Free-to-play overtakes premium games revenue in the App Store

The latest blog post from Flurry reports that free-to-play revenue has overtaken premium revenue in Apple's App Store. I think this was pretty much a guarantee at some point in the future, though it's happening probably a little sooner than most expected.
Free-to-play gaming, where a game download is free and users spend money on extra content or convenience items using in-app purchases, has been growing on the App Store in a big way. Traditionally, premium app sales (in which a one-time purchase up front pays for the app download and any included content) have been the real money-makers. That's no longer true, however: in Flurry's analysis of the top 100 grossing apps, 35 percent of the revenue is now coming from premium games, with free-to-play titles making up 65 percent. Note that this analysis is for games only, but considering games make up most of the App Store's business nowadays, it's easy to expand these numbers out to the Store in general.
What does this mean overall? It's not a new direction; we've already seen free-to-play titles get hugely popular on Apple's App Store and other mobile platforms, and that trend will definitely continue. But even with the success we've seen on free-to-play, developers are still only monetizing a small percentage (usually even less than a full percentage point) of their audience, with small amounts of customers basically paying for everyone. The next big advancement in this business model will be a game that figures out how to monetize a larger audience while still keeping that gigantic group of players that dives in on F2P titles.
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Free-to-play revenue has overtaken premium revenue in Apple's App Store.
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September 16 2011 at 10:32 AM Report abuse Permalink rate up rate down ReplyI had no idea that Apple apps are this popular. I havent ever used them so far:) Maybe I should...
September 16 2011 at 10:30 AM Report abuse Permalink rate up rate down ReplyWhat a shame. Personally, I avoid these "freemium" games at all costs. If I'm looking at an interesting looking free game and see it has in-app purchases for dumb things like "smurfberries" for example I hit the back button right away. Sure, it may be a fun game, and yes you can indeed play it and have fun without buying whatever extra items they're selling, but I don't want to be constantly reminded that I could pay extra to get more of these items faster or something similar.
I personally would much rather pay the normal price for a game - or a sale price, even better! :) - and not feel pressured to buy separate things in-game. In-app purchases to turn a "demo" into the full game or to buy additional missions/quests/etc. are one thing, but not what theist "freemium" developers do.
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July 07 2011 at 11:43 PM Report abuse Permalink rate up rate down ReplyI guess I should've invested in smurfberry futures.
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