Back in the early 2010’s the mobile gaming industry took a good hard look at the periodic table of elements and decided to spice up their jargon with chemistry suffixes. At least that was what I used to tell my friends when the free2play gaming model started booming on smartphones. You had Premium Games, Freemium Games, Paymium Games and Borium (what we used to call boring) Games. All these terms used to mean something but in recent years things got a bit muddy. So, what even is Freemium nowadays? What’s the difference between freemium, premium, pay to play and pay 2 win?
Your Answer Upfront:
Freemium games (or Free To Play Games) are free games distributed with a $0 upfront cost that anyone can download and test. They are usually supported by ads or recurrent in-app purchases but some of them can feature 0 monetization. Pay To Play (or Premium Games) are games with an Upfront Cost ($0.99->$99.99) that you need to pay in order to access the game. Pay2Win games can be both Freemium and Premium games in which progression or success is gated by the need to purchase elements that offer you a bonus that you wouldn’t be able to achieve in the game without paying.
In this article we’re going to take a look at the quick history of game monetization (aka how games used to be distributed, sold and monetized before the smartphone gaming revolution). We’re doing this so we can see just how much things have diverged over time. After that we’ll go into detail about Premium Games, Freemium Games and we’re also going to go in a bit of a rant on Pay2Win.
By the end of this article you’ll have a pretty good idea on the difference between freemium, free to play and pay to play.
Quick History of Game Monetization
As it’s usual with my articles on this blog I like to start by showcasing just how much things have changed since the dawn of the industry. Feel free to skip this section but I think it helps put into perspective just how “different” things are nowadays and yet, so much similar to the past.
Back in the hay-day of game purchasing you have various forms of distributing games and some of them intertwined and lead us to the monetization models used nowadays.
- Premium Games
Premium games were the backbone of the industry. You would go to a store, drop $20 – $70 on a box with some floppy disks or a CD and take it home. It came with a manual, some advertising for other games in the box and you would install it on your computer.
If you didn’t like what you found tough luck, maybe the store would accept it back and offer you store credit or reimburse you but for the most part, that was it. However, people used to research game purchases beforehand.
Premium games would last you a long time with content spanning tens of hours and a good purchase would keep you busy for months and months.
Usually used for MMO Games, like good ol’ World Of Warcraft or Runescape. You purchase the base game and pay a monthly subscription fee to keep playing. Your payment would be used to keep the servers going and to create new content for you to enjoy.
Shareware games were cut-down versions of premium games and were distributed and shared Online, Via Floppy or on Shareware Collections. You could get them for free or pay $5-$10 for a disk with multiple shareware titles on it. The whole idea of Shareware was you’d get the game or software and if you liked it, you could register it to get access to the whole content (or get rid of nagware style pop-ups).
You can think of shareware as the precursor of modern day freemium games. You could get it for free and in-exchange for a little bit of your hard-earned cash you could unlock the entire content or bits of it.
Demo’s were specifically designed versions of popular games, usually one of the best or most intriguing parts of a game OR the early level content. The whole idea behind demos was to showcase the game and get people to buy it. Usually they wouldn’t contain an unlocking mechanism.
Think of demo’s as a free taste of the game. This practice was even common on mobile games in the first few years of the App Stores. Gameloft used to offer demos for Asphalt, Star Legacy and more. This changed over time with the addition of unlocking the full game via an in-app purchase, but before then? You’d have to download the full game separately.
Trial versions of games were available in a similar fashion to demo’s or shareware but they were timed limited (6 hours, 10 days, 30 days, etc) and sometimes had saving/exporting locked. After the trial period was over you had to cough up the cash for it or stop using it because it wouldn’t work anymore.
As a fun little tidbit in the late 90’s and early 00’s most people weren’t connected to the internet so a lot of the trial versions relied on your local computer’s time and date settings. You wanted to keep using a trial game and keep playing it? All you had to do was revert the time and date on your computer back a few days and that’s it.
With the dawn of internet, data plans and mobile data plans trial software began calling home to ask for the date and time instead of using local data.
Last but not least there were free games out there. Free as in beer (as in, you get a free beer to drink) not free as in freemium (aka you get to play it for free but you’ll have to watch ads for us to make money). Imagine watching an advertisement before taking a sip of your favorite beverage.
Now some things changed in modern days and all these various forms of monetization have merged and evolved. Nowadays Demo’s are all but gone and Free + Trial + Shareware merged under a singular umbrella: Freemium. Premium is still around though less and less games launch with a full upfront price.
So let’s go over the old-but-new monetization methods and see how exactly they behave and perform nowadays. Let’s see what the difference between freemium free to play and pay to play is.
What is Premium (or Pay 2 Play)?
Premium or Pay 2 Play is a game monetization method where you Pay up front for a game. It’s the least popular monetization method used just by judging by the amount of games released with a Premium Price (yes even $0.99 games with no IAP’s or Ads are considered Premium Priced).
