Apps that switched to freemium saw rapid growth – report

22 Jul 2014

Paid apps switched to the ‘freemium’ model for a limited time on the App Store soared the charts with increased revenue, a new report suggests.

App Annie, the app analytics group, has issued its latest report on the state of the app market on both iOS and Android highlighting the dominance of freemium apps – those that are free to download with in-app purchases – in comparison with the traditional apps that charge a one-time fee.

The examples highlighted in this case include Halfbrick Studios, an Australian game studio that leaped 43 places in the iOS game developer charts to the No 3 position in June 2014. Halfbrick Studios made the switch to the freemium model for a limited period of time, coming behind the two largest developers Electronic Arts (EA) and Gameloft.

Fruit Ninja and Fish Out of Water!, two of Halfbrick Studios’ games, also climbed the charts to reach the top 10 of downloaded iOS games as a result.

In terms of what apps have proven popular with users, TwoDots from Betaworks One reached the No 1 spot in June, with only two of the previous month’s top 10 staying in the charts showing the rapid pace of change in the app industry.

EU criticism of freemium model

Despite its obvious financial success, the EU has criticised Apple in particular for its regulation of in-app purchases through the freemium model.

App Annie’s executive vice-president of marketing, Oliver Lo, has welcomed the enforcement of tighter regulations. “In June, revenue from freemium apps accounted for over 95pc of all app store revenue from the iOS App Store and Google Play combined.

“The proposed legislation legitimises a business model that app publishers know is working and provides greater transparency to consumers. It demonstrates the real and meaningful effect that new app business models are having on the wider world.”

Apps image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic