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The fall of Angry Birds (treysmithblog.com)
316 points by bootload 1005 days ago | 183 comments



"Last year I held a special webinar that was invite only and everyone had to sign an NDA before attending. On this webinar I explained the current state of the mobile game industry and my plans to dominate as an independent developer."

For me, that quote about sums up the rest of the article. Too much arrogance in there for me.

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Trey Smith is from the "Internet marketing" world and a friend of Frank Kern's. Now, I like these guys (as far as I can learn stuff from them for free - spending $10K for a "mastermind"..? nah ;-)) but they seem to take approaches that.. rub some people up the wrong way (and that's putting it lightly). Nonetheless, I've still found there's a lot to learn from their experiences even if the delivery is a bit.. slick.

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So they're basically PUAs.

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No, they're not, although they did work with PUAs. The Verge did an editorial on them a while back. http://www.theverge.com/2012/5/10/2984893/scamworld-get-rich...

While a bit slick/sleazy in their approach their work revolves around using social psychology principles (social proof, scarcity etc), conversion tricks, clever copy, giving away freebies in order to build up their email lists. These guys eventually upsell on their premium products for a ridiculous price whilst offering their digital product for a "limited time only" to convert users who've got a good amount of value from their give-away products.

There's hardly any regulation in this industry and the FTC has come down hard on these guys on more than one occasion.

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I found that opening sentence pretty off putting too. The rest of the article seemed fairly handwavey.

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Yup, that type of "social proof" is really off putting. If he started with an actual achievement like making an app that made a lot of money I would have kept on reading. After I read this I quickly scanned it and decided it's not worth my time. I don't always agree with this, but it seems to fit - people who know do, people who don't know teach.

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Curiously, instead of "and my plans to dominate as an independent developer" it now says "and how independent developers can dominate".

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I'm not surprised, as he probably saw a flood of traffic from HN in Google Analytics and decided to backtrack.

I think we're all onto these guys and for him to think (or any other "internet marketer") they can take advantage of others through information asymmetry will be thwarted.

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An NDA for a webinar? I agree, it seemed really douchey.

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Who does this? WTF

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I dislike free-to-play games because they tend to distort the gameplay towards paying additional in-game credits. It also feels a bit like printers: you get the printer for cheap but pay a lot on inks. Here they lure people in with a well-designed free game that lives on in-app purchases (IAP).

That being said, the revenues discussed in this post are crazy.

On a side-note, I wish the App Store allowed to filter out by apps that have or not IAP. I really don't mind paying for apps and games but sometimes there will be a cool free game available. Nowadays most games are free but with many IAP. If I see a high-ranked free game I tend to turn around when I see it has IAP because I know the gameplay will be around buying more stuff.

On a second side-note, I wouldn't mind the fall of Angry Birds. IMO, the game has received a disproportionate amount of success and the merchandising all over the place has been ridiculous (e.g. a "Angry Birds" Roku box? That makes no sense). The game is ok but not very original or entertaining (again, IMO) but the milking of the brand has been the worst part of it.

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> (e.g. a "Angry Birds" Roku box? That makes no sense)

Roku sells a Wii-like game remote [1] (with motion sensors) and pushes Angry Birds as the remote's demo app. It's perfect synergy using a recognizable brand like Angry Birds to sell your own stuff!

1. http://www.roku.com/accessories

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I imagine that all it takes is for a few media outlets to pick up on the advent of IAP for Apple to address it. It's becoming somewhat of an ethical problem for them.

Maybe we'll see an equivalent of The Great Google Purge.

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It's interesting that the App Store used to explicitly ban upsells ("This feature requires MyApp Pro") in apps, since it is a customer-hostile feature, until they realized they could make a fortune with it.

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Do you also object to games with a free 'lite' version and a paid 'full' version, where the two are separate app store entries, or is it only games where you have to pay for the full version via IAP that you dislike?

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I'm not really talking about IAP for upgrades but when they're used to buy expendables (be it coins, stars, bonus items, etc.). I'm fine with the "free with in-app paid upgrade" or the 'lite' version and 'full' version (though I find the former cleaner).

However, more often than not with games, IAP is used for expendables and more often than not, the gameplay now revolves around making you buy things, rather than the game itself. You have artificial scarcity on some things, not to make the game more interesting/difficult/rewarding but to make more money for the game author.

Don't get me wrong: I'm totally for developers and studios making money, but not when it skews the gameplay.

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I hear you. It irks me to no end when IAP is used as a quarter gobbling mechanism of the twenty first century.

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People wonder where video game arcades went after the console market started to really gain traction in the early to mid 1990s (and really got rolling with the Playstation 2). Outside of Japan, they largely went away, but now they're back: on your mobile device.

We've gone right back to feeding tokens (in-game credits) because now you can distribute the equivalent of an single-game arcade cabinet -- a game that is designed to optimally take in cash at a given rate -- to every mobile device. A good analogue would be to make a beat-em up arcade cabinet that let you start out for nothing, but when you inevitably get KO'd, you have to feed it a few tokens for the privilege of continuing before the 15 second countdown elapses and you have to start from the beginning.

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Slot machines are a much better analogy imo. Mindlessly pulling/tapping and getting rewarded at steady intervals. You continue to shove in your money so you can continue to get rewards.

Arcade games on the other hand were still fun and challenging even if you took away the psychology behind stuffing in quarters. (no one has console slot machines)

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Did any arcade games do the equivalent of allowing IAP - like get a better weapon or new super move for 1 credit?

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I can think of a couple arcade examples analogous to the "in-game currency" variety of IAP. In Gauntlet, inserting coins adds to the player's health, which constantly ticks down. In Lunar Lander, inserting coins buys fuel, which is needed to maneuver.

By the time arcade games were sophisticated enough to have things like multiple weapons and super moves, developers had settled on the model where extra coins are used to buy the ability to continue a game after failing. The arcade industry is quite conservative overall.

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"Insert Coin to Continue" seems like an IAP.

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Some modern shoot-em-ups in the arcade have blatantly unfair portions of the game where you WILL get hit and lose a life. See CarnEvil for an example. I would consider these similar to IAP.

Older arcade games like Galaga and Super Mario Brothers, however, give you a fair opportunity to avoid the "Insert Coin to Continue" screen based on your skill. I can last 20-30 minutes on a single quarter easily for both of those games.

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I think that's different. In arcade's example, the only reason you needed a coin is when you have used all your lives. Now, if you had better skills, you could get through the entire game without a single additional coin.

In IAP module, the game is designed so there is no chance (at least for 99% players) to go through the game without purchasing the stuff on the go. Take "where is my water" for example. You can continue game as long as you keep scoring all 3 coins on each level. If you miss even one coin, after many levels you will be missing that coin to open another level. There you have an option to open the level for $$$ Now, some of those coins, in my gaming experience, were impossible to score, but that's a different story...

