending no real $$$) to see (I'm a sucker for world-building games and there's a dearth of those, sadly). The second category (normal games with in-app purchases) create the wrong incentives. Whereas Angry Birds originally spread because it was a hugely fun game, the game developer is incentivized to make you fork over more money, typically at the expense of the game itself. It saddens me that Angry Birds has gone the in-app purchase route too. Sadly the genie is out of the bottle. Any sensible game developer will go this route. Add to this the "social" layer being foisted on users and it's really looking like dark days ahead for gaming.

cageface 14y ago
And this is exactly why I'm predicting a crash in the mobile games market. People are going to figure out sooner or later that they're being exploited and not actually having much fun and the whole house of cards is going to come tumbling down. It's actually worse than that because games make up the bulk of the app stores' revenue. Zynga was just the bellwether here.
- joering2 14y ago
  No, I would rather say as app games market evolve, the developers are moving to where the money is being made: on inapp purchases. Now, while most app games users will not like this idea and do not like in app purchases-based games, to the developers the 1 or 10 or whatever % of those who make purchases counts the most, and those are the ones who they will target their products to. I wouldnt say it will crash the mobile games market; I would rather say the ratio of all the games designed in ".99 cents" a pop scheme will be on rapid decline...

Xcelerate 14y ago

I am absolutely baffled that in-app purchases are so popular. For me, I would rather pay a one time fee for an excellent game than be "nagged" to move myself ahead in the game. I play Tetris occasionally on Facebook, and I get so annoyed with the constant spam for extra coins, dollars, armor, line speed upgrades, etc. I'd rather pay $40 and get the game in pristine finished form. I don't know what to make of it, really. I'm usually decent at predicting what will be popular, but this time I completely missed the boat. It really makes me kind of sad. I remember when I was little I would get a game like Zelda for GameBoy for $30. That game obviously had tons of work put into it and gave me endless hours of enjoyment. Games for phones seem to lack this kind of depth.

Silhouette 14y ago
I'm 100% with you: personally, I would happily pay a substantial price for a good quality game, which I could install on whichever computer I want without it messing anything up, and which had a single-player focus. Sadly, hardly anyone makes games like that any more. It is, unfortunately, the logical conclusion of Internet piracy. The pirates can talk about how a ripped off copy isn't really a lost sale and they wouldn't have paid anyway until they're blue in the face, but the fact is that someone has to pay for the games these people obviously enjoy so much. Given that one-off big purchases of games seem to have at most 5-10% efficiency in terms of people buying legal copies, the people making the games are looking for alternative models where the pirates can't just copy the whole thing, which means something where you take the money interactively or something where you never actually get most of the game data installed locally so you can't copy it. And that means in-app purchases for the little guys and things like DLC and MMOGs for the big players. And they still throw in increasingly obnoxious DRM for good measure, presumably because the net win from making it more difficult or time-consuming for some people to get a pirate copy outweighs the loss of custom from people like me who would buy a good game without the junk but won't spend that kind of money on software we aren't actually going to own/control. In short, if you miss paying a fair price for a finished game, blame the pirates, and blame the short-sighted executives at the big game companies who couldn't find a better way to respond to those pirates than screwing their legitimate customers.

georgemcbay 14y ago

Free to Play is certainly popular now, but I'd be shocked if it were still popular in a year. It is exactly the sort of model that IME works while it is semi-novel but creates a model fatigue in customers that results in eventual backlash of even those who accept it at first. So, he's right, but F2P model will also eventually "fall".

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egb 14y ago

I'm curious why people seemed to love and/or idolize Team Fortress 2 going free to play, but there seems to be a negative vibe surrounding it for mobile gaming... One of many mentions on their 12x revenue increase from F2P: http://games.slashdot.org/story/12/03/08/2148224/valve-switching-team-fortress-2-to-free-to-play-increased-revenue-twelvefold http://games.slashdot.org/story/12/03/08/2148224/valve-switc...

