Electronic Arts has launched a free Pogo games app for Apple's iOS (iPhone, iPod Touch, iPad) devices. Featuring five games drawn from its Pogo casual online games service, the app is available for free with advertising. Users can pay to remove the adverts via a $2.99 in app purchase.
EA Mobile previously experimented with free ad-supported apps in 2009, with the release of Lemonade Tycoon for the App Store. The game was available as either a free ad-supported download or for $0.99 without ads. EA Mobile did not pursue this strategy further. Instead, it concentrated on releasing premium paid titles largely drawn from its catalogue of parent company and licensed IP (intellectual property).
EA Mobile's strategy of releasing high quality, premium titles based on established games franchises has largely been a successful one. EA is one of the few iOS games publishers that has been able to secure top 10 chart places while maintaining relatively high prices ($2.99 and above). In Q3 2010 however, EA Mobile saw its growth stall; Q3 2010 saw EA Mobile's first quarterly decline in revenues, which dropped from $51m in Q3 2009 to $49m in 2010.
Screen Digest believes freemium (free content that can be monetised at a later stage via advertising and in app transactions) business models will become an increasingly important source of revenue for mobile games publishers in 2011. In its most recent analysis, Screen Digest counted more than one-third of the top grossing US App Store games that were available for free and monetised via in app purchases.
Paid downloads are still expected to provide the majority of iOS games revenues in 2011. However, major publishers, as evidenced by EA's move, cannot afford to ignore freemium business models. Glu Mobile, one of the traditional 'big three' Western mobile games publishers shifted its strategy to focus on freemium games from Q4 2010. The freemium mobile games sector has been a focus of significant VC funding and mergers and acquisitions activity. In October 2010, DeNA (owner of leading Japanese mobile games focused social network Mobage Town) acquired freemium iOS games publisher ngmoco in a deal worth up to $403m. Screen Digest expects further consolidation in this sector throughout 2011. Major mobile games publishers such as EA Mobile, will need to embrace freemium business models alongside offering premium paid downloads to maintain leading positions in this market.