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> Now, some of those coins, in my gaming experience, were impossible to score

If you had better skills, you could get through the entire game without buying a single additional coin! ;)

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Off Road Racing or whatever allowed inserting more coins to buy parts upgrades if you weren't good enough to get buy with the in game cash rewards.

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They didn't, but the idea behind arcade cabinets is that without continuing to feed in money you got an incomplete experience.

The issues you're bringing up -- and is valid -- is a fair number of free to play games may instead give you a sub-par experience (unless you pay money, you have to wait) unless you feed in money.

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The only thing I ever remember was the ability to get additnal lives/plays by inserting more coins.

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Double Dragon 3 allowed you to buy new characters and special moves/weaponry

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Funny thing I've found myself doing recently, when I'm hooked in to one of these horrible, grindy, submarine IAP games which I should know better than to keep loading up but hey I'm only human. Since my iPad is jailbroken I just SSH in, find the game directory and more often than not find my stats sitting there in a simple .plist file (maybe a binary plist, but then you just use the appropriate editor), make myself an in-game millionaire, load it back up and enjoy the game at max power for a few minutes before turning it off and never thinking about it again, a 'weight' lifted off my shoulders. It shocks me, how when the grind is suddenly removed, my interest in such a game that minutes before I had been feverishly, morosely addicted to, /completely evaporates/.

It's funny how me doing this is quite comparable to piracy, but - rightly or wrongly - I feel almost no guilt about doing this because by the time I've got to this point I've lost all respect for the game anyway.

It's ironic how Apple's locking down of the device is enough for most developers not to bother obfuscating their game save files so that if you have taken the trouble just for that jailbreak step, you're unlikely to meet much further resistance.

And finally when I do run into a game which has apparently taken cursory defensive steps such that my crude hackery only succeeds in stuffing everything up and losing whatever progress I did have, this too turns out to be funny. As I have no impulse to start playing from the beginning again, I breathe that very same sigh of relief, and forget all about it. Win-win.

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There are forum posts and youtube videos for how to cheat in most IAP games.

Developers are learning to fight against it, but it funny how much effort goes into making sure some bits dont get flipped.

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Personally I get put off a bit by free to play. I expect to have the game pushing ads at me non stop or trying to get me to purchase things in game. Where as I associate a quality paid game to be clean and just giving me the game without all those other distractions.

Granted I am sure there are some decent free to pay titles, just the mental impression I get before trying new games, based on past experience.

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True... YOU expect the game to push ads at you or try to sell you things, because this is your domain. You look at it from a totally technical point of view, you have plenty of experience dealing with this sort of thing. Mr Smith the average app user on the other hand doesn't have this expectation, and if a little box pops up telling him he can upgrade his sword twice as quickly for just 99 cents, he just might do it..

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That scares the pants off me. I really fear games moving in this direction.

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If you think about it, though, most things are already sold this way. The people who are less engaged are subsidized by those who are more engaged. Mobile phones and broadband internet are good examples.

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Is it really the case for broadband? I pay as much as the guy frantically torrenting day and night but right now I'm just commenting on a text-only website.

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I agree. I don't want to buy a bag full of coins to defeat a monster. I want to play the game in full from the outset.

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You are a veteran video gamer. This is a different model of play from what you are used to.

Many of the people playing these new style games haven't played many video games before.

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I've been building out free-to-play games that are purely ad-supported, with unobtrusive banners only, no interstitials. It's not as profitable as IAP or in-your-face ad-based games, but it seems to appeal to my target market.

The problem is that to remain competitive, I'm feeling pushed to build an IAP game :-\

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Do you have IAP just to remove the banners?

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What's even worse are the paid games that also have "Buy 10000 coins" in IAP.

At this point I have enough games to play and any games that have IAP consisting of energy/coins/diamonds/whatever I immediately avoid, even if it's a well-liked game. I don't have time for that sort of thing.

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Free to play might ruin games.

Games are supposed to be fun. In a free-to-play game, the game designer's goal shifts from fun to incremental revenue collection. I think it's an abusive dynamic between the game designer and the player. If free-to-play becomes the norm, we might wonder why games are not as fun anymore, without being able to put a finger on it.

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Hmmm, I'm not entirely sure, though I also don't like the model. I have fond memories of stuffing quarters into arcade games, a "pay to play" model that's even more direct in it's incremental revenue collection. Yet that payment model did not lead to bad gameplay, even though it did limit the types of games that were created at the time.

Possibly free-to-play is different, certainly it doesn't have the same requirement of keeping the gameplay fast-paced, so it's possible to make a boring one. But there are plenty of boring flat rate games as well. I wonder what people growing up on this game model will think about it?

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I agree. While all of these pseudo-gambling games have been common place on PCs and the web for going on a decade (maybe more?), it's sad to see it start leaking into traditional game spaces as well.

iOS is basically brand new, so maybe it was inevitable for these types of games to take over. I'm interested to see what happens in the next console generation - it might be a sad state of affairs beyond big-budget AAA titles.

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It's truly unfortunate. If the money is really in F2P (and I think it is), I would hate to see "core" developers like Epic/Valve/ID integrate those features into their games because it makes business sense.

Yes, TF2 is F2P, but I think they've done it in a fairly tasteful manner. The MvM stuff with tickets is skirting the edges a little bit, but time will tell how it all turns out.

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I like that MvM costs money. It's a simple way to ensure you are getting paired up with people who are dedicated to finishing the match.

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I agree that it has the potential, but I think that this is unlikely. The approach to generating the incremental revenue can be done in at least two ways: claiming expected value and creating additional value. To use two free-to-play games as an example, consider League of Legends (LOL) and Dota 2. LOL requires one to use either purchased currency or earned currency to unlock characters. Dota 2 immediately makes all characters available to play. Therefore, a Dota 2 player would expect to have that value, yet it must be purchased through time or money in LOL. Both games, however, create value through the selling cosmetic enhancements to heroes.

If you think about it, the demo model seems like a special case of the free-to-play model: a small amount of content is free to play and the rest of the content can only be accessed through a purchase.

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It may be that many more children or teens are iPhone or iPad owners who can only install free warez - their Torrance for ads is high I imagine.

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Forget about whether IAPs are bad. Did nobody pick up on this?

> In the last month, this single game generated over $12,000,000 on iOS alone. They have not ported the game to Android yet.

> If this is the case and it holds ranking for the rest of the year, then this single game is worth $109,500,000 PER YEAR on the low side.

Holy fucking shit. $100m a year of high-margin sales for a single iOS games?

World of Warcraft makes, last time I calculated it, roundabout these amounts, and WoW is one of the most financially successful games ever and requires masses of investment in infrastructure, new content, community management, developers, and so on - so big it swallowed Blizzard whole for a while.

If a silly, simple, stupid looking iOS game can make $100m a year of almost raw profit, this is... well, just mind-blowing, really.

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$100m a year is clearly crazy money, but it's not quite at the scale of WoW yet.

World of Warcraft subscribers have been declining steadily for the last couple years [1], but they still have ~9.1 million subscribers.

The least a subscriber can pay is by buying in 6-month increments, which is 12.99 a month [2].

So, even though they're making less money than ever, 9.1 million subscribers at 12.99 per month is 1.4 Billion a year.

[1] http://www.ign.com/articles/2012/08/02/world-of-warcraft-los... [2] http://us.battle.net/support/en/article/payment-option-credi...

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9,100,000 * 12.99 == 118,209,000

So, unless my math's off, I think that's pretty close.

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Is it just me or did the game market become much more sinister than it used to be? It's all about getting people effectively addicted to make more money out of them. Give them a taste for free, once they're hooked, start cashing in on those poor addicts.

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It does seem sad. So many problems to be solved in the world, but the things getting financial reinforcement and attracting technical talent are compulsive gaming and nanosecond-level stock trades that are unrelated to productive work. Good thing Farmville wasn't around in the 1960s, we'd have never gotten to the moon.

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Calling the game market "sinister" borders on hyperbole.

Horia Dragomir and Stephanie Kaiser from Wooga gave a presentation[0] on metrics driven game development at GOTO Copenhagen earlier this year. Through the lens of one of their more popular franchises "Monster World", they discussed, among other things, A/B testing and the surprisingly short life (days to weeks) of a game feature before it becomes irrelevant. Nothing in their talk suggested late night meetings in dark corners, plotting to turn their users into addicts. Rather, they discussed adapting to rapidly changing trends and patterns--which sometimes but not always included introducing new in-game purchase items.

If on the surface the game industry as a whole appears to you to be an online equivalent of a casino, thats fine. What I see are dedicated and passionate engineers trying to ensure the survival a product in which they've dedicated years of their lives to getting right, by employing many of the same techniques nearly every other user facing tech company uses everyday, and I for one am not ready to cast the first stone and accuse entire industries of moral bankruptcy.

[0] http://gotocon.com/cph-2012/presentation/The%20Metrics%20Des...

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There are surely very dedicated people working in some casinos. That doesn't have anything to do with them doing interesting stuff.

And the fact that they use "what every other user facing tech company uses" is exactly the problem. I like and use A/B testing, but it's purpose as a tool is to take decisions based on what extracts the more money from users. There's no dark corner, but the goal is definitely the same. And it's not exactly something that I want to associate with games.

The fact that your whole post, and a big part of the link you give, is as much applicable to selling games as to selling rocking chairs or any random saas product is exactly the problem. Marketing and sales come first, game development is merely an afterthought.

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It's not that it's more sinister, it's just that the spectrum of people who play is just so wide now. I assume the "sinister" side form your affirmation would correspond to the casual section of gaming.

Back in the early days, only "hardcore" players would really pay attention to video games, but now, with so many casual games coming out, everybody is busy click or tapping away at least for five minutes each day. While there are heavy monetization wheels turning in the casual world, it's still about getting people to relax.

Let me explain a small difference, bare with me.

Just think about what user penalties for mistakes are in casual games. Also, think about how many time a casual game has made anyone feel that a mistake is their fault.

Now think about hardcore games: it's always your fault.

This means that to be better at a hardcore game you need to train. There is no magic button to press to become a pro gamer over night. With casual games, the only way to get "better" is to cheat luck of make time go faster. And there are buttons for that. Very few people press those buttons because very few people are looking to do or get better at those games.

These buttons are clearly offensive to a person who is a hardcore gamer at heart. I know that, I see them everywhere.

I guess your affirmation comes as a result of the growth of casual / social games while the pace at which hardcore games are being released has stayed pretty steady over the years.

And the "give them a taste for free" bit makes me think of trial periods for non-gaming software.

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That's a very good point. I haven't considered the casual-gamers aspect and the different style of engagement with games.

I still somehow have a little trouble with the way this in-game purchase works. As a child I used to go to play at the arcades, and of course when you fail, you have to slot another coin into the machine. This is probably quite similar. However, even as a child, I knew I am going to spend some money, within my budget, on playing games. There were no free games.

It seems like a subtle difference, but there is an element of luring-in with something that is marked as free, but actually encourages you to pay later.

Also, the coin-operated arcade (due to technical reasons I guess) offered a reasonably predictable price model. You play until you fail, which is usually a few minutes. If you're really good, a bit longer. You weren't given a chance to buy extra ammo or turbo-charge your car if you add two coins, and then later get the mega-pack for five extra coins and so on...

UPDATE: just to make it clear. I'm really speaking as a complete outsider to this world. I don't play any kind of games, and apologies if I'm making very wrong assumptions based on little knowledge in this area.

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It's pretty much always been this way since the Internet became ubiquitous. UO/EverQuest/DAoC/WoW/etc. started with subscription fees and a steady stream of expansions; followed by "DLC" on the latest round of consoles, and thanks to the iPad and Facebook; it's just more mass-market.

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It's not just you. I've very glad I got the hack/slash/upgrade/repeat cycle out of my system with Diablo II many years ago, before publishers figured out how to rent Skinner boxes.

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The entire gaming paradigm with pay $X to get better equipment so that you can use that to get even better equipment sounds like a giant Skinner's box.

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The original game model for PC was freeware first hubs and pay for full games, like Doom and Quake. This is only a more predatory evolution of that concept.

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>Phase 1 of app store monetization was Premium games (.99 titles)

I have no doubt this is how it works, but I never thought I would see the day when something that costs a dollar is considered premium.

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I came here to post this same thing… Except for a couple of holdouts like Square Enix, the notion of paying more for something non-consumable vs. consumable seems to be at an end in the software space.

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I wonder if there's any economic theory on circumventing or avoiding a pricewise race to the bottom that would be relevant here.

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Trey bases his assessment on Apple's published "Top grossing" list. This is potentially problematic as it's not clear over what time period this is based or what other metrics Apple uses to put apps into this list. Apple, like the publishers would like to encourage people to spend more over time than just download free apps so they're incentivized to encourage the implication that in-app is the way to go.

Perhaps Angry Birds is dropping on the pay charts because people are finally bored of the franchise? How many years and different ways will people pay to shoot slightly different pigs with birds?

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I suspect at this point, everyone who currently owns an iOS device and wants Angry Birds has it. Their sales are mostly to new iOS device owners while new games can sell to everyone.

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Angry Bird as a brand grew also outside the App Store. As long as you don't factor in the money made with licenses on cups, toys...; this analysis based only on App Store revenue just falls short.

