Mobile Game Prices Falling But Revenue Up From In-App Purchases

Mobile games remain one of the best ways to make money from mobile applications, according to a new report from mobile app researcher Distimo. And developers are realizing they can make even more money over the long run by reducing the price of their games and finding ways to encourage in-app purchases.

Distimo’s latest monthly report on the mobile industry looks at the mobile gaming situation across all major mobile application stores, including Apple’s App Store, Google’s Android Market, Nokia’s Ovi Store, BlackBerry App World, Microsoft’s Windows Phone 7 Marketplace, and others. In the most popular store–Apple’s App Store–the average price of a mobile game fell by 28 percent from $2.01 last June to $1.44 this June. But that has been offset by a rise in the number of top-grossing apps using the “freemium” model of charging nothing for the app itself and then charging small fees for upgrades or enhancements to the app.

A year ago only eight percent of the top-grossing games in the App Store were giving the game away for free with in-app purchases. This year, 52 percent of the top-grossing games fall into that category, and overall revenue from the top-grossing games has increased 79 percent over that time frame, according to Distimo’s research.

A link to the report with more information can be found here.