Paymium: Walking Away From Free2Play

Many small mobile game developers I talk with are considering abandoning pure Free2Play in favor of paid apps with in-app-purchases–AKA “paymium”. A great example of this is on the latest Walled Garden podcast featuring Plague Inc. creator, James Vaughan.

At first, Plague Inc. was a simple premium app. After quickly building a rabid following, he added purchasable items that can otherwise be earned in-game. This has been an extremely successful business model for Plague, Inc. and many other top games from the likes of Rovio and Halfbrick.

James’ sound reasoning for his use of Paymium is that he dislikes games purely designed around IAP and thus made a game he wanted to play. Making small games is a very personal process. If you don’t like what you’re making it’s not going to be good.

Another reason developers are considering this approach is that the top free download charts on iOS are completely bought and sold. If you look at any game in the top 10 free downloads, it’s safe to assume that spot is paid for with heavy advertising spends along with other somewhat underhanded tactics. The latter may get you bounced from the App Store, but it doesn’t stop most publishers from finding a way.

The paid charts are theoretically more honest. Because you have to tack on the price of the app along with whatever you pay for guaranteed downloads, paid chart manipulation is more expensive. Yet, this may still be common considering how large advertising budgets are for the top mobile games.

A great new paymium example is Contra: Evolution, a clever mobile remake of Konami’s NES classic from PunchBox. The game costs 99 cents on iPhone and $2.99 on iPad. Both versions feature a plethora of in-app-purchases.

Contra has been floating around the top of the paid charts for a while–although still scraping the bottom of the top grossing. This illustrates the depressing reality of premium apps. Even a top 5 paid download barely registers on the grossing charts. Yet, any indie developer would kill for the type of revenue Contra is making.

What did Contra do right? The following is a bunch of hand-wavey, rear-view-mirror driving. It could all be true. Or the game’s success could purely be fictional and entirely paid for by outrageous ad spends and thus this entire article is nonsense. Anyway…

First, there’s the brand. Brands generally aren’t worth much in mobile. If you look at the top apps, the overwhelming majority are original IPs. Yet, Contra has strong awareness among retro gaming enthusiasts. Some brands matter in mobile.

Secondly, the game is good. Over a decade since the last reboot, PunchBox went to the origins of the series with a remake of a classic that is competitive with current mobile games. As we’ve seen in Predictably Irrational, it’s extremely difficult for a paid product to compete against free at any quality level. PunchBox pulled it off

Finally, people who have paid for your app are already invested. Theoretically, they are more likely to spend again. Contra’s unimpressive top grossing rank may not actually prove this out. However, mega-hits like Angry Birds and Jetpack Joyride have used paymium to great success. Contra’s low grossing rank may be due to poor monetization design instead of a flawed model.

A few years ago I would have laughed if you suggested launching a premium app. Now I’m not so sure. The new rule is, there is no rule about monetization. F2P isn’t one size fits all–but, how do you actually find what does fit?

The Winner-Take-All Game Economy

Last week Sony announced the PS4–the first real salvo in the belated next generation console wars. It all seems so familiar; a new box, mind-blowing new graphics, and an array of launch titles we’ve kind of seen before (Killzone, again?). Also, much like every console transition from the NES to the PlayStation 3, we’ve seen the wholesale destruction of development studios not able to make the transition.

This is evidenced by thousands of layoffs in the traditional game sector, including the implosion of at least one long-running publisher. The standard reasons of not being able to compete with increasing production values as well as the inescapable trap of publisher work-for-hire certainly are partially responsible. Not to mention the mobile disruption that has been detailed on this blog for a few years. However, is something else at play here?

There are two precious resources in the ecosystem of games: money and attention. In previous generations games cost a fixed amount of both–You give me $60 and I give you 10 hours of fun in a box. If a gamer had $500 a year to spend on games, 8-10 games would get that person’s cash–spreading the wealth. In this era, there was a healthy market for mid-range titles in addition to blockbuster hits.

Now, many games are “free” and monetize users by charging for consumable in-game items. Games built on this model are designed to string the player along forever, allowing him to spend a theoretically endless amount of money and time in a single title. One game can consume all of the player’s cash and attention at the expense of most others on the market. The winner takes all.

The finite resources of gamers’ time and money are under increasing pressure from a deluge of free content. How do developers survive in this economy? One way is to build shorter, more intense experiences. Games such as FTL deliver hours of fun in 15 minute chunks. This is bite-sized entertainment gamers can snack on while primarily strung out on an infinite f2p hamster wheel. For many developers it may be futile to compete head on with vastly over-funded startups producing endless time sinks for an increasingly fickle audience. Instead, fit in between the cracks and lure players into your wider ecosystem once you get them hooked.