erikpukinskis 14y ago
I think it's because in TF2 you get a super fun, deep game that you can play for years and have a ton of fun and not pay a penny. You only pay for "extras". In FarmVille, when you use up your virtual money you can't play anymore. You can't plant anything, you can't harvest anything, you can't plow anything. You just have to wait a few hours until your plants grow. So your choice is make an IAP or literally watch grass grow. And even of you could grind through that and keep playing (say by mining gol laboriously)... TF2 is just a more complex, more interesting game. FarmVille and the like seem to exist only to get you to spend money compulsively.
duskwuff 14y ago
Because TF2 has made a very specific effort to avoid "pay-to-win" gaming. Most of the expensive items in TF2 are largely cosmetic; all of the seriously game-changing items can be crafted, found, or obtained through unlocks.
- cshesse 14y ago
  Plus, TF2's stock weapons are generally the most versatile, so there are few if any game-changing items.

ww520 14y ago

Curious about the credit management mechanism. For the unused credits (coins), can the users ask for refund? Or they expire after some time, just like the cell phone purchased minutes.

rhizome 14y ago
Refund?!

m_myers 14y ago

An interesting variation on F2P is the one used by World Golf Tour [1], which I've been playing a bit recently. Instead of forcing users to pay real money to get better equipment, it has another means of earning credits: viewing advertisements. That means that a) I don't feel like I'm actually spending money (except opportunity cost), and b) they can show pretty well-targeted ads to users who are requesting to see them. I don't know the financial details, but I'd guess they can sell for a pretty decent rate. And you have to view quite a lot of them to get as many credits as you could have bought outright for $10. As an added bonus to them, relying on ads means I have to disable AdBlock for their entire website. [1]: http://wgt.com http://wgt.com

digitalengineer 14y ago

How will this effect Google's Mobile Advertising Strategy? As the numbers show for almost all free Apps, the In-App-Ad's are being replaced by In-App-Purchasing...

beggi 14y ago

I think this wave of Free-to-play games with incessant requests to gamers to buy in-app coins and whatever might lead to a wave of expensive (like $30-$60, similar to the desktop market) up-front games that will have a promise of no in-app purchases. I know I'm at least, and I suspect a lot others, are yearning for the old days of Sim City and Sim Tower where you didn't have to pay extra for specific buildings.

andr3w321 14y ago

It makes sense that the free apps are making more when you think about it. They're getting the most money out of each customer. Every customer is not worth 99 cents. Some are worth a LOT more. Just like when you go overseas and the locals have on cheap price for locals and a much higher price for the rich foreigners. There have to be other ways of achieving the same end goal however without the constant nagging. Has anyone tried a game where people pay by the hour for instance? First hour free?

anovikov 14y ago

I don't see any failure there. They have relatively few installs, but near top revenue, meaning: nearly everyone have already installed their stuff, and stuck with it, and spend a lot there. They just turned into an established business, maybe no longer a 'startup'. Falling growth rate is inevitable if you have already conquired the world.

webwright 14y ago

If you'd like to see the fall over time, here's a graph: https://skitch.com/webwright/eq2es/angry-birds-rank-history-app-annie https://skitch.com/webwright/eq2es/angry-birds-rank-history-... The blue line is the overall grossing rank over time.

stcredzero 14y ago

> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like. Data? Citation? I'm genuinely curious. Is this now the common wisdom for indy games?

dark_element 14y ago

Interesting fact on how desperate people can get to be better at games. The lack of in app/game purchases in MMOs created a whole industry called "Gold farming" http://en.wikipedia.org/wiki/Gold_farming http://en.wikipedia.org/wiki/Gold_farming

theDaveB 14y ago

I read (might have been on here) that Angry Birds Space made $10 million dollars in its first week of release. I have 2 games on the app store and so far have kept away from IAP as I hate it myself but thinking of implementing it on my next game. Dave

podperson 14y ago

I hope the trend proves to be short lived, and suspect it will be.

mkale 14y ago

IAP games are like going to the arcade and paying some small amount per play, rather than buying the game upfront and getting to play as much as you want.

swombat 14y ago

Forget about whether IAPs are bad. Did nobody pick up on this? > In the last month, this single game generated over $12,000,000 on iOS alone. They have not ported the game to Android yet. > If this is the case and it holds ranking for the rest of the year, then this single game is worth $109,500,000 PER YEAR on the low side. Holy fucking shit. $100m a year of high-margin sales for a single iOS games? World of Warcraft makes, last time I calculated it, roundabout these amounts, and WoW is one of the most financially successful games ever and requires masses of investment in infrastructure, new content, community management, developers, and so on - so big it swallowed Blizzard whole for a while. If a silly, simple, stupid looking iOS game can make $100m a year of almost raw profit, this is... well, just mind-blowing, really.