Simply put, you don't need to make money in the AppStore (and hand over the a huge amount of that to Apple) when you can monetize outside of it.

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Yes, the reason why Angry Bird is not in the top grossing app is because they already dominate the market. This metric is based on the number of new install on the last week or so. The fact that they are still #2 of paid app (also a metric on the last month or so) means that they monetize pretty well with in app purchase already.

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I don't dispute the OP's argument. It just makes me sad.

One of the things I really used my iPad for a lot is games. The distribution mechanism and purchasing system are super-simple. You could (and can) get high-quality games for a low price. I see I've spent 100+ hours playing Bejeweled 3 alone.

Yet the trend has clearly gone towards in-app purchases. I tried some golf game (Tiger Woods something?) and it was constant nagging for in-app purchases. That got deleted in about 2 minutes.

Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most. And I've tried a bunch (spending no real $$$) to see (I'm a sucker for world-building games and there's a dearth of those, sadly).

The second category (normal games with in-app purchases) create the wrong incentives. Whereas Angry Birds originally spread because it was a hugely fun game, the game developer is incentivized to make you fork over more money, typically at the expense of the game itself.

It saddens me that Angry Birds has gone the in-app purchase route too.

Sadly the genie is out of the bottle. Any sensible game developer will go this route. Add to this the "social" layer being foisted on users and it's really looking like dark days ahead for gaming.

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And this is exactly why I'm predicting a crash in the mobile games market. People are going to figure out sooner or later that they're being exploited and not actually having much fun and the whole house of cards is going to come tumbling down. It's actually worse than that because games make up the bulk of the app stores' revenue.

Zynga was just the bellwether here.

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> people are going to figure out sooner or later that they're being exploited and not actually having much fun

The same could be said for Casino's, if the visitors looked at it rationally. But humans often don't make decisions rationally. Especially when it comes to entertainment and escape from reality.

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I think mobile/social games are going to get much bigger for just this reason. Casino's have been playing the human psychology game of trading ring-ding-ding and related human excitement for centuries with astonishing success. Even though they've been seen as a menace to humanity, they've nonetheless been able to been able to use every trick in the book to expand their physical presence and market impact.

However, there are huge limitations to casinos: they are limited by regulation; they are limited to physical infrastructure; they have limited space that the customer has to come to.

Quite obviously, none of this exists for the online world. This is the incredible success story of Zynga. They've managed to build a giant online casino and call it a game, and get the execs of Google and Facebook licking their heels.

This is a market sector that will not simply expand. It will explode.

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Disagree. The addiction and draw of a casino is MONEY. Not "ding ding ding". Pay to play games eventually offer dismissing reward. Every time you step into a casino you could win big. There is no incentive for these types of mobile games. "one more roll" simply doesn't apply long term.

I agree there will be a correction in mobile gaming. At least I hope to see these vapid "games" get kicked in the nuts a little.

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I'm not sure that I want to share more complete thoughts on this subject, as it could easily be used to develop the next generation of money-sucking social games, but here's a partial response.

Casinos offer a variety of different games, which have different appeal to different types of their clientele. There are lottery type games, in which there is a faint hope of a extraordinary windfall, which appeal to people who want money without working for it (i.e. people in debt). There are games in which there is a large degree of control and which the winner emerges because of his/her psychological prowess which appeals to the serious gamer (i.e. professional poker players). And then there are the run of the mill ring-ding-ding games, which appeal both to the idea of winning money, the suspense of the spinning wheel, and various other attention keeping mechanisms.

Social games have the ability to emulate virtually all of these. Although ostensibly buy-in is limited to virtual money that can never be removed from the game, there is nothing stopping large markets to grow around virtual items that can be traded (as happened with Ultima, EQ, SL, Eve, etc.).

The clutch here is that the "fun" of the experience in both cases largely revolves around ideas of advancement, social enhancement of the idea of advancement, and (potentially) some real world tie-in.

Actually, in many respects the social game is far more advanced than the casino already, insofar as it offers the idea of advancement which is potentially not tied to money (i.e. leveling up), but which can also be tied to money if people want it to be.

The problem of this right now is the fact that virtual currency cannot be liberated, but as soon as that problem is solved the casino will be an obsolete institution, soon to be extinct.

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You've brought pachinko to mind: "Directly gambling on pachinko is illegal in Japan. Balls won cannot be exchanged directly for money in the parlor. The balls are exchanged for tokens or prizes, which are then taken outside and exchanged for cash at a place nominally separate from the parlor." (quote from Wikipedia)

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If rewards could then be converted into real world prizes or money, even if the games are based on "skill" (read: poker), wouldn't these new games be subject to the same regulation as on-line casinos?

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Ostensibly, but just how well are governments doing at regulating online casinos? Ok, add in easily accessible VPNs and stable currencies not tied to a regulatory body. The question is not can and will governments make these other currencies illegal, but can governments enforce any laws that they make?

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Yes! Mobile game companies are essentially casinos (and receive most of their revenue from whales).

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Casinos are wildly different in that is usually a 'genuinely' social activity (most people go with friends), there is the potential to win 'real' money (however slight) and even if you don't win (or lose big) you come away from it feeling as though you had fun - Also, there's free booze.

I agree with the sentiment, which is why I only play in the poker rooms, where the odds are effectively neutralized and you just worry about the rake (which goes away in tournaments, minus 'fees'). But even though I don't like the odds of playing the table games, I will occasionally set aside a small amount to play craps with because it's fun.

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> most people go with friends > you come away from it feeling as though you had fun

As the other commenter pointed out these games aren't making money from the average person. It's making money from the "whales".

A close friend of mine is a compulsive-gambler, trust me they aren't there for the booze or the social experience.

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Slot machines are where the money is, look at the floor area they give them.

Whales are just the bonus on top and the tables give the sense of glamour/sophistication.

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I read it as "People are going to figure out sooner or later that strippers exploit them and not actually going all the way with them and the whole strip bar is going to go down. "

I actually think social games are here to stay, just like old card games.

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F2P is probably a bubble waiting to burst, a short term trend, but I don't think high-quality mobile games have too much to worry about.

There'll always be a market for great games at a fair price.

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Has that happened to EQ, WoW, or other MMOs? They have same model of addition / exploitation.

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This is the reason some studios are now betting on the Vita has they hope that there they are safe from this trend.

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No, I would rather say as app games market evolve, the developers are moving to where the money is being made: on inapp purchases. Now, while most app games users will not like this idea and do not like in app purchases-based games, to the developers the 1 or 10 or whatever % of those who make purchases counts the most, and those are the ones who they will target their products to.

I wouldnt say it will crash the mobile games market; I would rather say the ratio of all the games designed in ".99 cents" a pop scheme will be on rapid decline...

