or Connect
AppleInsider › Forums › Mobile › iPhone › In-app purchases from 'freemium' titles account for 71% of iPhone app revenue
New Posts  All Forums:Forum Nav:

In-app purchases from 'freemium' titles account for 71% of iPhone app revenue

post #1 of 15
Thread Starter 
A new study showcases the dominance of "freemium" titles on Apple's iOS platform, as in-app purchases made through free apps accounted for 71 percent of total iPhone app revenue in the month of February.

Distimo


The statistics published this week by analysis firm Distimo show that paid applications were responsible for just 24 percent of total iPhone app revenue in February. The remaining 5 percent came from in-app purchases done through paid applications.

Unsurprisingly, the biggest earners among "freemium" iPhone apps are games, with Clash of Clans taking the top spot for February. The only non-game to crack the top 10 was TurboTax SnapTax, which took tenth place ahead of the coming U.S. tax deadline.

The average revenue per device among the top 10 apps ranges widely, from What's the Word earning 37 cents, to Rage of Bahamut taking in $7.04 per device.

Among the top 250 grossing iPhone apps, 170 are free with in-app purchases, while 53 are paid with in-app purchases. The remaining 27 applications are paid-only.

Distimo


Broken down by country, users in Japan spend the most on in-app purchases, with an average of more than $3 per title downloaded. Distimo even excluded Puzzles & Dragons, the No. 1 grossing app in Japan, as it would have skewed the results and driven the average revenue per device in that country even higher.

In comparison, the U.S., U.K., and Germany all spend about $1 per download on average, meaning the average download in Japan is worth more than those three countries combined, excluding Japan's most popular title.

While "freemium" apps account for the most revenue, they also generate less revenue per download than a paid application, through which a developer collects money up front.

"Freemium" titles have been a source of controversy, as they are frequently downloaded by children who can rack up charges on their parents' App Store account. That prompted Apple to add a notice last week highlighting when a free application includes in-app purchases.

Apple was even sued in 2011 and was accused of collecting "millions of dollars" from unauthorized in-app purchases made by children. Apple settled the case earlier this year and offered $5 iTunes credits to the complainants.
post #2 of 15
although i'm often told i act like a child, i'm not. full grown adult here.

i downloaded the popsci app just over a year ago and bought a 1-year subscription. when i did so i reminded myself that i needed to disable the auto-renew "feature" (and then went off and did something else.) about a month ago, remembering my subscription was about to expire, i reminded myself again to go disable auto-renew (because at this point i really did not to want to renew; love the print magazine, not so much the digital version.) i couldn't find where to do that right away and then got distracted by something else. fast-forward a month and there's a charge on my card for another year.

yes, it's my responsibility and i'll eat the charge but you'd think that if apple can repeatedly send a message to how-many-hundreds-of-millions of ios users that there's an update available, they could also send a reminder to people on auto-renew saying they're going to charge your card or else, with a direct link to the app store app to disable auto-renew. of course, that would reduce revenue.

(and yes, i've since disabled the damn thing ... although i also think you ought to be able to do that from the individual apps as well as the app store app ... the first place i looked to do that was the popsci app.)
"Personally, I would like nothing more than to thoroughly proof each and every word of my articles before posting. But I can't."

appleinsider's mike campbell, august 15, 2013
Reply
"Personally, I would like nothing more than to thoroughly proof each and every word of my articles before posting. But I can't."

appleinsider's mike campbell, august 15, 2013
Reply
post #3 of 15
Personally I hate freemiun titles. Just let me pay for the app & be done with it.
iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
Reply
iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
Reply
post #4 of 15
Quote:
Originally Posted by Pooch View Post

although i'm often told i act like a child, i'm not. full grown adult here.

i downloaded the popsci app just over a year ago and bought a 1-year subscription. when i did so i reminded myself that i needed to disable the auto-renew "feature" (and then went off and did something else.) about a month ago, remembering my subscription was about to expire, i reminded myself again to go disable auto-renew (because at this point i really did not to want to renew; love the print magazine, not so much the digital version.) i couldn't find where to do that right away and then got distracted by something else. fast-forward a month and there's a charge on my card for another year.

yes, it's my responsibility and i'll eat the charge but you'd think that if apple can repeatedly send a message to how-many-hundreds-of-millions of ios users that there's an update available, they could also send a reminder to people on auto-renew saying they're going to charge your card or else, with a direct link to the app store app to disable auto-renew. of course, that would reduce revenue.

(and yes, i've since disabled the damn thing ... although i also think you ought to be able to do that from the individual apps as well as the app store app ... the first place i looked to do that was the popsci app.)

Apple acutally does do this.  I received two notices about my iTunes match renewing.  The problem is that you weren't being billed by Apple, but the app.  The charge of course gets routed through your iTunes account but Apple wouldn't have known that you had auto renew on your account with another company.

post #5 of 15
Quote:
Originally Posted by saarek View Post

Personally I hate freemiun titles. Just let me pay for the app & be done with it.

