Free In-App Purchases Will Change…. Little?

Apple’s announcement that they are going to start letting free applications sell in-app content seemed to be a big one. Even game changing.

But, the more I think about it, the more I think there will be great hesitation for many developers (and I’m thinking mostly of game developers) to make the plunge.

Now, some apps clearly benefit from this. Comics for example is a comic book reader that sells more downloadable comics. It was $0.99 before today because they had to be. But now, they are free and will make their money on selling individual comics. Same with book readers, or other similar models. Even a game like Tap Tap Revenge 3 would benefit…. though sitting at the #1 spot at $0.99 makes me think they aren’t going to change their price anytime soon.

So are game developers suddenly going to release free games with add-on purchases? I don’t think so, and here’s why.

Lite versions aren’t always in your best interest.

I know customers want there to be a lite version of every game that exists… but, depending on the game itself, a lite version is not in the best interest of the developer. Lite versions can hurt the sales of a full version. This can be for a number of reasons, primarily that people simply didn’t like the game as much as they thought they would. For this sub-section of games, Lite’s hurt.

Now, if you release a Lite game and find it’s hurting sales. The easy solution? Pull the Lite game. But if your Lite is your Full version too, well, there’s not as much you can do about it, nor will you even likely know it’s a problem.

Lite Versions are a Good Second Push

Most games don’t come with a Lite version on Day #1. This isn’t an accident. Your game is going to get the most press on the day it launches, and you want people to buy it sight unseen.

So, instead, you wait until the game has lost momentum, and release a Lite version then — hoping for a second push up the charts.

Here’s the slow decline in ranking of Gameloft’s Modern Combat: Sandstorm game:

modern

When did they release a Lite version? Yep. 7 days ago. Exactly when their game fell off the top 100 paid apps (dark blue line).

No Promo Codes for in-app purchases

Apple offers free promo codes for people to download full versions of apps. This is the primary tool developers have to promote their games with review sites and forums. Without these, it’s going to be harder to convince people to try your game.

Now, I don’t personally care. At TouchArcade, we pretty much buy every game we consider, but for a small time developer, looking to get the word out, this will be a major handicap.

Charts Matter

The next thing is that the Top 100 lists matter. They drive a ton of sales. Are you better off competing for a spot on the top 100 Free apps or the top 100 paid apps? I’m not sure what the answer is, but top 100 free requires some insane volume of downloads. Most people have focused on the marketing to the Top 100 paid. I’m not sure what drives sales into the Top 100 free, and most developers probably don’t either.

This also makes it strange to release both Full and Lite + DLC versions, in that you are splitting your sales across two apps. Maybe it’s not going to be a big deal, but this is uncharted waters.

Now, Apple has gotten Ngmoco to take the plunge and offer Rolando 2 as a free + DLC game. And a game like Eliminate is a natural fit for this plan.

But, unless there are some real success stories from smaller devs, I’m not sure how much this will affect most developer’s short term plans.

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21 Responses to Free In-App Purchases Will Change…. Little?

  1. You’re right, there’s definitely a risk here for developers, but I think long-term this is going to be very game changing. I actually think it’s going to help drive the “premium” games that are able to command a higher price point, while changing things for a lot of the $.99 apps that are out today.

    For us, we’re going to give it a shot and see. We talked about it, and have decided that our game Gravity Sling is going to release for free with in-app purchase. Instead of having a Lite and Full version, we’re going to count on people enjoying our game enough after trying the first few levels that they’re willing to spend $.99 to purchase a few more. We were going to submit it to Apple today, and are delaying that a couple days to get the In App purchase working, so we should know soon.

    Long-term I’m certainly hoping this works out as I think it’s better for the consumer but we’ll see what happens, and hopefully I can back this up with sales numbers in a few weeks too!

  2. Kris Jones says:

    Some great insight here.

    The first thing that we need to watch is how well ngmoco:) does with the recent Rolando 2 for free.

    It is something that Pocket Monkey Games will look to in the near future to see if it is a viable business strategy, but as we see it these free games with in-app purchases will fare just as well as LITE versions in competing for ranks with a likely similar conversion rate for purchasers.

  3. Arnold Kim says:

    @brain – good luck. very interested to see how that goes. :)

  4. Tom says:

    80% of people pirating your app and not paying for it.
    If you could reduce this (decrease the unpaid overheads from piracy – server costs, bandwidth etc) then wouldn’t here be some interest?

    Seems te antipirqcy angle wasn’t really even mentioned in This article.

  5. Lazrhog says:

    Well at Lazrhog Games, the games themselves don’t really lend to in-app purchases. I don’t think developers should really jump on the bandwagon and invent ways to have in-app purchases where none were really needed.

    I think Ngmoco have acted responsibly in their first release, as it doesn’t feel like anyone is being ‘ripped off’. That would always be my concern, in that if a game didn’t merit an in-app purchase, then you risk alienating your user base.

    The point on piracy is a good one, although I would like to see Apple introduce a 1 hour try before you commit-to-buy policy to be honest. This would get rid of this whole ‘Lite’ infestation of the Appstore, and remove the so-called-ethical reasons for piracy that they spout.

  6. Benjohn says:

    Good thoughts – promos hadn’t occurred to me.

    I think it’s unlikely apple will stay still with things as they are. Speculation:they may introduce
    * a new chart that assists a free App with IAP.
    * a promo system for IAP.

    Also – perhaps the “requirement” that a Lite App not be a demo will be lifted. In this case, a demo can then be time limited, or can very directly reference full version features, which could be quite powerful.

    Think you’re right though that not being able to pull a lite that’s killing sales is a big issue.

  7. I just want to respond to the ‘What about piracy’ comments. For me the anti-piracy effect of introducing IAP is so insignificant as to have absolutely no effect on my decision to go with IAP or not.

    If you are fighting piracy by implementing IAP, you are fighting the wrong battle in the wrong place.

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  9. Amr says:

    Another point: I paid what, $6.99 for Modern Combat? And I couldn’t pass the 6th level. If I were to be be paying for this game like Rolando 2 is being sold (per level), the developers wouldn’t have made as much as they made from me.

  10. Matthew Frederick says:

    I don’t get how Apple’s going to handle reviews now. This would seem to imply that people who downloaded the freemium version and didn’t buy the upgrade would still be able to give the app a lousy rating, quite possibly because they didn’t want to pay for the upgrade. Apple can’t reasonably restrict reviews only to people who do upgrade because there are plenty of models (like the comic book example, or similar subscriptions) where a review without in-app purchase would make plenty of sense (10 free comics included, certain magazines or books are free, etc.).

    Why would a dev — especially of a game app — risk all of those thoughtless crap reviews from non-invested users?

  11. Duncan Lowrie says:

    Just happened upon this post while trying to look into whether or not to utilise IAP for our first game. This post, and Brian’s (Riptide Games) blog, has nudged us towards the decision to release a paid-for app initially with full functionality, and a “lite” app later on, with individual level packs being made available as IAPs, as well as links to the more economical “paid-for” version… Some more thinking required, but this seems to be the way to go…

    Hopefully be getting this out within the next few weeks, so it’ll be interesting to see what happens.

    Thanks for this post Arn… Much appreciated.

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