14 DAY TRIAL // The revenue derived from in-app purchases for mobile video game apps are set to increase to 5.6 billion dollars (4.28 billion Euro) according to estimates from IHS, more than the money brought in by the actual sale of those apps.
The freemium business model is rapidly becoming the fastest growing of the smartphone market and those who develop video games for mobile devices will face pressures to drop the upfront price in order to get customers and stay competitive.
Jack Kent, who is the senior mobile media analyst at IHS, stated, “Smartphone users overwhelmingly prefer free apps to paid apps, as we estimate 96 percent of all smartphone apps were downloaded for free in 2011.”
Kent added, “In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content. Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.”