Freemium or pay-to-play: Which is more profitable?

How do I make the most profit from my app without sacrificing user experience? This is an age-old question for the seasoned developer. The good news is that in 2014 there’s plenty of data out there to help you decide.

In 2013, the free-to-play games category continued to dominate, increasing in revenues by 45 percent. This equates to a massive $2,893 million dollars of sales, according to a report on the US digital games market. In comparison, the pay-to-play segment lost 19 percent, bringing home $1,126 million dollars last year.

This data shows a continued trend towards freemium and in-app purchases, causing some software execs to claim that the end is nigh for the traditional pay-to-play model. But freemium simply doesn’t work for some apps and the model itself has come under criticism from successful pay-to-play developers who insist that it doesn’t always deliver quality to the consumer.

So what to do? Here are a few questions to help you decide on the right monetisation model for your app:

• What do you want from your app? Are you simply trying to make money or are you a new developer seeking brand recognition and awareness of your product? If it’s the latter, then perhaps free is the way to begin.
• Does your app naturally fit a certain monetisation model? If your app doesn’t easily support in-app purchases then crow-barring them in will likely have a negative effect on user experience and result in few or no purchases.
• What platform are you focusing on?Data shows that different app stores tend to support different monetisation models. Users of the Google Play store, for example, tend to favour in-app purchases, unlike Apple Store customers.
• Which region are you aiming at? App users’ preferences vary by geographic market – what works in Asia might not work in Europe or the US. Take a look at the variations across the world and it may influence your decision.

However you decide to monetise your app (if at all), remember that you can keep trying new strategies over time and that each app you make might be suited to a different model.

• This blog post is written by Softtalkblog, and is sponsored by the Intel Developer Zone, which helps you to develop, market and sell software and apps for prominent platforms and emerging technologies powered by Intel Architecture.

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