harpastum 14y ago
$100m a year is clearly crazy money, but it's not quite at the scale of WoW yet. World of Warcraft subscribers have been declining steadily for the last couple years [1], but they still have ~9.1 million subscribers. The least a subscriber can pay is by buying in 6-month increments, which is 12.99 a month [2]. So, even though they're making less money than ever, 9.1 million subscribers at 12.99 per month is 1.4 Billion a year. [1] http://www.ign.com/articles/2012/08/02/world-of-warcraft-loses-subscribers http://www.ign.com/articles/2012/08/02/world-of-warcraft-los... [2] http://us.battle.net/support/en/article/payment-option-credit-card http://us.battle.net/support/en/article/payment-option-credi...
- david_shaw 14y ago
  9,100,000 * 12.99 == 118,209,000 So, unless my math's off, I think that's pretty close.

crazygringo 14y ago

I wonder if the whole reason IAP is winning... is because trial periods aren't being done? Wouldn't it be a lot simpler to make Angry Birds free, have only the first 20 levels be playable, then pay $9.99 for the remaining 80 levels? (I'm making these numbers up BTW.) Obviously IAP makes a lot of sense for Farmville-style games that are all about "objects", but when tacked onto Angry Birds Space, or most games really, it feels like the company is just trying to take advantage of you. Why don't we see any "free trials" like this in the App Store? Is it against Apple TOS or something? Or have studies shown it just doesn't work? (And I don't mean the free "lite" versions of games -- those are annoying because you lose all your progress and have to start the full version from zero.)

mdonahoe 14y ago
IAP wins because the developer can capture more of the area under the curve for what people are willing to spend to the play the game. With traditional games, you either pay the $10 or you dont. Once you have bought the game, you are done. Maybe you can buy an expanion pack later, or a tshirt, but the developer literally is out of ways for you to spend money. With IAP, players can pay as little or as much as they want. The danger is that the game can become less fun if you are always being prompted to spend more money. But I think there are games that do it well. I have spend over $100 playing Valve's TF2, a game that is free-to-play, and I don't regret it.

CmdrKrool 14y ago

Funny thing I've found myself doing recently, when I'm hooked in to one of these horrible, grindy, submarine IAP games which I should know better than to keep loading up but hey I'm only human. Since my iPad is jailbroken I just SSH in, find the game directory and more often than not find my stats sitting there in a simple .plist file (maybe a binary plist, but then you just use the appropriate editor), make myself an in-game millionaire, load it back up and enjoy the game at max power for a few minutes before turning it off and never thinking about it again, a 'weight' lifted off my shoulders. It shocks me, how when the grind is suddenly removed, my interest in such a game that minutes before I had been feverishly, morosely addicted to, /completely evaporates/. It's funny how me doing this is quite comparable to piracy, but - rightly or wrongly - I feel almost no guilt about doing this because by the time I've got to this point I've lost all respect for the game anyway. It's ironic how Apple's locking down of the device is enough for most developers not to bother obfuscating their game save files so that if you have taken the trouble just for that jailbreak step, you're unlikely to meet much further resistance. And finally when I do run into a game which has apparently taken cursory defensive steps such that my crude hackery only succeeds in stuffing everything up and losing whatever progress I did have, this too turns out to be funny. As I have no impulse to start playing from the beginning again, I breathe that very same sigh of relief, and forget all about it. Win-win.

mdonahoe 14y ago
There are forum posts and youtube videos for how to cheat in most IAP games. Developers are learning to fight against it, but it funny how much effort goes into making sure some bits dont get flipped.

minikomi 14y ago

Just as a point of reference: the top 15 grossing apps in Japan at the moment are free to play but with in app purchase battle/card social games. I also work making them. 1-5 http://i.imgur.com/cuzGb.png http://i.imgur.com/cuzGb.png 6-10 http://i.imgur.com/ckpIC.png http://i.imgur.com/ckpIC.png 11-15 http://i.imgur.com/jzFWa.png http://i.imgur.com/jzFWa.png #16 is Line.