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What’s the right price for mobile games?

By | November 29, 2013

free_vs_premium

There are loads of games out there. The mobile market is growing with thousands of new games every day. That’s why it’s so important to have a good understanding of your business model and a good marketing strategy based on that. Creating a good game is one thing, but to reach a big audience to sell it to is a totally different thing. Both are key to success. Thinking of a good monetization strategy before even developing your game is a good start.

There are three major models of making money from games:

  1. Free to Play
  2. Low Tier games
  3. Premium (High Tier) games

Free to Play
Today the majority of mobile games are Free to Play. Because of the sheer mass of games that launched they had become a commodity and therefore a race towards a zero price point had become inevitable. Developers have become smart and today by far and large the revenues that are achieved are also mostly from free apps. For a customer it seems to be a good thing: Trying a game without any risk. Free apps generate income through advertising and/or in-app purchases. Free is a great model for a game that is trying to reach a very broad, large audience. It is not necessary to use an expensive, known brand to get the player attention, but at the same time consumers have not invested anything and will easily leave again. Players will also only spend money if your game is fun enough and there is a need to spend money. Not every game is the right game for free to play and there are still plenty of games that launch with a price tag every day.

90% of apps are FREE (Flurry, 2013)

Low Tier Games
Mobile Stores, like Apple’s App Store, work with tier pricing. You can choose different tier’s to determine your games’ price. Low tier’s are the most common ones, varying from €0,89 to €2,39 (the tiers are currently under review, so possibly they will be raised to €0,99 – €1,99 – €2,99 and so on). The gesture is the same: you have low tier prices < €4,99 and high tier prices of > €4,99. The low tier prices have the most competition. Since you compete with Free to Play games, your users expect way more of your game because they have to pay for it. You’ll only get one chance, so make sure it lasts. If you don’t deliver a unique, fun and bug-free game, you’re done for. Also advertising and (most ways of) in app purchases are probably not the best choice. People already paid for the game, so why do they need to pay more? Games in this price range are most likely the hardest to market. Make sure you team up with a good publishing or marketing partner.

http://www.targetgamers.net/wp-content/uploads/2013/11/blog_pricetable.png

Premium games
The games which are in the higher price tiers are called premium games. You work with a whole other crowd here, since not many players are too happy about paying a high price for a mobile game. You compete with strong licenses and niche games in this area. Games that already have a strong fan base who are willing to pay for a great game. premium games are known for a longer and more difficult production process. That explains the higher price tier. But don’t expect casual players to understand this. They are not your target here. Make sure you have the right contacts with partners like Apple or Google before you launch. They hold the keys to a lot of potential customers, so treat them nicely.

Of course there are a lot of ways to play around with these models, like adding content or having temporary sales or price drops. The most important thing to know is that you really need to think of how you want to make money from your game before you develop and a strategy before launching.

Don’t believe that because everybody is doing Free to Play, you have to do so as well. Take Plants vs. Zombies 2 – this game would have probably not reached that many millions of people in a short period of time but maybe EA would have made similar revenues from a premium game.

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