The lucrative free-to-play (F2P) market is clearly tempting. But there’s more than F2P, as two Canadians pointed out at the recent (March 2013) Game Developers Conference in San Francisco. Each had a perspective on creating games that people actually want to pay for. Both focused on the growing trend towards “premium” and “paymium” strategies. In the first, you pay up front for a complete game/app experience, while the second means some payment to start, but there’s an option to spend more on in-app purchases (IAPs).
Appsfire says 74% of apps published in 2008 were paid, a number that dipped considerably to 34% in 2012. Over 1,000 apps reached Apple’s App Store top US rankings last year, with games mostly comprising the top 10. Now though, when free has almost become an industry mobile standard, asking potential players to part with $0.99 or $2.99 seems risky.
$2 Billion Paid Game Market
Nathan Vella, president of Toronto’s Capybara Games, did some “loose math” during his GDC appearance: Still Kicking – The Viability of Paid Apps in the Era of F2P. App revenue was around $10 billion in 2012, says ABI Research. And games accounted for 66% of sales, according to Distimo estimates. Combined with Appsfire’s 34% figure, Vella tallied roughly $2 billion in paid games.
Even if off by 50%, his math represents around $1 billion. “There’s still a huge amount of opportunity in paid games, but the buzz and focus is on F2P,” he said.
So how do you attract players ready to buy a premium title? Aside from the obvious – creating a good game – a company like Capybara has excelled in promoting its games early to produce hype.
High Niche Value
Paid apps also work well when serving a niche. An example, said Vella, is Fireproof Games’ beautiful and mysterious point-and-click iOS puzzler The Room. As Apple’s iPad Game of the Year in 2012, the app sold almost 2 million copies in 45-plus countries.
“Everyone realized they really wanted to play that game, and it’s a game that served a group of people who didn’t know they wanted that style of game,” Vella pointed out.
Survival also means building studio loyalty he said. “If you’re a paid app developer, you need to think about your studio as a brand, think of your games as a suite of games.”
Swedish developer Simogo Games (Bumpy Road, Beat Sneak Bandit) created titles that are “vastly different from each other, but they represent an audience interested in style, aesthetic and touch devices,” he said. “They have a suite of titles they can move around and promote as a single piece.” Simogo’s recent Year Walk (iOS, $4.99) – a haunting game based on Swedish folklore – has sold 100,000 copies.
“Paymium” to the Rescue
Vancouver’s Slick Entertainment aims to respect players with its paymium iOS role-playing shooter Shellrazer ($2.99). “Dirty tricks” are out: No goading players with sad-eyed animals or designing play so that it’s hard to opt out from an in-game store.
Tricks work, conceded Slick game designer Shane Neville at GDC’s Independent Game Summit, which is why companies use them. “The important thing to remember is that business models don’t determine ethics, developers do.”
During his talk, Shellrazer – Designing In-App Purchase Without Losing Your Soul, he explained how Slick designed its game to challenge and reward three types of players: those with (1) skill, (2) time and (3) money.
Players who lacked skills could still advance through levels by spending more time on the game. Slick also didn’t want people paying more than $50 on IAPs to get all the upgrades – and that’s entirely optional. The upper cost is roughly similar to a triple-A console game, perhaps not coincidentally.
It paid off. Game reviewers happily pointed out that IAP was not required. And the most telling statistic? About 30% of Shellrazer revenues came from IAP anyway.
Great results for two Canadian game developers who nixed F2P in favour of value-based profits.