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Freemium and IAPs Opinions

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  • jso

    Hey everyone,This morning a colleague and I were discussing the trend of free/IAP apps taking over the marketplace and lowest bidder wars on the app stores, so I thought it might be fun to get more opinions and other points of view. Whereas it used to mostly be paid apps and lite apps with ads, now the marketplace is starting to be mostly free apps that offer IAPs of some sort. What are you thoughts on this somewhat recent shift?Personally, I don't care for it. I'd much rather just pay the developer(s) upfront and have the app/book/game in full for a lifetime, but I'm probably becoming the minority. I was actually disappointed to see Plants vs. Zombies take up the free/IAP business model because now you have to pay for game cash, plants, board, level ups, etc. instead of just having a full game to play for a few bucks.Developers are only taking up this business model because it's making money and it's what's hot right now. The developers that don't want to implement IAPs are being forced into the lowest bidder war. You might spend a year making a quality book, but now since customers are used to getting to many apps for free, you're almost bullied into making your book app $.99-$1.99 just to see sales.If you're like me and only make your apps for fun and the side cash is a bonus (see blog post: http://gpanimationsblog.com), this isn't a huge deal, but anyone trying to make a living off of app development has to either adjust their business model or do some serious marketing.Thoughts? Opinions?


    Since my apps are for kids I don't want to use IAP, even if that is the most lucrative business model.  Parent's don't like it either.  I hope direct purchase picture book apps don't get pushed out altogether.


    My own apps are for kids, no IAP or ads allowed. Goes against Apple regs and my own sense of what is appropriate. That said, the game industry relies very heavily on IAP and the freemium model works better than the 99 cent or 1.99 paid app will. Many studies by marketing companies and stats watchers confirm this, as does my personal experience marketing client apps in that genre. In app ads are doing well in other categories for apps that don't lend themselves readily to IAP. NewsStand apps with ads do extremely well and are well received by the consumer. We have to remember that WE train the consumer. WE as developers have established the 99 cent price point.  As developers, we trained consumers to use IAP and to expect it to appear in those 99 cent or free apps. But, as developers we've also learned that IAP works ONLY if we don't abuse the consumer, if the addons actually enhance the app, without stopping the progress of that app, we can do well. Consumers are used to seeing (and responding) to periodical advertising. They come to us pre-trained by print and online periodicals. There will be a push back by consumers if we abuse them too much, no matter how well trained they are. When ads begin to interfere with their enjoyment or use of the app, free or paid, they will go elsewhere.I disagree with the statement that developers are being forced into the 99 cent bidding wars. It is up to us as developers to widen the gap between 99 cent crud and 2.99 good stuff. The 99 cent crud is well recognized by consumers and at least in the book category consumers WILL shun that 99 cent deal if they'e been burned on 99 cent crud before. But by god you'd better have a quality product if you're going to charge $2.99 or more. It HAS to be worth the price. Check out the reviews - how many have you seen that say something like "good thing this piece of garbage was free, it isn't even worth 99 cents" I've even seen a few suggesting the developer pay THEM because it was so bad. Have them fork over 3 times that amount or more and they will be even quicker to point out the failings of your app than they are with the 99 centers.The consumer will not pay for your time. They will pay for quality, for well presented information, for engaging game play, for likable characters, for replayability. Things like that. What your cost or time of development was for that product doesn't enter into the buying cycle at all.  There is one really important point that most Fremium discussions don't mention. If you put up an app for $2.99 and you put up a lite version for free, you will probably hit one conversion to full price for every 500 downloads (or more) Likewise 100% of your Fremium users will NOT be buying IAPs. The active user base will be closer to 5%,  so Fremiums don't guarantee a paycheck. Balancing a Freemium game for maximum income potential is an art form. In other genres, if you want them to pay to play more levels or read more chapters, you have to build the NEED into your app. So they NEED to see what happens next. They NEED to beat that mission or boss. Without the right balance or without that need, you won't even make 99 cents per download.One other somewhat odd stat. In the Droid market direct upfront sales suck compared to Apple. BUT IAP in Droid markets is much higher than in the Apple world. In some cases more than triple. So when you hit the stats and trends to set up your marketing plan, be sure to remember that the two giants have different buying and usage habits.Sorry for the length of this, but marketing apps in all their various model disguises is a subject near and dear to my heart. Probably because it pays my bills while I use Kwik to bring my true passions to market. LMAO


    It could be good that we as developers are forced to make the highest quality apps in exchange for getting away from the 99 cent price points. However, the app marketplace is still overly saturated and even high-quality apps need great SEO/SEM/Advertising campaigns.I came across this article last night, which is kind of funny since I yesterday morning I was trying to think of other fields I can get into that aren't overly saturated like the mobile app business: http://www.gamesindustry.biz/articles/2013-09-24-game-devs-ditching-mobile-in-favor-of-pc-consoleThe gaming industry in general is too fickle and over-populated for my tastes. Unfortunately, the children's book (digital and print) market is very similar. The children's book section in my local Barnes and Noble is thousands of books are lined up on a shelf where you can barely see individual spines of books. I guess nothing beats a patented blend of high-quality and a great marketing campaign, otherwise the great ones have little chance of getting noticed.It all just reminds me of the .com era where only a limited number of people knew how to create websites and got rich off of it. Now everyone knows HTML and CSS and it's hard to set yourself apart from the crowd. Same thing with apps, it used to be a small crowd making them and getting rich, but now it's anyone from 10 year-old kids to major corporations making them fighting over a tiny sliver of the pie.The moral of the story? Spend lot of time advertising and marketing your products.


    Amen Greg! You should spend at least an hour marketing for eery hour you spent developing and sometimes more. Back in the day we used to say “without marketing you can build it but they won't come”. Same thing in the app world today.One important fact to remember is that the app world is full of apps, but most of those apps actually suck. Even name studios with successful desktop games are building less than stellar ports of those games. And many of the others are just onesies from indies. What worked in developing the net works in the app market. Build a quality app, market it well, then build another quality app, and another and ...Find your niche and rise to the top of it. Become known for the quality of what you do. Build an empire, one app at a time. Look at why some game houses are wildly successful and others aren't. Blizzard has a raving, loyal fan base that helped them break the "wisdom" of the game world  "I won't pay to play, they'll never make it". Umm yeah I wish I had just one hour's worth of WoW's cash! They can even put out a broken game (Diablo 3 anyone?) and we STILL buy it and play it and wait for it to be fixed. The quality of their games is unmatched. The game experience is immersive, for the most part game play is well balanced and you can play your way. You can be a loner if you want to be or a social butterfly. Think about it. When you leave the game after finally getting that boss down, the music is still running in your head. You feel good, because the reward system gave you that staff you were lusting after and because you spent a couple hours with your buds beating up on Grom Hellscream.  No matter how bad your day was, you won. When you have THAT feeling, you will gladly fork over $15 a month and wait in line for the next game they put out. You need your player to walk away from your game with that feeling of accomplishment or you will not succeed at any price in any market.

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