One of the greatest mistake game companies make is building or launching products that are paid apps, not free-to-play (F2P), which then monetize through micro-transactions. Despite the fact that survey after survey shows F2P games generate more revenue than paid apps, virtually all the investment money goes to F2P products (and VCs are pretty intelligent) and most companies that abandon paid apps for F2P never go back, there are a surprisingly high number of companies still focusing on the paid app model. In particular, many mobile studios whose roots are in the traditional (console) gaming world still prefer the paid app model. As I am often asked to help game companies, it is very frustrating when they forgo my advice and build a paid app. The usual refrain is “But look at Angry Birds.”
A recent analysis by Forbes (“Rovio’s Revenue Crisis and the App Market Evolution”) shows beyond a shadow of a doubt it is just foolish to still be building paid apps, even if you are Rovio. To summarize the key analysis and findings from the Forbes data: Continue reading “Don’t charge for your app, PLEASE (at least if you want to make money)”
I read a great interview on CNN.com with Rovio’s VP Bus Dev, Ville Heijari. Rather than repeat the interview, I strongly recommend you read it yourself.
My big takeaways from it were:
- Rovio started in 2003 and did not have a success until Angry Birds (2009). Before Angry Birds launched, they had to cut their staff from 55-60 to 12. If Angry Birds was not successful, they would have had to decide whether or not to continue operating.
- Until Angry Birds, Rovio normally spent 3-4 months on a mobile title. Angry Birds took about eight months because of additional iterations and polishing (including adding the catapult).
- What the above two points combined say to me is that if they did not spend the additional time on polish, Rovio would not exist today, let alone be worth over $1 billion.
- Rovio is now moving into publishing, having licensed a game called Amazing Alex. It is consistent with Zynga’s strategy to add third party publishing, thus increasing the value of their player base.
- Rovio sees itself as an entertainment company, not a game studio.
Overall, I found the article a very useful insight into one of the key players in the mobile game space.