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And you don't think game developers targeting the 10% of the players who, frankly, have a problem, while the other 90% are left with nothing at all, describes exactly a collapse of the mobile gaming market? It's not as though games need to stop being made or that everyone has to lose money for that to happen. Look at this article and it's plain: it's nothing but talk about how developers are going to monetize next - nothing, not a single sentence, about how to improve the state of the art.

The biggest challenge for mobile game developers is that the platform just really isn't all the great for making good, fun games that people will want to actually pay for. And all the brainpower is going into monetization strategies rather than innovating on that platform. Like games on Facebook, mobile is good for making games that separate from their money people with addictive or compulsive personalities. Little else.

I fucking love video games. Console and PC. My Steam account is worth many thousands of dollars by now. I haven't paid for a game on mobile in over a year (and I haven't been downloading any of this free garbage to make up for it, either), and I don't miss it. I read on the train instead. I don't think I'm atypical.

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Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most.

A game that markets itself through a social network is not intrinsically social. It's just parasitic. Zynga is Facebook's tapeworm. Games, for over 5000 years, have been a lot more social than Fartville. This Zynga shit is alienating. It's about as "social" as playing the lottery is intellectual because it involves numbers.

I was at Google during the Real Games battle, and inadvertently became somewhat of a lightning rod for it. I'll skip over the whole history but just say this: if decisions had been made on merit rather than rank, Google+ Games could have been something, and if it had, Google+ would have become an actual contender in the social space. I saw first-hand the damage that Zyngaism can do to a potentially major product.

I think all of this Zyngarbage is an attempt to emulate the success of Magic: the Gathering and its iterative pay-to-keep-current mechanism, but without the insight and work that made Magic (in spite of its annoying pricing model) great.

There will be a flight-to-quality in the gaming space (Zyngarbage will always exist, just as third-rate porn always will, but it will become a low-margin commodity) but I have no idea when it will be and what it will do to the current cottage industry.

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You have interesting things to say, I'd like to hear more about the Google+ story for example, but your delivery (because you're so angry) makes it nigh unreadable.

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"Makes it unreadable, to you"

It seems like a common handicap amongst otherwise smart and capable people, to possess the inability to ignore tone, style grammar etc, and just judge the message on the strength of it's argument alone.

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Otherwise smart and capable people are often handicapped by an inability to ignore tone, style, grammar, etc. and judge the argument alone.

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You need to accept the fact that people will evaluate posts based not only on what they say, but on how they say it as well.

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No one needs to accept anything, I'd much rather listen to a badly worded, foul mouthed tirade that rang true, than eloquent diction, suffering from serious flaws in logic.

And yes you can have both, but that is not relevant to the argument. The interesting part is that x, (being well spoken), is not a necessary and sufficient condition for y(having a solid argument), yet many behave as if that is the case.

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> No one needs to accept anything ...

Suit yourself. But time is well-spent learning to craft readable sentences.

> The interesting part is that x, (being well spoken), is not a necessary and sufficient condition for y(having a solid argument)

It's necessary but not sufficient. Having literary skill won't save a bad argument, but lacking literary skill will surely undermine a good one.

Grammatical ability is a sign of respect for the reader/listener. Without that sign of respect, one is placed at a crippling disadvantage in advance of presenting the argument.

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It's not necessary nor sufficient. The logic of argument, does not rely on the emotions of a listener.

Eg. Claim1: The motherfucking sun is deff larger than da moonz!

Without getting into petty semantic deconstruction, the essence of the statement is true, regardless of the respect (or lack thereof) for the listener. You seem to be confusing logic, with persuasion and communication.

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> The logic of argument, does not rely on the emotions of a listener.

No, only the outcome -- effective communication.

> You seem to be confusing logic, with persuasion and communication.

You seem to be confused about the purpose of writing -- which is effective communication. Without an awareness of the recipient, writing becomes onanism.

BTW apropos the topic, both your sentences above contain an unnecessary comma.

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Ok

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Wow, can you two get over yourselves please. This is so awkward, pedantic and embarrassing.

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"its"

I consider it a strength to notice both and critique each accordingly. Otherwise you guarantee that you will inadvertently irritate either the big-picture people or the detail lovers (as you have just, ironically, seen demonstrated).

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Ironic?

Err No, it is in fact rather apt. As of now, there are two replies to my comment, both nitpicking on the grammar, instead of DH6.

http://www.paulgraham.com/disagree.html

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A very very interesting point to think about... I don't see this original post as having a difficult tone or serious grammar issues. Would be interested to hear more of your thoughts about this issue...

I tend to feel that when someone gets angry and start calling names, it signals that either the person hasn't really thought things out or the person has difficulty seeing other points of view. There are multiple perspectives on many engineering topics.

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That's funny. For me it had the opposite effect. Obviously he has a conscience, for anyone with an intellect who is not the least bit offended by Zynga-ism is, arguably, lacking in that capacity, i.e., in need of a real conscience.

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I'm a huge fan of Church's writing in general but I too find the namecalling to be an unfortunate distraction.

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Something you and the parent are missing: the Zynga-style "social" games are overwhelmingly (80%+) played by a completely different target group than 99% of all computer games before them: adult women.

They are most definitely not going to disappear unless there is competition that appeals to that target group more, and the (admittedly short) experience says it's not going to be something with a big element of skill.

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> Any sensible game developer will go this route. Add to this the "social" layer being foisted on users and it's really looking like dark days ahead for gaming.

Was this not the same with arcade games padding difficulty and length to force players into shelling out quarters? I find the "IAP and F2P will RUIN GAMING!!" arguments to be mostly based in fear and not common sense. It's true the majority of people aren't engrossed in gaming culture, so they are more likely to fall for F2P tactics, but that doesn't mean every single developer is going to leave the "quality" gaming market to wither and die.

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But arcade games did dominate game design for about 15 years. It wasnt until the late 90's that console developers realized that they didnt have to design games the way they had been doing since 1980. Just look at Super Mario Brothers, it is designed as an arcade game: lives, timer, padded number of levels.

On a side note: I would take arcade games over social games any day. Arcade games were made to be hard in order to gobble up quarters. Anyone born in the early 80s remembers games as being really, really challenging. Social games are being made to be mindless and addictive.

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I hope that Apple will realise that these games are hurting its brand and products and will kick them out of the App Store just like they did with fart apps. I don’t see what kind of business advantage allowing these games gives them.

It’s their “walled garden” and it’s their responsibility to take care of it when it’s overran by weed.

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But it's a small minority that don't like them. They successful because they're popular. If Apple removes them, people will freak out! And maybe even buy an Android device.

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My theory is that they aren’t successful because they’re popular, they’re successful because the business model is lucrative. If what they say is true and the bulk of their revenue comes from a small portion of their “customers”, they need to be a lot less popular to be successful (both in terms of downloads and revenue) than traditional, payed games.

