There is a new trend for apps coming out now, a New York Times article says. More and more apps are following a "freemium" setup, which means that the app is released for free and users are given the opportunity to buy from a store within the game. This does not seem like a good strategy, releasing a game for free and hoping that people visit the online store to customize their gaming experience, but it is doing very well.
One notable app that has done this is Temple Run. The creators, Natalia Luckyanova and Keith Shepherd, originally released the game for a sale price of 99 cents so that everyone had to buy the game in order to play. The game did not do too well, which prompted them to offer the game for free. They promoted the app through the Free App a Day Website and the game took off. The article says that "it has topped 40 million downloads and about 13 million people play it at least once a day." Within the game there is an online store where users can buy a different character, scenery, and different power ups to help them get a higher score. Temple Run is now number 14 a list of apps that have made the most money even though the game is free.
Zynga is a company that has had a lot of success with freemium games. This company created Farmville, a virtual farm town where users can buy different animals and things for their farms. These games were introduced on Facebook and we have all seen the notifications on our news feeds about someone needing help on their farm in Farmville. The company made a lot of money, which lead to an IPO that raised $1 billion, for a company that was letting people play games for free.
I immediately thought of Roger’s list of factors that shows the likelihood of a product’s success when reading this article. The two factors that I think are most advantageous for a freemium app are observability and trialability. When someone can download a game for free, trialability is very high. On a scale of 1-10, I would give it a 9. The only reason I do not give it a 10 is because the app store is only useful for people with Apple products, therefore, only people with the products compatible with the apps can try them. All someone has to do is go to the App Store and hit the download button. A good sense of the ownership experience can be had and if someone does not like the game they can delete it from their device and there is no cost to them. It is also very easy for someone to observe someone using the game, which is why I would give observability a 9 as well. If you know someone with an iPhone all you have to do is watch them play Temple Run and you will see how enjoyable they find it.
Based on those two factors I think that the freemium strategy is a good one for apps, especially since there are millions of apps out there. With no cost to the consumer, they are more likely to download an app, especially if people they know recommend it. The only struggle could come if no one is buying anything in the virtual store. If no one is buying anything, the app is not bringing in any money even if it is a very popular app whereas an app that costs money to download makes money whether or not the consumer likes the game and plays often. One question I see going forward is what is going to happen as more and more apps take this route and make the app free to download and expect people to buy from their online stores? I do not think that there is any way for every app to do well because some will be more successful than others, which could potentially lead some companies into bankruptcy if none of their apps do well. Instead of having some revenues when people buy the app, these companies will now be left with no revenues from apps. I think it will be interesting to see how many apps now start adopting this style and how successful they are going forward.
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