One of my favorite things about the App Store is because of how fast it moves, you never have to wait too long to see trends forming. Thinking back on it, the entire existence of the iPhone is little more than a flash in the world of technology, even though its release back in 2007 (and the launch of the App Store in 2008) feels like ancient history now. A number of things have changed over the short life of iOS devices, but I think the change that had the largest effect on App Store was Apple shifting gears to allow the free to play market to take hold.

When Steve Jobs initially announced the in-app purchase system, he made sure to emphasize that only paid apps would be allowed to use it. Or, as he put it, "free apps remain free." Apple doesn't often change their tune, but they did in a big way on October 15th of 2009 when they opened the free to play flood gates. Moments later, ngmoco announced that Eliminate would be free, officially kicking off the free to play revolution on the App Store and energizing an incredibly vocal minority who were sure that this would be the death knell of iOS gaming in one fell swoop.

Since Apple rarely reveals statistics on both the sales of iOS devices and the number of apps downloaded (200 million device sales and 15 billion downloads, per last count.) if you want to delve any deeper than that you need to get third party analytics firms involved. Flurry is one (of many) of these companies, and they've currently got their analytics package installed in over 90,000 different apps spread across over 40,000 different companies. This gives them a massive bucket of data to run all kinds of different reports which they throw up on their blog from time to time.

The latest out of Flurry is that free to play games are responsible for 65% of the revenue in the top 100 grossing list, compared to only 39% earlier this year. If you're the kind of person who would rather see this data in chart form, well, you're in luck:

Now, I'm sure there are skeptics out there that right now are thinking to themselves, "Whoa, whoa, wait a minute. The top grossing lists go to 200. These numbers are skewed in favor of free to play by chopping off the bottom half of the list!" I followed that path of logic too, since it can often be easy to manipulate statistics to promote an agenda of sorts. However, after speaking to several developers with games all over the top 200, it seems that in calculations like this positions 100 to 200 (and beyond) aren't worth that much consideration because of the extreme bell curve of the top grossing lists making #200 essentially insignificant compared to #1.

What does this mean for iOS gamers? Well, the writing has been on the wall for quite a while now that free to play is taking over the App Store. It's not a hard decision for developers to make either when laying out plans for future games either. With a 99¢ paid game, your profits are completely tied to your chart positioning and your options are incredibly limited for promotion, often relying entirely on making your game free and crossing your fingers for a surge of sales when the sale is over. Comparatively, there's all sorts of neat tricks to make money from a free game, even with horrid chart position.

Thankfully, even though Zynga put the original bad free to play taste in everyone's mouth with Farmville on Facebook and many developers followed suit with similar iOS games that centralized around time sinks and pay walls, there is light at the end of the tunnel. On the Mac/PC side of things, games like League of Legends and recently Team Fortress 2 have been providing some fantastic "core-gamer" experiences while being totally free. I'm sure eventually games like these will filter down to mobile devices, as it's basically impossible to argue against the financial incentive being there through a massive customer base eager to download (and optionally pay for) free to play games.

  • Adams Immersive

    I’d be interested in analysis of just what KINDS of free-to-play are making the money. I’m guessing it’s the repeated-purchase kind (which I avoid—like “buy 200 gold") rather than the one-time-extra kind (which I like—like “buy another 20 maps”).

    • Rk

      Yeah, the real problem with all this "freemium" nonsense is that in many cases, the game is designed to suck more money out of the player's pockets than it would have without IAP. I'm totally fine with IAP that unlocks more levels, making the "free" game essentially like shareware, but sadly, most developers just put in some kind of in-game currency they sell as IAP and design the entire game around that.

      For a good example, take a look at Order & Chaos Online (which is not even free in itself, by the way). Before the first update, they sold subscriptions, which is totally fine, gold (which is farmable in-game as well) and "crystals" which can be used for vanity items, but nothing else. The game didn't feel like it was designed around that, with the slight exception of gold - extending your bag space costed quite a good amount of that, and you constantly ran out of room, so bigger bags were really needed. But, okay, you didn't have to buy cash to get them.

      Now, with the first update, they also sell "runes". These can be traded for high level epic item sets that are in many cases way better than anything you could possibly hope to get by just playing the game. They are also mad expensive, but they throw the whole game off balance. That's exactly how it shouldn't work, but of course, people buy these things, generating crazy amounts of money for Gameloft. Oh, and the update also made the game even easier, so people would get to level 60 faster ... one might think it's because the paid item sets require level 60. There's no other reason, the game's not old enough to have it's vanilla content nerfed already.

      I've got no problem paying a bit more for a game than $0.99, if it's worth my time. But I really have a problem with games that sacrifice their game design and balance for cash.

      • Eli Hodapp

        "But I really have a problem with games that sacrifice their game design and balance for cash."

        The thing is, only the worst freemium offenders do this. In League of Legends, for instance, you're on an even playing field regardless of whether you've spent $0 or have bought every single unlockable. Similarly, everything that isn't 100% cosmetic in Team Fortress 2 can be unlocked/earned through a loot/crafting system. I feel like a lot of people wouldn't hate free to play so much if their first experience with it was something like either of these two games, and not something closer to Farmville.