Normally Premium games come with no ads and no In-App Purchases (for consumables, premium games might still feature IAP’s for DLC’s, expansion packs and additional content). Premium Games are usually highly polished games, with a lot of content and a higher than average level of quality. They usually (but not always) feature a high production budget, voice acting and strong content design.
These are the games like Alien Isolation, Grid, XCOM 2 or Divinity: Original Sin. If you want to check out 5 Premium RPG’s for your iPad you can read one of our recommendation articles titled “Here’s 5 Great Offline Premium RPG’s“.
What is Freemium (or Free 2 Play)?
Freemium games are games distributed with a 0 upfront price and it’s one of the most popular methods of monetizing mobile games nowadays. Freemium games are usually monetized via the use of in-game advertisement and/or supported by micro tranzactions in the form of In-App Purchases.
Freemium games usually leverage an energy system (stamina or life) or have their progression gated. In order to progress you usually have to either:
- Watch X number of ads in order to:
- double your earnings
- reduce the waiting timers
- increase your XP rate and improve your starts
- unlock the piece of content/upgrade needed to advance (car upgrades, epic sword, healing potions)
- Purchase consumables in order to:
- Restore your health before the big boss fight
- Bribe the enemy town keeper to reduce the waiting timers before accessing the “city”
- Purchase that one weapon (sword for example) that has bonus 500% more damage against the enemy types you can’t defeat
- Increase your income or revenue in an idle game so you can progress faster
- Receive new characters with better skills or armors
- Receive content to explore while the previous content is under a cooldown
- Obtain currency needed to be able to keep playing the slot/casino game you are playing
These kinds of games leverage the idea of Recurrent Consumer Spending in order to boost their revenue and the reasoning behind the free price tag is pretty simple.
People don’t want to spend time researching a game before dropping $5 – $10 – $30 – $60 on it. If the game is free and it’s a 1 tap install process they can check it out and stick with it if they like it. This way the developer/publisher can ensure they receive a lot of installs and the price of purchase gets postponed a few hours/days down the line.
I said it before in other articles, people, especially newcomers to the mobile gaming industry, don’t want to spend money on a game upfront. Dropping $5 for a game is not something they want to do but they can be tricked into spending $100-$200 on a free game over the course of a few months on “one-time purchases”.
If you’re interested in reading more on this subject I have a few articles that might interest you:
- Why Do People Spend So Much Money On Mobile Games
- Why Do Free To Play Games Make More Money Than Premium Games
- How Much Money Does The Average Mobile Game Make
What is Pay2Win (or Free But Also Not Free If You Don’t Want To Constantly Lose)?
Pay2Win refers to the practice of releasing mobile games in which progression can be achieved only by paying real money in that game. It especially targets multiplayer or social based games where competition between players is set front and center. Without paying progression is incredibly slow to the point where you would have to grind OR wait for hours before advancing in that game.
Pay2Win games can be distributed both as a Freemium or Premium game with the first being the more common method of distribution however Premium games (especially MMO’s, MOBA’s or Battle Royale’s) usually include elements of P2W.
The idea behind it is simple. You are thrown into a match against other players. It starts out easy, with everyone being the same rank and skill level as you. As you play through the game and increase in ranking the game get’s harder and harder to the point where you just cannot earn a single kill against your enemy. You reach a point where the same person kills you again and again in seconds thanks to their +300% fire damage bullets that they use.
So you have a choice, do you want to drop the game you spent time on and that you seemly enjoyed so far OR do you want to pay $0.99 for the same fire damage bullets? If you choose the latter, you spend the $0.99 price, get the fire bullets and you suddenly proceed to own “noobs” in the game. It could be because of the bullets but what if everyone is using them? Well some games specifically alter the match making algorithm in order to put you, as a purchasers, in battles with people who did not purchase. This way you feel like that purchase had value, that you’re a great player and no one can stop you. And once the bullets run out, you’ll want/have to purchase more to play the same.
Pay2Win games aren’t so much about the competition aspect and more about making you feel powerful in exchange for some of your hard earned money. And there’s a fine line a developer has to walk in order to avoid designing a Pay2Win game.
Where To Next?
You’ve reached the end of this article. I write extensively about the mobile gaming industry, their tactics and how greed influences a game’s design. I believe that you might be interested in more articles on game monetisation. So if you want to stick around, you can check out “How Do Free Mobile Games Make money“, “Why Do Mobile Games Have Fake Ads” and “Why Do Mobile Games Have In-App Purchases“.
There’s also a monster post (about 4000 words) that answers the question: “How Hard Is It To Make A Mobile Game“. It goes in depth with actual examples on how Experience, Resources and Financials affect the difficulty of developing and releasing new mobile games!
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