From Wikipedia’s Freemium page:
Freemium is a business model that works by offering basic Web services, or a basic downloadable digital product, for free, while charging a premium for advanced or special features. The word “freemium” is a portmanteau created by combining the two aspects of the business model: “free” and “premium”.
There are hundreds or thousands of games on the Apple AppStore. The popularity of it is rising according to numerous reports, and probably it is a very profitable model. I just heard of the term and so looked it up. It seemed fairly obvious given the context: a review written for an iPhone game, talking about the free nature and how the extra features are paid (something this particular reviewer did not like).
So, now the question of the moment: should this app I am developing follow the freemium model? I don’t think I can answer that during the time of this blog post writing, but I will give it some writable thought.
A freemium app gives the public something to try-before-you-buy, but the Apple acceptance for new apps to the AppStore requires all apps to provide a “complete” product, even if it is minimal.
- You can get more initial market penetration
- Possibly take advantage of alternate marketing techniques.
- “Free-buyers” may be able to customize their experience of the product in the extensions
- Coming from the previous point, the buyers may find their experience enhanced by a product that can interpret specific combinations of extensions, for example: a car-building game, buying a “racing stripe” paint job and an “air foil” extensions separately may each add individual looks or enhancements to speed, but together they gain a bonus, a synergy from the two.
- The product’s “extras” that are premium may not be accepted as “worth the money”, and a greater majority of people may consume the product’s free version, and then carry on with the next shiny thing that catches their eye.
- The “extras” require specific development that extend beyond the core “Free” product scope. More levels, more characters, etc, cost more time and money to create.
- A buyer may be surprised to find “extras” that he or she, individually, naturally expects as part of the “Free” product, and complain or spread bad reviews complaining about “premiums that ought to be free”
- An update to the free product that requires the previous purchase of a (very) popular extension should only be publicly released after making the popular extension become part of the core free product. The Apple AppStore’s in-app purchases feature does not permit game logic upgrades, but does permit static data files like artwork (decals) and 3D models (new cars or whatever) and sound. No new multi-player features, however there are ways around that… So, realistically, an update to the free product that requires the previous purchase of an extension should not be an update to the free product, rather it should be a paid extension, perhaps one that absorbs and eliminates the previous popular extension
After this analysis, it seems the benefits are all mostly in favour of the end-user, and to a lesser extent, benefiting the company/developer. The Cons are all weighing more heavily on the company/developer. There are no major cons to the end-user except for those people who have personal expectations of extra free things, and the free-release of previously paid for products.
I like the idea of the fremium model, and may chose it but for now, the core game must completed.