Revenue from freemium apps shoots up, paid ones stagnate on both Android and iOS

Revenue from freemium apps shoots up, paid ones stagnate on both Android and iOS
Who said freemium will never make it in the cutthroat world of apps? Looking back , the model has apparently proven very successful for developers, both on iOS and Android. AppAnnie tracks more than 700,000 applications, and found out that revenue from freemium iOS apps has increased four times for the last two years, while just in 2012 that same revenue for devs in the Play Store is up 3.5 times.

Meanwhile the income from paid apps has stagnated on both platforms. Top apps on them are increasingly moving to the freemium model, and the prediction is that by 2015 revenue from it will top $5.6 billion, a full 64% of the total take-home from apps.

Freemium is not suited for every app, of course, and people are willing to pay for a great product no hesitation, but the trend is to move towards no upfront costs for installing an application on your phone or tablet.

via GigaOM

Revenue from freemium apps shoots up, paid ones stagnate on both Android and iOS
Revenue from freemium apps shoots up, paid ones stagnate on both Android and iOS

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25 Comments

1. wendygarett unregistered

How does the freemium apps earn $$$? Can someone educate me?

3. RaKithAPeiRiZ

Posts: 1488; Member since: Dec 29, 2011

Unlock in game special weapons ,or buy virtual coins in a game

4. wendygarett unregistered

But freemium is purchased by freebie... They will not pay any single cent for the virtual coins lol

7. taz89

Posts: 2014; Member since: May 03, 2011

Example is temple run you can collect coins in games to get power ups etc or you can buy coins with actual money... Dead trigger is another example you can buy weapons with actual money to make progressing the game easier... The term freemium means the game is free to install you can actually complete the game without buying anything but there are downloadable content such as a new car or weapons etc... It's the same idea as console gaming where you can buy extra stuffs if you want...

17. techspace

Posts: 1037; Member since: Sep 03, 2012

most of the fremium apps come with ads and an option to remove ads with the an in app purchase, which means that if a freeby doesn't pay anything to the developers, they can still earn money from the ads there are a few fremium apps that are good, free and don't have ads......these apps/games are usually very tough to proceed without making in app purchases

9. darkkjedii

Posts: 30836; Member since: Feb 05, 2011

Ads...

12. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

Yea look at all those ads in Temple Run...oh wait

13. darkkjedii

Posts: 30836; Member since: Feb 05, 2011

That's one of thousands of free apps. As I said ads

19. techspace

Posts: 1037; Member since: Sep 03, 2012

actually, in the apple app store, there are thousands of premium full version apps that are completely free and without ads,the developers usually make great apps and give those apps for free and if the app becomes popular, then they make a newer paid app that is better and they continue to provide good updates for the older app that is free....this is also a good way of earning money

21. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

http://en.wikipedia.org/wiki/Freemium knowledge is power my friend

22. darkkjedii

Posts: 30836; Member since: Feb 05, 2011

No need to click on that bro, I'm aware if why they put ads into free apps. I didn't say it was the only revenue generator.

23. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

Apparently you do. Freemium apps, which is what this article is about...get their revenue from "advanced features, functionality, or virtual goods" i.e. ingame content that can be purchased. Everyone I have seen does not have ads "Bro"

15. darkkjedii

Posts: 30836; Member since: Feb 05, 2011

Must everything b a debate?

14. techspace

Posts: 1037; Member since: Sep 03, 2012

with the ads and in app purchases

2. RaKithAPeiRiZ

Posts: 1488; Member since: Dec 29, 2011

Freemuim is the way foward , or they should include some mobile billing feature to pay for apps since there are still many users without creditcards

18. techspace

Posts: 1037; Member since: Sep 03, 2012

gift cards.....

5. The.Dark.Knight.Rises

Posts: 72; Member since: Oct 24, 2012

Soon every app will have to be free.

6. lzsbleach

Posts: 155; Member since: May 20, 2012

I hate games that charge for virtual coins, I would rather buy an app and have everything unlock. They know what they are doing though because usually to buy virtual coins it will run you $5 and up.

8. networkdood

Posts: 6330; Member since: Mar 31, 2010

I do not go for the paid apps too often - my usage of any app varies at any given time and spending money for an app that I may not use in a month is not worth for me.

10. darac

Posts: 2156; Member since: Oct 17, 2011

Freemium is good if executed properly - there's a very delicate balance that needs to be met. You must be able to pass a game without spending real money, the offers need to be unobtrusive and cheap enough, yet they must ensure enough revenue return. In short, the game must be good enough to make you spend at least a few bucks which is, in the end, a really good system for consumers.

11. Iphone4 unregistered

I don't play these freemium games. And don't spend more then £1 for any app.

16. Stuntman

Posts: 843; Member since: Aug 01, 2011

Freemium seems to be working quite well for PC games. It's only natural that it would work on mobile devices as well.

20. marcdunn82

Posts: 10; Member since: Oct 03, 2012

I would also love to try out the free version of an app before investing in it and that it anouther way they make money from a free app.

24. Leo_MC

Posts: 6715; Member since: Dec 02, 2011

I think freemium apps should be marked so that people - such as myself - don't waste their time download, install and partially use something that, at a later moment, needs them to pay to upgrade or - which is worst - to keep it's functionality. I'm not for banning this practice, just let me know if an app will be asking for my money in the future so I know to stay away from it.

25. lzsbleach

Posts: 155; Member since: May 20, 2012

At the same time if you like a free app you should buy the paid version. This supports the developer and can also bring other developers (from IOS and other platforms) to Android which can contribute to a better app Market. People dont really get this and complain about spending 2 dollars on a app; come on Playstation and Xbox games are $60, whats $2 if you really like a game that you got to try for free.

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