Watch out: Freemium might be the future of (mobile) gaming?

When it comes to the Apple (AAPL) iTunes App Store, the move toward “freemium” — games that are free but include in-app purchases for virtual items — is growing. This is mostly because freemium is a pricing model that gets a lot of downloads and has started to earn a few companies a lot of money. And while on its face, freemium looks like a great model that gives gamers the ability to play cool titles along with the option to expand their experience if they choose, the problem is that, as more developers see dollar signs, the “free” portion of freemium is probably going to diminish.

More and more, freemium apps are doing well in the App Store. They currently make up about one-third of the top-grossing titles. If you’re not clear on the concept, turn your attention to the games found on Facebook, which are generally freemium in one form or another. These are games in which developers like to include the ability to make small purchases from within the interface (called micro-transactions). The word “freemium” refers to the fact that the game is technically free, but includes “premium” content worked in, which requires a payment. The biggest games on Facebook, like CityVille, FarmVille and Mafia Wars (Zynga games all), have huge communities and rake in a whole lot of money even though the games are all free to play.

via Watch out: Freemium might be the future of (mobile) gaming – iPhone app article – Phil Hornshaw | Appolicious ™ iPhone and iPad App Directory.