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July 19, 2013 12:56 pm GMT
The freemium debate continues to rage on. Some say it’s the future of how business will be run, while others say it’s synonymous with casual games (read: not for hardcore gamers). Now the tide appears to be changing for the latter group, spurred by the success of companies like Supercell(Clash of Clans’ maker) and King(which makes Candy Crush), that have inverted the model for free and picked up huge, dedicated gaming audiences in their wake. Rajeev Chand, managing director and head of research for Rutberg & Company, said that one of the biggest drivers moving everyone to freemium is simply that in-app purchases are generating a whopping 70 percent of game revenues today. Moreover, venture capital investment in mobile gaming was $224 million in the first half of 2013, as compared to $107 million over the same period in 2012, he said. He noted that this year’s investment has been buoyed mostly by Supercell’s $130 millionround. To look at it over the years, venture investment in mobile gaming was $185 million in 2012, $228 million in 2011, $118 million in 2010, $59 million in 2009, $35 million in 2008, and $14 million in 2007. He explained: “The takeaway is that mobile gaming has seen a significant increase in venture investment over the 2010-2013 time period as compared to 2007-2009 because of the high profile successes and exits such as Rovio, Supercell, Ngmoco and Omgpop.” Rovio makes the Angry Birds franchise, Ngmoco was acquired for $400 million in 2010, and Omgpop got acquired by Zynga for $200 million after its smash-hit, Draw Something (although Omgpop has since been shut down). Chand said: “Freemium is here to stay… Gamers hate in-app purchases, but they are still playing and buying.” Hopping on the freemium bandwagon The trend seems to have resonated with several game companies, which are moving over to freemium models, in spite of having enjoyed success with traditional monetization models. Boomzap Entertainment is an eight-year-old studio that has had many of its titles published by big names such as Big Fish Games and Reflexive Entertainment. The company has survived, maintaining its full-time employee base of 85 on its stable of paid games that are generally priced at the $14 mark. Its co-founder, Allan Simonsen, is vocal about “abhorring” the freemium model. And yet the company is breaking away from its tried-and-tested base to get on the freemium bandwagon. Simonsen said the
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/lCoJCzlu3ZA/
Freemium Is Irresistable, Even For Successful Game Companies
The freemium debate continues to rage on. Some say it’s the future of how business will be run, while others say it’s synonymous with casual games (read: not for hardcore gamers). Now the tide appears to be changing for the latter group, spurred by the success of companies like Supercell(Clash of Clans’ maker) and King(which makes Candy Crush), that have inverted the model for free and picked up huge, dedicated gaming audiences in their wake. Rajeev Chand, managing director and head of research for Rutberg & Company, said that one of the biggest drivers moving everyone to freemium is simply that in-app purchases are generating a whopping 70 percent of game revenues today. Moreover, venture capital investment in mobile gaming was $224 million in the first half of 2013, as compared to $107 million over the same period in 2012, he said. He noted that this year’s investment has been buoyed mostly by Supercell’s $130 millionround. To look at it over the years, venture investment in mobile gaming was $185 million in 2012, $228 million in 2011, $118 million in 2010, $59 million in 2009, $35 million in 2008, and $14 million in 2007. He explained: “The takeaway is that mobile gaming has seen a significant increase in venture investment over the 2010-2013 time period as compared to 2007-2009 because of the high profile successes and exits such as Rovio, Supercell, Ngmoco and Omgpop.” Rovio makes the Angry Birds franchise, Ngmoco was acquired for $400 million in 2010, and Omgpop got acquired by Zynga for $200 million after its smash-hit, Draw Something (although Omgpop has since been shut down). Chand said: “Freemium is here to stay… Gamers hate in-app purchases, but they are still playing and buying.” Hopping on the freemium bandwagon The trend seems to have resonated with several game companies, which are moving over to freemium models, in spite of having enjoyed success with traditional monetization models. Boomzap Entertainment is an eight-year-old studio that has had many of its titles published by big names such as Big Fish Games and Reflexive Entertainment. The company has survived, maintaining its full-time employee base of 85 on its stable of paid games that are generally priced at the $14 mark. Its co-founder, Allan Simonsen, is vocal about “abhorring” the freemium model. And yet the company is breaking away from its tried-and-tested base to get on the freemium bandwagon. Simonsen said theOriginal Link: http://feedproxy.google.com/~r/Techcrunch/~3/lCoJCzlu3ZA/
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