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I think they might segregate the to expose others better but they aren't about to ditch their biggest earners (or piss off their customers who love these so much they keep spending money on them).

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Why would they, when these apps make buckets of money and Apple gets a nice chunk of that at no cost to them?

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At the end of the day, Apple makes money by selling iPhones and iPads. App Store revenues are rounding error. The App Store has one function for Apple: to help selling more iPhones and iPads. (In Q3 2012, iPhone and iPad sales constituted 72% of Apple’s revenue, while the iTunes Store, which includes the App Store, but also music, movies and TV shows, was only 6%.)

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The proportion of net profits would be more interesting to know - I imagine the margin is quite a bit higher on iTunes Store revenues.

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Sooner or later, parents are going to start making a lot of noise about the waste of their childrens' lives, and the media are going to start campaigning for the government to Do Something (tm). Legislation is a terribly blunt instrument. Apple might find it very much worth their while to take action before governments take it for them.

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The noise that parents make is not going to be the waste of their children's lives. It is going to be over the fact that these companies are preying on children.

There have been a number of cases of kids discovering that they can make in game purchases really easily, doing so a lot, and by the time the parents find out thousands of dollars have been spent.

See http://abcnews.go.com/blogs/technology/2012/04/parents-sue-a... for one lawsuit based on this. Admittedly it was over a bug where kids could spend thousands of dollars on a "free" app without needing the password. But kids learn parents' passwords all of the time. How long until there is a lawsuit over the problem of kids who got the necessary password running up huge bills?

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I consider myself sensible, but I would never use IAP, except under one condition: the old "shareware" method. That is, distribute a demo for free, charge for the full game. Even this model has been abused though with certain expansion packs (cough cough Mass Effect).

The second you start treating your customers like cash cows, the faster history will forget your game. Make games that are fun to play, charge enough to support yourself and expand your company. You do not need to rely on parasitic behavior to accomplish this. The possible end benefit is that you build more loyal customers. After having played my first game with IAP, I will never buy another.

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I loved shareware games back in the day. Being able to play a substantial portion of the game for the price of a stamp and a floppy disk pretty much guaranteed you would want to get the whole thing if the game didn't suck.

I did pirate a few games back then but the majority of the games I bought at full price were shareware.

I don't understand why this business model doesn't seem to exist any more. Just throw a demo of your game onto a torrent website and make grabbing the full game as easy as possible.

Even on Steam there are hardly any playable demos.

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If you're on a torrent site, why would you download the demo instead of the full game? Even if you were planning on paying for the game if it didn't suck, there's no advantage to neither you or the developer in downloading the demo instead.

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Some of us still don't enjoy downloading 5 gigabytes just to try a game. Granted, this makes crafting the demo a little harder than putting in an unlock code.

As for torrent sites - demos could easily be distributed separately from full games. Companies could even have private trackers, though they might want a custom installer for that.

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You could (and can) get high-quality games for a low price

It seems to me that if people were willing to spend more money on quality titles this trend wouldn't exist.

High quality AND low price? Seems unsustainable to me.

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Completely agreed. My hope is that either the whole thing collapses with a "what the heck were we thinking" like the $3 ringtone idiocy from several years ago, or at least that there's enough customers like us so that lack of IAP becomes a viable selling point.

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""" Then there are the "social games", which to me is really an abuse of the word "game", since they are nothing more (IMHO) than exercises in feeding addiction and inducing compulsive behaviour. There is no element of skill. It's simply who can purchase the most. """

I think you can see that some game especially on mobile are starting to be more social and more skill based, even if the gameplay is asynchronous. I'm thinking about games like Words with Friends or SongPop. Draw Something is also really social but it's cooperative, not competitive.

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I don't have an issue with in-app put purchases, it's like the old try-before-you-buy model. I have have spent 100s of hours playing "robot wants kitty" (with in-app purchase called kitty connect to get user levels) and "Solomon's keep" with its addons. Both apps are free (and brilliant), with optinal paid add-ons that make the game even better. If it weren't for these two games (with addons), I most probably would have traded my iPhone in.

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@cletus - Couldn't agree more with what you said

The in-app purchase is one of the worst elements of mobile gaming of all-time. The social games are complete shit and why Zynga is about to be de-listed from the market.

It's a shame there's so much emphasis on QUANTITY over QUALITY these days with both consumers and developers.

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I came to say the exact same thing. I hate almost any form of in-game currency, and the "rise of IAP" coincides with me stopping downloading games at all (I think the last was Death Rally).

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I hate, hate, hate games that use in-app purchases as a significant part of game play (and removing grinding qualifies, imo), to the point that I look to see what the top in-app purchase are and won't download games which let you buy in-game currency.

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I really don't like free to play games, as they're implemented now. The current strategy is simply "pay to progress" rather than to unlock more functionality. I was playing this game called Tiny Tower, and in it, you could pay to finish building a room. If you paid for the room, you ... had another room. You could then pay for another room. The dynamic of the game didn't change, things just moved along.

Even without this, because so few people pay anything, the dynamic of the in app purchases is skewed so that you have to spend a ton of money to get anything out of your purchases (people willing to pay are willing to pay a lot, apparently). So people like me, willing to spend $5-$10 on a fun phone game but not $50, are sort of left behind.

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Re: "The fall of Angry Birds", this article should be titled "The fall of paid games, the rise of IAPs".

Angry Birds, as a franchise, is doing anything but falling. Just look around the next time you go to a Walmart or Target. Angry Birds lunch boxes. Angry Birds Halloween costumes. And yes, Angry Birds Cheese Nips[1], which my kids are consuming even as we speak.

And it's only inevitable that Rovio is or will be working on an Angry Birds game that takes advantage of IAPs over an up front charge.

[1]http://www.walmart.com/ip/Nabisco-Cheese-Nips-Angry-Birds-Ch...

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Or perhaps just "the fall of transparent gaming costs". Apparently the games are still paid, just pay-as-you-go without any clear/simple way to determine how much the game will cost to complete?!

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Exactly, and we pretty much have ourselves to blame. We prefer to get ripped off via "free" or low upfront costs, or "sales" taken off ridiculously inflated prices. Honest pricing is generally not rewarded; look at the Nexus One, or JC Penny's attempts at transparency.

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But the current article title is so much more intriguing dna references a well-known brand. I would love to see an A/B test comparing the two, however.

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There are some interesting insights in here, but I think it's a bit like talking about the "fall" of Harry Potter or the "fall" of Star Wars. People get bored of particular entertainment franchises and icons and move on to the next thing. While there's undoubtedly more to milk from Angry Birds (especially if iOS devices get new innovations they can lean on), they'd better be working on new franchises that could be even bigger.

