The brave new world of freemium gaming

The past few years have seen a rise of a new type of game; dubbed “freemium,” these games basically advertise as being free to play, but if you choose to pay, additional options are unlocked. Depending on the game, the charges are based on a monthly subscription, usually around $15, or a one-time fee that might give you one item, like a hat or weapon.

You have probably played some of these games without even knowing it. Popular titles such as Angry Birds and Farmville are both examples of freemium games. With huge social media outlets like Facebook, Android and iOS hosting these games, they have reached a substantial user-base in a short amount of time. Even though most of these games are free, with revenues generated by in-game advertising or virtual-good purchases, the money being made is so substantial that the question for these companies isn’t whether to go public, but WHEN.

Facebook and mobile games are one example of freemium gaming and would fall under the category of “one-time fee.” Another category would be the subscription based. DC Universe, Lord of the Rings Online and Dungeons and Dragons Online would all fall under the second category. These games offer huge amounts of content and provide hundreds of hours of game play…for free. The monthly subscription comes into play for the hard-core gamers who “need” that extra mission or weapon or character class.

If you feel that the gaming market is saturated, you’re right. There are a lot of games out there, and it can be very difficult for a game or developer to get noticed. Going, or starting out as a freemium title ensures that price won’t be an issue in attracting an audience. Going freemium can be used as a reward to the user base of a very successful product, as with Team Fortress 2. It can also be a response to a crowded market, as with DC Universe Online, going free to play in the crowded MMO market. Games can also be freemium by design, as with the famous Angry Birds. Once you have the user base in place and emotionally invested, you can charge them for that little extra something. They will end up shelling out for free games.