I don't mind freemium titles if you can actually play or use the app for free.  I play Clash of Clans and have never spent a penny on it.  I enjoy messing around with it and it is a decent time waster.  The same for Real Racing 3.  The apps that require you to buy things to continue playing irritate me however.

post #6 of 15
Quote:
Originally Posted by Pooch View Post

i downloaded the popsci app just over a year ago and bought a 1-year subscription. when i did so i reminded myself that i needed to disable the auto-renew "feature" (and then went off and did something else.) about a month ago, remembering my subscription was about to expire, i reminded myself again to go disable auto-renew (because at this point i really did not to want to renew; love the print magazine, not so much the digital version.) i couldn't find where to do that right away and then got distracted by something else. fast-forward a month and there's a charge on my card for another year.

This is where the Apple Reminder app, which is in every iPhone and iPad, comes in handy. 

post #7 of 15

I wonder how many in-app purchases are upgrades from the free version to paid? My wife downloaded the free version of some game and the ads were so intrusive she decided to buy the paid version. Would that count in the figures?

post #8 of 15
They are using the term Freemium too broadly.

There's nothing wrong with IAP--it can still mean "just let me pay once and be done." It can buying a level pack on top of an already free game. It can mean a legitimate subscription. It can mean an optional donation. It can mean a demo that you decide to buy, without the inconvenience of a separate app download.

What bugs me isn't all IAP, it's certain specific kinds:

- CONSUMABLE IAP that gets used up

- A game balanced to make you need IAP without knowing it going in

- An app designed to trick parents (rarely if ever happens--seems to be the parents being stupid mainly)

- Pay-to-win multiplayer

- Purchases that are lost if you re-install or use a different device

Some great games have IAP, but optional and not encouraged--like Jetpack Joyride; who ever complains about the IAP in that? Or in other perfectly fine ways.

What % of revenue comes from the BAD kind of IAP? This study offers no help--just a misuse of the term Freemium.
post #9 of 15

I guess this makes sense. Especially if it accounts for when you download the MLB or NHL app and proceed to buy the season's worth of games with it for 50-100 bucks

post #10 of 15
Quote:
Originally Posted by gwmac View Post

I played my favorite freemium app called Modern War over a year and never spent a penny. But the game is so fun and addictive and now they have added factions and wars and found myself spending $20 on some in game gold. But I think that is a small price to pay for an app I have enjoyed over a year so no regrets.

But some of the very top players spend thousands. One guy named Ferr actually has spent over $20,000 on this game since he has to be first in every challenge and task. Now that is just crazy. Anyone that plays modern war has probably heard of Ferr's emperors and PUN factions.

Thank you for mentioning the game.  Now I have *ANOTHER* game to resist temptation on....  Gah!!!

 

I used to play Mafia Wars quite a lot, at one point, I could start a new character and take it (manually, without cheating!!!) to level 500 in 3+ hours :P

 

I really need to keep away from these sorts of games 1smoking.gif

post #11 of 15

And in another study, 71% of iTunes revenues were shown to result from children's purchases on their parents' devices without permission.

post #12 of 15

That's kinda a shame because where the money is app devs must follow.  I dislike freemium.

post #13 of 15

I'm not a huge fan of freemium titles. I've tried a few of them and have enjoyed a few of them, but I have never spent a single penny. 

 

Most of the freemium titles require very little skill or strategy. The dumbest player in the world could also be the #1 player in the world, because advancement is based mainly on how much money somebody is willing to spend. I would be ashamed to be the top player in some of those freemium games, because all that means is that you are the person who has spent more money than everybody else, hardly something to be proud about. I'd rather buy a new Mac Pro when that comes out instead of pumping thousands into a silly game, but to each their own.

 

Having said that, I have no problems with freemium games being on the app store. After all, nobody is forcing anybody to play them.

 

People with no patience and little self control should probably stay away from freemium games.

post #14 of 15
Quote:
Originally Posted by nht View Post

That's kinda a shame because where the money is app devs must follow.  I dislike freemium.

Agreed. Team Fortress 2 is the only freemium game that I've ever played that didn't feel like a cynical attempt to bleed its players dry (and many might even disagree with me on that game).

As a developer, I want everyone who downloads my app to enjoy the full experience and not feel ripped off. The freemium model makes me feel very uneasy. It's not a business model that's easily compatible with a quality user experience.
post #15 of 15
I hate freemium "games". They are devoid of gameplay. When I read reviews on the app atore that consist of "it's addictive!" I want to hulksmash them in the genitals.

These apps are a POINTLESS waste of time. Can't these people go back to feeding their life savings into poker machines and stop diverting developers away from creating novel, memorable and discrete gaming experiences?
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPhone
  • In-app purchases from 'freemium' titles account for 71% of iPhone app revenue
AppleInsider › Forums › Mobile › iPhone › In-app purchases from 'freemium' titles account for 71% of iPhone app revenue