      • Rk

        But that's exactly the problem: you can make much more moolah with FarmVille-like clickfests, and these have game design that's centered around the player buying IAP. Most of the iOS "freemium" games are like that.

        I have no issues with the business models behind LoL and TF2, just like I have no qualms with Remedy offering some mild type of IAP in Death Rally. You really don't need to buy that and the "grind" to unlock the track and cars is actually adding incentive to play the game more.

        Sadly, the current trend is just not towards TF2/LoL models, but towards Smurf Village or whatever the game is called. Now of course both TF2 and LoL were initially not (or not planned as) freemium games, and had substantial financial backing, not to mention a development team that actually knew how to make games. You don't need either for making FarmVille clones, and it definitely shows.

  • Mike

    Personally I would buy another game than buy an In App Purchase. I have and probably will not ever buy an IAP.

  • Anonymous

    I love the Big Fish Adventure games that let you play through a nice chunk of the game and then present you with an IAP to unlock the full game.  No separate "lite" version  where you have to start over should you purchase the original; I think they play fair. Also, something like Pocket Frogs which lets you have fun without presenting you with that feeling of not being able to get anywhere without an IAP.

    Then you have the other side of the Spectrum --- sludge like "Circus City" which is a huge time sink with zero payoff. There's not one redeeming quality about this app. Almost minutes within the program, you hit wall a and it's wait for hours or pay up. I hope games with IAP similar to this style die a quick death.

  • Ecco6t9

    When this market crashes, it's going to be hard.

    • Michael Langford

      I'm not sure that's going to be happening. Small cheap gratification based things soar in popularity during recessions (lipstick and candy, and I assume apps).

  • Xyuan115

    That's definitely pretty eye-opening. Even though I regularly check the top 50 for top grossing games and always see freemium farmville/text battle type games dominating the charts, I didn't expect something this dramatic, even though the statistics only shows the trend from the top 100. Pretty shocking to me that people would dish out so much for virtual cash. I've bought plenty of iAPs for iOS games, but never the kind that are consumable like in the above mentioned titles, and most likely never will. Stuff like the DLC for Peggle, Jet Car Stunts, etc. are completely awesome. Not much to say about iAPs to buy virtual currency that hasn't been said though. They popped up as soon as the AppStore opened with titles like iMafia, and they're going to be here until the AppStore closes, if ever. People's choices I guess. I never found them to be addicting personally.

    • backtothis

      This is backtothis btw, accidentally left my name as my email username.

  • nickmorgs

    For me, NimbleBit are the only guys that have got the freemium model right.  I want to buy their ingame 'bux' just to support them.

    Zynga really should learn a lesson, but I doubt they will because, for some reason, people seem happy to pump hard earned cash in to a game that has little reward.


    • Ziggyeye

      what does NimbleBit do differently than the other freemium games? I still see, pay x bux to speed up process in their games too.

      • MattRix

        NimbleBit is different because they give you tons of bux for free all the time, rather than giving you a few at the start then making you buy the rest. It's a small difference, but a really important one.

      • Alanfalcon

        First of all, I'm addicted to Tiny Tower. But your comment doesn't address the point of how NimbleBit fits with the "good" kind of Freemium games like LoL. Yeah, you get free Bux all the time, but you can still speed things up by spending real money if you want. The core IAP model isn't fun or innovative. Yet, it's obviously been successful for them, to the detriment of the App Store (in my opinion).

  • rickerbh

    IAP becoming more popular via freemium games? Good news for Lodsys...

  • rickerbh

    IAP becoming more popular via freemium games? Good news for Lodsys...

  • Anonymous

    Wow. That's a lot of retards buying Smurf berries.

  • Marcus Fehn

    These numbers say nothing until you know how many games are in each category. I.e., if the Top 100 consisted of 61 paid and 39 free apps in January, but 35 paid and 65 free apps in June, nothing has changed in respect to the revenue per game.

    Plus, it'd be interesting to see just how much revenue was generated in January and June, to really understand how the freemium concept affected users' willingless to spend money on games. If the overall revenue/user on the Top 100 dropped, then freemium would've hurt the market as a whole, no?

  • Anonymous

    At the end of the day, the "core" gamers will continue to feel shunned or mistreated by games that target a casual audience. As a producer, designer and developer I can offer my professional opinion and say that F2P is here to stay. I will agree with Eli, a lot of studios are poorly implementing IAPs, but those "scams" aren't the ones making the real money. A well designed F2P App can be both fun and profitable. 

  • Charles Albert

    Most of those freemium games (specially those facebook-based) are total crap. Like that Tiny Tower shit, that beats the hell out of me why it keep getting five-star reviews everywhere. I guess the no-games for no-brainers market is rising.

    • Charles Albert

      i've meant farmville-based, teeheehee

      • Rk

        Tiny Towers is considerably well-crafted for a FarmVille-alike game, but I agree that it's nothing special really. I still play it for GameCenter achievements because it just works without me having to play it much - yeah, if you think about it, that's not terribly interesting game design indeed. It's a diversion for these boring five minutes you can't fill with anything else, but that's it.

  • Charles Albert

    Most of those freemium games (specially those facebook-based) are total crap. Like that Tiny Tower shit, that beats the hell out of me why it keep getting five-star reviews everywhere. I guess the no-games for no-brainers market is rising.

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