The Games World Goes Freemium at Casual Connect

Every Casual Connect there is a theme that permeates through the hallways, lecture rooms, and social fests. One year its downloads, next year it’s Facebook, iPhone, Android.

So what was the phrase repeated time in every conversation at the show? Freemium games.

Freemium games can be played for free, but players must buy items or levels in games to progress.

This is the model that popularized games on Facebook and is the main driver behind Zynga’s profitability ($11.8 million in profit on $234.50 in revenues in 1Q 11) and eminent IPO.

This is also the main driver of growth of games on iOS and Android devices. According to Flurry, freemium titles accounted for 61% of all revenues for the top grossing games in January 2011, up from 31% in June 2010.

Even game downloads have been bitten by the freemium bug. You don’t buy games with cash on Big Fish Games. You pay with credits. Wild Tangent allows you to purchase Wild Coins which you can redeem to rent and buy games and now GameHouse has a point and reward system.

I am not saying that every game is going to be freemium by the end of the way. I do predict, however, that there is not one game platform or device, where freemium will not be the primary revenue model, and that includes Nintendo consoles.

Quite frankly, I’d be surprised is other forms of entertainment content, such as TV, movies, and books, so not adapt the freemium model in the future.

I spoke to numerous game companies that told me that once they have tried selling games through freemium, they are never go back to selling games any other way. There is simply too much money to be made in freemium compared with any other business model for games.

Freemium’s biggest impact on games that it truly extends the idea of casual games to everyone on this planet. Everyone with a smartphone or cheap computer can afford to play games for free.

And, for the first time ever, there is one business model that unites all games across all devices. This will push the trend of game developers launching games cross-platform even further.

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