For many, understanding how Freemium businesses make such enormous profits year on year is very confusing but it’s very simple to explain. One huge aspect of Freemium Business is the mobile gaming market which is expected to become the leading gaming platform this year with projected revenues of $35 billion.
This is huge increase from last year and, with Google’s Play Store and Apple’s App Store constantly being developed, it is clear accessibility plays a large part in Freemium gaming’s successes. Naturally, games that are free-to-play will either offer in-game purchases or have many adverts constantly displayed as a means for the Freemium company to earn its profits – very clever indeed.
Online casinos have generous welcome offers but require a deposit to access them in most instances. This is not an example of Freemium business and some online casinos or change pace with bingo online could see themselves fall behind the times for simply charging users to play.
Mobile gaming is also expected to trump PC and Console gaming as the cost of gaming of fixed devices has increased year on year. The turnover from PC and Console gaming saw a decline in 2015 but the turnover per game/title was quite impressive: $8 million per console game and $2.9 million per PC title. In stark contrast, mobile gaming titles generate an average of $40,000 per title with the Freemium market reliant on mass volume monetised by in-game purchasing.
The Freemium gaming market has its positives and its negatives but it is safe to say no business model is solely positive. When you consider the slimmer revenue margins are applied to titles that take far less development time and money, you can effectively multiply the $40,000 average by however many Freemium games enter the market at any given time – 800,000 at the beginning of the year.
Granted, figures suggest only 200 of the tens of thousands of Freemium development companies will gross over $1 million by the end of the year but that is still $200 million from such a small portion of the market – mindboggling.
Freemium gaming will inevitably maintain its dominance as it continues to be more accessible, less expensive and far more diverse than PC and Console gaming can compete with at this present moment.