Freemium, free-to-play and IAP are now entrenched in gaming for the iPhone, iPod touch and iPad. But is that a bad thing, or has the system just been too often abused? I ask developers whether micro- (and not-so-micro-) transactions are the future of the industry, and how that will affect the games that are made

Freemium iOS gaming is rarely far from the headlines. Recently, EA transformed console-like Real Racing from fixed-fee to freemium, irking long-time fans—the third entry in the series is packed with in-app purchases (IAP) to speed up enforced time-outs for car repairs. Things are no rosier in casual gaming, with newspapers regularly reporting on children getting hold of an iPad and blowing months of their parents wages on virtual in-game currency.

Simpsons: Tapped Out iOS gameThe Simpsons: Tapped Out made headlines after a child burned through thousands of disposable ‘boatload of donuts’ IAPs, each costing £69.99.

But with the App Store’s top-grossing chart dominated by free-to-play titles, is it any wonder developers find this payment model enticing? “Perhaps it would be a healthier world for game developers if the minimum price of all games was a fiver, but that world doesn’t exist and it’s pointless to pretend it does,” mulls Ste Pickford (Zee-3—Magnetic Billiards, Naked War). Like others, Pickford believes digital distribution led to an “inevitable” drift towards a purchase price of zero; he suggests developers “get on with working out how to make good games—and a living—within this landscape, rather than clinging to old business models”.

Those already immersed argue freemium can bring benefits. Bob Koon (Binary Hammer—ChuChu Rocket!) sees it as a way to combine a trial and full app: “This means the developer only has a single version to manage.” Richard Perrin (Locked Door Puzzle—Kairo) says it “removes the hurdle of getting someone to try your game,” which Erick Garayblas (Kuyi Mobile—Streetfood Tycoon) adds is particularly important when the App Store doesn’t allow demos of paid apps.

Drawing in more players is key. “If you’re not free, you’re competing against free, which is becoming a de-facto standard,” argues Stephen Morris (Greenfly Studios—Drop That Candy). “End users have a very binary choice: a small outlay or free—and we know how fickle users can be! But given the opportunity to try a game for free, they might be willing to reciprocate generosity down the line.”

This is an aspect of freemium that chimes with Pickford: “At its best, freemium contains the ability to allow your biggest fans to spend more money on a game they’re really enjoying than otherwise, and that can incentivise developers to make better games”. Tracey McGarrigan (Amuzo Games—LEGO Hero Factory) thinks similarly. She says Amuzo frequently has new ideas for existing games but no budget for implementation: “But a freemium title enables continual investment. Those who love it and want more can pay. We can add new content and optimise the game, meaning old and new players alike get a better experience.”

Hero Academy for iOS

Hero Academy is free to play. IAPs are used to buy new teams (none of which is more powerful than any other) and cosmetic customisations, and the app has over its life been updated with new content.

Pickford notes there are subtler benefits, too, not least eradicating the “worst aspect of console game development—the constant pressure for better visuals over gameplay”. He explains console games are often optimised to look fantastic in screen grabs and promotional videos, to justify a big-ticket entry price; but freemium games have to hook you with gameplay, which Pickford hopes will result in “developers focusing on engaging game mechanics rather than spectacular set pieces”. That said, he is concerned genres that can’t be smashed into a freemium model might disappear, and Dan Gray (ustwo—Whale Trail) admits freemium has forced changes to how games are designed: “We’re more competitive for a user’s attention in the opening stages—there aren’t slow-burn build-ups to later rewards, because there’s no up-front cost that will commit someone to seeing it through. Instead, freemium games offer bursts of player rewards that fit into spare moments.”

Freemium, though, also has a dark side. “I think in theory freemium can be done well, but it hasn’t been implemented well yet,” asserts Rami Ismail (Vlambeer—Super Crate Box, Ridiculous Fishing). The problem, he says, is for the IAP model to be viable, you need to attract as many people as possible, constantly nudging them towards purchases that have no maximum. One might argue developers should simply be more ethical, but Ismail draws attention to Gasketball: “It was a fun multiplayer game that tried to implement IAP in a non-evil way, with a low maximum spend, and the game wasn’t limited or rebalanced to force you to choose between ‘proper’ gameplay and not spending.” The game was downloaded hundreds of thousands of times but made barely any money. “They weren’t being evil enough,” proffers Ismail.

