freemium

How an increasingly fragmented mobile world helps Gameloft

The mobile world is getting crazier, and that suits Gameloft just fine.

The upcoming year should see an even greater diversity of mobile devices, including multiple designs, processors, and operating systems. Gameloft, with an army of developers devoted to mobile games, believes it is best suited to handle the different products, whether that means the iPhone or an Android tablet.

"We're structured to handle fragmentation," Baudouin Corman, vice president of publishing for the Americas region for Gameloft, says in an interview. "It's a dynamic market where different companies are bringing differentiation. We'll benefit." … Read more

Wanna make money on apps? Give them away

The app business is increasingly banking on the notion that virtual currency in a game could be worth real money--and a lot of it.

In-app purchases, which include virtual cash, weapons, levels, or extra features, are poised to dominate app revenue in the coming years, according to research firm IHS. In-app purchases already accounted for $970 million in sales last year, or 39 percent of the market. By 2015, that figure will grow to $5.6 billion, or 64 percent of the market.

"In 2012, it will become increasingly difficult for app stores and developers to justify charging an … Read more

How EA is jumping on the 'freemium' bandwagon

Electronic Arts, best known in the mobile world for its stable of premium franchises such as "Madden NFL" or "Need For Speed," is increasingly trying its hand at free games.

The company is offering four games for free in the Apple App Store right now, but plans to expand that number to between 10 and 14 by March, an EA executive told me. Rather than an upfront payment, it's looking to generate revenue through in-app purchases.

The shift in strategy is emblematic of the growing trend of "freemium" games, which are free to … Read more

If you build it, they will come

Ever wonder what it would be like to own your own island? Well, with Paradise Island for Android, you can at least simulate the experience. In this "freemium" simulator game, you are the owner of a small sector of a tropical island, on which you work to build a perfect resort getaway. As you build more attractions and entice more tourists, your wealth grows, and eventually (if you're good enough) you can expand your empire to cover the entire island.

With enough money, you can build resorts, restaurants, casinos, hot dog stands, shopping centers, monuments, pyramids, waterslides, … Read more

Study: iOS, Android users average $14 per in-app buy

The average spent on virtual goods in free to play mobile games is enough to buy what could be more than a dozen copies of their paid counterparts, a new study has found.

Research firm Flurry Analytics today has released data from a study of the buying habits of 3.5 million consumers across the top applications on Apple's iOS and Google's Android platforms. The big number that's been pulled out of all that data is $14; that's the average amount of money spent per transaction from within so-called "freemium" games, or free titles … Read more

'Freemium' antivirus firm Avast gets funding boost

The security vendor Avast has received a $100 million investment from private equity firm Summit Partners, in exchange for a minority stake in the company.

Avast chief executive Vince Steckler described the $100 million deal on Monday as "a vote of confidence in our disruptive 'freemium' business model," which sees the vendor giving its product--including updates--for free to millions of non-corporate users.

The company's current model is based on providing its antivirus program, which contains similar features to competitors' paid-for offerings, to home users for free. As with rival antivirus firm AVG, this is done in the … Read more

From feature to product the free-mium way

One of the struggles in developing software is figuring out which features are part of a bigger product and which ones may be products in and of themselves.

A case in point is Zurb, which makes the Notable application for Web site feedback. In June, Zurb launched a simplified version of Notable called Bounce, which it viewed as a demonstration of just one of Notable's features. Little did Zurb's team know that Bounce was not just a feature, but a new product that intrigued a broad user base.

Bounce saw these results:

The Bounce site went from zero to more than 30,000 links pointing to it in first seven days after launch. Bounce went from zero to about 150 countries using the tool in first seven days after launch. In its first month, Bounce made it to the No. 4 spot in Google search results for "bounce."

While these statistics will surely change over time, they are impressive. So what made this launch successful? … Read more

Foursquare gets down to business

For as far back as we've been discussing social networks, there have been question marks around the best ways to monetize users. To date, advertising has been the primary strategy, with virtual goods starting to pull in some serious revenues.

But the challenge with advertising is that users tend to ignore ads that are not highly targeted. Even precisely targeted ads are largely ignored, which is why you see more and more of them taking up screen real estate. This has also led to more sites adopting a "freemium" content model.

And targeting is even more of a challenge when users are mobile, but mobility also introduces a whole new way to interact with and monetize users.

One of the more interesting companies in the location-based services (LBS) space is Foursquare. Surely, you've seen some message in your Twitter stream telling you that your friend is at some location or is the mayor of whatever, or has unlocked a badge.

And while Foursquare has nowhere near the user base of Facebook or Twitter, the users are very valuable as they promote the places they go and things they do simply by mentioning them in their communication stream.

According to The New York Times, Foursquare plans to distribute a new analytics tool and dashboard in the coming weeks that will give business owners access to a range of information and statistics about visitors to their establishments. This means that businesses can more effectively target users with specific offers and ads.

But what it really provides is a way for Foursquare and other location-aware services to make money.

Going back to 2001, I remember talking about location-based services while working at OmniSky, a way-too-early provider of hardware and software that turned handheld devices like the Palm V into mobile devices. We even acquired an Israeli company called NomadIQ to deliver location-based content.

Ten years later we're just starting to see location-based offers roll out in the U.S.--better late than never?

Many of the early international LBS were very basic social networks (primarily dating) and the demand for such services in the U.S. simply wasn't there, partially because of social mores and also partially because mobile devices have evolved fairly dramatically. … Read more

A simple formula to gauge a freemium model's success

For all the value that open-source development provides, Red Hat CEO Jim Whitehurst recently reminded the industry that open source may be more potent as a business model than as a development model:

Open-source development is great and all that, but I think more of the value of Red Hat comes from our open-source business model than from the development model.

The truth of this statement came home clearly to me in a conversation with Michael Mullany, vice president of marketing at Engine Yard, a cool company that provides on-demand deployment and management solutions for Ruby on Rails applications. Mullany … Read more