NPD: freemium games - ticket to a lucrative future

Those mobile app developers who want to make more money might want to consider converting a paid app to a free one with the option of monetizing in-app purchases, says a new study. After downloading free games in mobile stores, 40% of consumers decide to make an in-game purchase, NPD research firm explains. Most of them are men. Analysts explained that while women play more in freemium games, they are “among those who are least likely to pay for an upgrade.”

Freemium games are becoming increasingly popular in the mobile market. Applications are free to download and play, but developers are already asking for money for additional features or specific items.

Already several studies conducted in recent months have emphasized the importance of in-game purchases. So, the IHS research firm in January found out that in-app purchases last year amounted to $ 970 million , which is 39% of all costs for mobile applications. By 2015, this figure could grow to $ 5.6 billion, or 64% of the market.

At the same time, for example, Appy Entertainment’s decision to make its Trucks and Skulls game, which had previously cost $ 0.99 free, increased the profit from the game by 150% and, surprisingly, the company did not receive a single complaint from those who had already bought the game.

"In 2012, it will be increasingly difficult for stores and developers to charge virtually upfront fees for their products, given the huge competition from free content." Says Jack Kent, an IHS analyst. “Instead, the industry should rely on the freemium model and monetize content through in-app purchases.”

Earlier this month, the Amazon app store announced the introduction of in-app purchases, the Apple App Store and Google Play, the former Android Market, have long offered such an opportunity.
NPD, in turn, found that in-app purchases begin to fall after a person has been playing the game for more than a month, which makes it necessary for the developer to target a “fresh” audience who has just downloaded the app and started using it.

Freemium games are widespread, 85% of those who know about downloading applications have downloaded such programs. In total, 38% of the U.S. population of 2 years and older is currently playing some form of freemium games, says NPD.

During their study, NPD interviewed 6,400 people.