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I have a feeling that everything he's saying is true, and it makes me very sad.

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I wonder if the whole reason IAP is winning...

is because trial periods aren't being done? Wouldn't it be a lot simpler to make Angry Birds free, have only the first 20 levels be playable, then pay $9.99 for the remaining 80 levels? (I'm making these numbers up BTW.)

Obviously IAP makes a lot of sense for Farmville-style games that are all about "objects", but when tacked onto Angry Birds Space, or most games really, it feels like the company is just trying to take advantage of you.

Why don't we see any "free trials" like this in the App Store? Is it against Apple TOS or something? Or have studies shown it just doesn't work? (And I don't mean the free "lite" versions of games -- those are annoying because you lose all your progress and have to start the full version from zero.)

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IAP wins because the developer can capture more of the area under the curve for what people are willing to spend to the play the game.

With traditional games, you either pay the $10 or you dont. Once you have bought the game, you are done. Maybe you can buy an expanion pack later, or a tshirt, but the developer literally is out of ways for you to spend money.

With IAP, players can pay as little or as much as they want.

The danger is that the game can become less fun if you are always being prompted to spend more money. But I think there are games that do it well. I have spend over $100 playing Valve's TF2, a game that is free-to-play, and I don't regret it.

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$12,000,000 a month? Holy shit. I had no idea the ceiling was that high. I made a free to play Android game that took me 6 weeks and made about $10 total... I guess I need to give this another shot.

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They probably spend $4mil/month on advertising to drive new players to the game. That's how this all works.

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There really should be a Game Store separate from the App Store. Currently, if you're not looking for a game, pages like "Top Grossing Apps" are completely useless in the App Store.

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Just as a point of reference: the top 15 grossing apps in Japan at the moment are free to play but with in app purchase battle/card social games. I also work making them.

1-5 http://i.imgur.com/cuzGb.png 6-10 http://i.imgur.com/ckpIC.png 11-15 http://i.imgur.com/jzFWa.png

#16 is Line.

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Saw a friend of mine the other say, he had a angry birds teeshirt on. He has never played it ever in his life nor even knew it was a game, just liked the teeshirt. I showed him the game, involving the killing of birds and pigs and he was not phased in any way but still likes his teeshirt.

Apart from that any old death of Tetris type article were you change the title to angry birds will be relevant in such matters of simple fun games and there lifespan.

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If you account for merchandising, I wonder if Angry Birds is beating the top free to play app?

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I'm sure it is, there's so much Angry Bird stuff around now

Just today:

Passed by a Samsung Promotion, play angry bird games on SmartTV, win Angry Bird merchandise

The cable car in Singapore has "Angry Bird" promotion cars with Angry Bird Decorations; has whole shop dedicated to Angry Birds Merchandise

Local supermarket, spend $$$, collect stickers, redeem Angry Birds

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More than likely and does somewhat indicate a new mentality eventualy towards some games which are used in effect as marketing material to help promote and sell the mechandising aspects.

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I'm curious why people seemed to love and/or idolize Team Fortress 2 going free to play, but there seems to be a negative vibe surrounding it for mobile gaming...

One of many mentions on their 12x revenue increase from F2P: http://games.slashdot.org/story/12/03/08/2148224/valve-switc...

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I think it's because in TF2 you get a super fun, deep game that you can play for years and have a ton of fun and not pay a penny. You only pay for "extras".

In FarmVille, when you use up your virtual money you can't play anymore. You can't plant anything, you can't harvest anything, you can't plow anything. You just have to wait a few hours until your plants grow.

So your choice is make an IAP or literally watch grass grow.

And even of you could grind through that and keep playing (say by mining gol laboriously)... TF2 is just a more complex, more interesting game. FarmVille and the like seem to exist only to get you to spend money compulsively.

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Because TF2 has made a very specific effort to avoid "pay-to-win" gaming. Most of the expensive items in TF2 are largely cosmetic; all of the seriously game-changing items can be crafted, found, or obtained through unlocks.

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Plus, TF2's stock weapons are generally the most versatile, so there are few if any game-changing items.

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The problem with FTP games is they miss a huge segment of the market. I have spent thousands on games, but less than 20$ on free to play games because I dislike the gameplay compromises needed to support FTP. That said, the app store funnels things towards FTP games but a subscription based game-play is probably a better long term money maker.

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A subscription game only works if you're WoW. Virtually every other big name MMO since that has ended up free to play.

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MMO's transition to FTP but just because Everquest decided after 15 years including several that crossed the 50 million dollars in of subscription revenue mark and 18 paid expansions that the best way to milk the remaining value was FTP does not mean it's best to start there.

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EVE is still subscription based

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although their ISK<->subscription time market seems like a nice compromise- if you can grind, you can play for free. If you want to skip some grind, you can pay to get ahead. And no one feels like they're being fucked with by amoral Wharton grads.

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Free to Play is certainly popular now, but I'd be shocked if it were still popular in a year. It is exactly the sort of model that IME works while it is semi-novel but creates a model fatigue in customers that results in eventual backlash of even those who accept it at first. So, he's right, but F2P model will also eventually "fall".

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> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like.

Data? Citation? I'm genuinely curious. Is this now the common wisdom for indy games?

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>> A very small percentage of people buy stuff in games. Of this small percentage you have people who will spend a LOT. These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like.

I would love to analyze the in-game purchase data across multiple free-to-play games on multiple platforms (e.g. facebook, app store, etc) in order to see the distribution of user spending habits. While I'm sure there are power users who spend magnitudes more than the average, I'm skeptical that they're the main driver of revenue. What I'd like to see is the average % of users who make in-game purchases, the average in-game purchase over time, frequency of purchases and what % of total revenue the average represents.

Unfortunately, I don't think Zynga et al will be releasing this data publicly anytime soon.

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I'm skeptical that they're the main driver of revenue.

Your skepticism is founded on a prediction about a measurable feature of material reality, right? Your prediction is catastrophically inaccurate.

http://casualconnect.org/lectures/games-for-gamers/virtual-g... (Particularly slides 16, 17.)

http://gigaom.com/2011/07/25/game-devs-looking-for-revenues-...

http://www.quora.com/Social-Gaming-Startups-and-Companies/Wh...

Feel free to take anyone in the industry out to coffee if you want confirmation.

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Thank you for the links, but in the future don't put words in my mouth and then use them as a basis to insult me.

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My inclination when people feel insulted is generally to apologize, but I've re-read my comment twice, and I cannot apologize because I am not contrite. I neither put words in your mouth nor insulted you. You can choose to feel insulted regardless, like you could choose to feel insulted if a teacher said "Nope, there is in fact no carbon in a water molecule -- here's some resources or talk to a chemist and they'll set you straight", but that is entirely under your control. Prior to deciding to become insulted, I might suggest pondering "Do I want to commit to routinely being unhappy when soliciting information about subjects I purport to care about from people who know more about them than I do?"

