Freemium games earning 65 per cent of App Store revenue

A new study shows that in June 2011, free-to-play games took a 65 per cent share of the revenue generated by games in the App Store.

The report, by Jeferson Valadares of Flurry, compared revenue for both freemium and paid for downloads for the top 100 grossing games in January and June.

In January 2011 free to play games had a 39 per cent share of the revenue, in June it had risen by 26 per cent to overtake paid for games.

"When you make your game free and add in-app purchases, two powerful things can happen: first, more people will likely try your game since you’ve made the ante zero," explains Valadares.

"And second, you will likely take more total money, since different players can now spend different amounts depending on their engagement and preferences. It’s not unheard of for individual players to spend into the tens of thousands in a game they like."

He also states that Flurry data shows the percentage of people who will spend money on microtransactions in a free to play game varies from 0.5 per cent to 6 per cent.

"Although this means that more than 90% of players will not spend a single penny, it also means that players who love your game spend much more than the $0.99 you were considering charging for the app."

Flurry offers both analytical and advertising services to mobile developers, and has worked with 40,000 companies on more than 75,000 applications.