iPhone free-to-play revenues can rival consoles - ngmoco

Neil Young, the CEO of iPhone developer and publisher ngmoco, has said that the revenue made from free-to-play iPhone titles could rival that made from console games in the future if designers are able to deliver compelling enough content.

Speaking at GDC, Young said that ngmoco's own business model – which has now moved entirely to free-to-play – was developed over time following the company's launch in 2008.

To begin with the company launched two titles simultaneously – one, Mazefinger, as a free title and the other, Topple, as a paid app.

"It was very useful for us because we were able to see how a paid app performed versus a free app - a 10 times difference," the company's VP of social applications Jason Oberfest told GamesIndustry.biz. "We realised if we can figure out how to monetise that free user base that's going to be a much better business."

Thereafter, the company started to unlearn many of its previous business practices in the transition from traditional games to digital, said Young.

He noted that at the start of its life, the iPhone market was growing 400 per cent quarterly, while the numbers of games grew 1200 per cent. "I made the call it was going to get messy," he said, adding that ngmoco's first instinct to put out new apps every 1-2 months was taking its toll on the team and stunting creativity.

Deciding instead to focus on monetising the large user base its free-to-play titles had generated, the company made the decision to either adapt the current games it was making to support the freemium model, or suspend them.

"Daily active users became the basis for the whole business," said Oberfest, adding that using this model starts disconnecting the developer from chart position which, while valuable, doesn't beat having a large user base in the long term - "With a big user base you can do your own promotion," he explained.

In order to build that user base, Oberfest said the company focused on three "critical pillars" in the design of its games.

"It's not about the notification system that Apple or Facebook or anyone else offer, as much as it is about, does a game truly make you want to invite your friends to it, does it make you want to come back and does the game make you want to invest some money," he explained.

"Those are the three critical pillars of a successful free play game. We're constantly balancing those three things in our game design and using our software, which is very sophisticated in terms of the analytics it provides to make sure that any one thing that we do to optimise this cannot come at the expense of the other two."

Despite coming from an online background in business development for Facebook himself, ngmoco was still first and foremost a games maker, said Oberfest.

This opinion was backed up by Young, who says that this new business model is the most significant shift and opportunity since the start of the industry for game designers specifically.

Design is now connected to business success and has direct correlation to performance in the marketplace, he pointed out. People that can evolve to create great games, which retain users and are simple and scalable for long and short-term gameplay, will thrive.

He added that the freemium model isn't a new one as such, but more an adaptation of the model utilised by arcades in the early days of gaming.

As with the arcades, a few subsidise the many, he said – pointing out that around 2 per cent of the players of a free game will spend money within it.

Like the arcade, its the deeply engaged players that are compelled to spend the money which supports an ecosystem that a large number can participate in, he said.

Added to that is the social aspect of these games – people would put more quarters into an arcade machine if their friends were watching them, just as they're more likely to spend money on fast progression or on self-expression within an online, social game.

Other aspects to ngmoco's success included its implementation of push notifications – if someone plants some crops then, 12 hours later, they get a notification saying they've grown, they'll return to the game, said Young – and on building a big enough user base that it could offer meaningful advertising to third-parties,

The company has two new games currently being tested in Canada and due to launch worldwide imminently – GodFinger, which was developed by Wonderland Software, and We Rule, a game created by studio Newtoy in conjunction with ngmoco.