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This happened to me the other day. It's like I can't write ten words of argument on HN anymore without someone fainting dead away.

This seems like a good time to thank you for correcting many of the catastrophically inaccurate things I've thought over the years. ;)

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I see minecraft pocket edition on that list as well and it is neither a $0.99 game or a free to play. I think this is evidence that people are willing to pay for a well-made product. For me this article is simply a rehash of Zynga's whale strategy and we know how manipulative and frankly evil that is.

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Minecraft already has brand recognition though. A lot of these other games don't yet.

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And that recognition is among a less casual, often "hardcore" audience.

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No way. It's children. Boys age 9-13 are Minecraft-crazy. Anyone with a server can tell you that.

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I am absolutely baffled that in-app purchases are so popular. For me, I would rather pay a one time fee for an excellent game than be "nagged" to move myself ahead in the game. I play Tetris occasionally on Facebook, and I get so annoyed with the constant spam for extra coins, dollars, armor, line speed upgrades, etc. I'd rather pay $40 and get the game in pristine finished form.

I don't know what to make of it, really. I'm usually decent at predicting what will be popular, but this time I completely missed the boat.

It really makes me kind of sad. I remember when I was little I would get a game like Zelda for GameBoy for $30. That game obviously had tons of work put into it and gave me endless hours of enjoyment. Games for phones seem to lack this kind of depth.

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I'm 100% with you: personally, I would happily pay a substantial price for a good quality game, which I could install on whichever computer I want without it messing anything up, and which had a single-player focus. Sadly, hardly anyone makes games like that any more.

It is, unfortunately, the logical conclusion of Internet piracy. The pirates can talk about how a ripped off copy isn't really a lost sale and they wouldn't have paid anyway until they're blue in the face, but the fact is that someone has to pay for the games these people obviously enjoy so much. Given that one-off big purchases of games seem to have at most 5-10% efficiency in terms of people buying legal copies, the people making the games are looking for alternative models where the pirates can't just copy the whole thing, which means something where you take the money interactively or something where you never actually get most of the game data installed locally so you can't copy it. And that means in-app purchases for the little guys and things like DLC and MMOGs for the big players.

And they still throw in increasingly obnoxious DRM for good measure, presumably because the net win from making it more difficult or time-consuming for some people to get a pirate copy outweighs the loss of custom from people like me who would buy a good game without the junk but won't spend that kind of money on software we aren't actually going to own/control.

In short, if you miss paying a fair price for a finished game, blame the pirates, and blame the short-sighted executives at the big game companies who couldn't find a better way to respond to those pirates than screwing their legitimate customers.

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Your comment just reminded me why most of the software is going SaaS. One could conjecture that the developers see IAP exactly as a SaaS.

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There are definitely a lot of the same arguments to be made for SaaS, though I think there are others as well in that case.

For one thing, many relatively small payments is often an easier sell than one big payment, even if the small payments add up to more over the long term and even if the customer is fully aware of this. (Although on reflection, a model that seeks to get many IAPs over an extended period isn't so different in this respect.)

For another thing, customers who are unsure can try the service legitimately without paying "full price" or resorting to piracy. At the other end of the spectrum, while you're potentially making more money from long-term subscribers than you would with a large, one-off payment, those are probably the people who get the most value out of your service so they don't necessarily mind. So you get a certain amount of self-selecting market segmentation without even having to do any work for it.

But sure, the automatic copy-protection without the downsides of intrusive DRM is definitely a huge win for SaaS.

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An interesting variation on F2P is the one used by World Golf Tour [1], which I've been playing a bit recently.

Instead of forcing users to pay real money to get better equipment, it has another means of earning credits: viewing advertisements. That means that a) I don't feel like I'm actually spending money (except opportunity cost), and b) they can show pretty well-targeted ads to users who are requesting to see them. I don't know the financial details, but I'd guess they can sell for a pretty decent rate. And you have to view quite a lot of them to get as many credits as you could have bought outright for $10.

As an added bonus to them, relying on ads means I have to disable AdBlock for their entire website.

[1]: http://wgt.com

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Interesting fact on how desperate people can get to be better at games. The lack of in app/game purchases in MMOs created a whole industry called "Gold farming" http://en.wikipedia.org/wiki/Gold_farming

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Free to play is the modern coin-op. Sure, it can ruin a game - anything can. Executed properly you'll find a mechanic of variable pricing based on a customer's interest in your product. If someone cares more, they (can) pay more. Who could ask for a better pricing model?

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They are making up for it in merchandise.

I have been touring the US this summer and have been amazed by the number of people wearing Angry Birds shirts. Even grown men. Walmart has huge Angry Birds signs right next to established brands like Levi and Nike.

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If I wasn't living it I would believe this to be The Onion or something out of 1984.

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It makes sense that the free apps are making more when you think about it. They're getting the most money out of each customer. Every customer is not worth 99 cents. Some are worth a LOT more. Just like when you go overseas and the locals have on cheap price for locals and a much higher price for the rich foreigners.

There have to be other ways of achieving the same end goal however without the constant nagging. Has anyone tried a game where people pay by the hour for instance? First hour free?

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I think this wave of Free-to-play games with incessant requests to gamers to buy in-app coins and whatever might lead to a wave of expensive (like $30-$60, similar to the desktop market) up-front games that will have a promise of no in-app purchases. I know I'm at least, and I suspect a lot others, are yearning for the old days of Sim City and Sim Tower where you didn't have to pay extra for specific buildings.

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I don't see any failure there. They have relatively few installs, but near top revenue, meaning: nearly everyone have already installed their stuff, and stuck with it, and spend a lot there. They just turned into an established business, maybe no longer a 'startup'. Falling growth rate is inevitable if you have already conquired the world.

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If you'd like to see the fall over time, here's a graph: https://skitch.com/webwright/eq2es/angry-birds-rank-history-...

The blue line is the overall grossing rank over time.

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OT, but in CSR Racing and many "pay to avoid waiting" games, there's actually a bug where if you move forward the time on your device, the game thinks the time has passed and gives you the free gas.

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But then, the time is wrong on your phone - which could cause problems far worse than "having to wait for a new feature on a mobile game."

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Curious about the credit management mechanism. For the unused credits (coins), can the users ask for refund? Or they expire after some time, just like the cell phone purchased minutes.

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Refund?!

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How will this effect Google's Mobile Advertising Strategy? As the numbers show for almost all free Apps, the In-App-Ad's are being replaced by In-App-Purchasing...

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IAP games are like going to the arcade and paying some small amount per play, rather than buying the game upfront and getting to play as much as you want.

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I hope the trend proves to be short lived, and suspect it will be.

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