Gasketball for iOSGasketball tried to implement IAP in a non-evil way. Despite many downloads, it was a commercial flop. The problem: not being evil enough.

Punch Quest was a similar story: highly regarded and playable, and seemingly popular, but not profitable—to the point the game later ended up with a small price tag for a while in an attempt to recoup costs. More often, though, you hear about, as Ismail puts it, games specifically designed to be “less fun unless you pay, but just addictive enough that you want to play”. Money and research is poured into analytics, metrics, monetisation and behavioural targeting. “The difficulty for me is you’re then no longer designing the most engaging experience for a player, and are instead designing mechanics around getting people to drop money as often as possible,” says Perrin, who likens this system to the gambling industry. “Those games exploit addictive tendencies, while others aren’t so much pay-to-win or even pay-to-play but pay-to-not-play, with timers and resources you can buy your way out of, making the game shorter. What does it say about your game if people are paying to play less of it?”

The common conclusion is there’s potential in freemium, but it’s too often abused. Those we spoke to were especially critical of its use in children’s games. “Targeting kids—who might not appreciate the value of money—with £69.99 consumable IAP isn’t right,” asserts Pickford. Gray agrees: “I’m an advocate of a ‘dad mode’, basically ‘give me everything now’ for a reasonable fee! This should be an amount morally fair for your user and it’s certainly not £69.99! There’s a sweet spot where everyone wins.”

But with the industry often aiming for greed, the risks are great. McGarrigan hopes the industry will start taking IAP responsibility seriously and look into the issue in greater depth. Otherwise, she thinks there’s a danger of a “noticeable percentage of the prospective audience disabling IAP on family devices”. Others are more pessimistic: Perrin believes “sooner or later there’s going to be an incident so egregious that questions will be asked whether these games need regulation like the gambling industry has”. Without a shift in attitude from the industry as a whole, Kris Jones (Thunder Game Works—Trenches 2) warns “companies will be seen as predators and its gamers as victims,” and if mainstream companies—such as EA—are considered culpable, “the entire industry will be scrutinised”. Without change, Pickford adds the industry will end up “alienating gamers with inappropriate, anti-consumer monetisation”.

Real Racing 3 for iOSIn turning Real Racing from premium to freemium and adding timers for car repairs (which can of course be skipped using real cash), EA alienated many iOS gamers.

So what’s the solution? Jones posits more companies could follow the lead of a game he worked on, Trenches 2; that title enables players to earn all unlockables without spending, and has reasonably priced IAP for those who don’t want to commit too much time to playing. As good examples of freemium, others cite Temple Run 2, which lacks artificial timers and again provides a basic grind/pay alternative, and fantasy board-game Hero Academy, which has no barriers at all and instead charges for new teams and player customisation. As Jones puts it: “If I want to spend £5 on a virtual car, let me—just don’t make me spend another fiver to fill up its gas tank and rotate its tires!”

For Morris, the key is for developers to recognise gamers are often buying experiences and feelings rather than content: “You don’t buy a Santa hat because it’s a hat, but to celebrate. If we can supply such experiences in an ethical manner, we’ll capture the best parts of what a freemium title can be.” Gray, though, thinks the solution is simpler, in being all about balance: “I’ve spent tons of money on certain freemium games, not because they’re ‘grindfests’ but because they’re good enough to spend money on. Make a game enticing enough and people will pay. Garner trust in your users by offering value and development in the free content, so trust is returned in the purchase of great new content.”

Garayblas agrees: “The focus should be on the product itself, its main essence and providing a great experience to the end user. Nail those aspects and money will come along easily.” And Perrin notes that this aspect of gaming is still in its infancy and so still has time to evolve into something better: “My hope is gamers will soon get wise to the cheap tactics many use and force developers to make better games. Also, although freemium will continue to be a part of the wide gaming tapestry, I don’t believe it will be the only valid model. I see the future as one of diversity, both in platforms and also in business models.”

This article originally appeared in Swipe magazine for iPhone