The freemium model is yet another reason mobile gaming is a brutal space

The New York Times posted this insightful piece over the weekend documenting Disney’s struggles to capitalize on the growing mobile gaming industry. The recently released follow-up to Where’s My Water garnered tepid reviews and has flopped after a successful opening weekend, and no other recent Disney title has come close to duplicating that franchise’s success. The company recently cleaned house, accepting the resignation of gaming chief John Pleasants and another top executive and installing a different management team.

I’ve written several pieces this year documenting how heavy hitters like EZ and Zynga have struggled to expand beyond traditional gaming platforms like consoles and desktops to capitalize on booming smartphone usage. The smaller screens and limited controls of smartphones are very different than other platforms, forcing game makers to build titles from the ground up rather than shoehorning them onto phones. And the lower margins of mobile games mean developers can’t invest as much in creating those titles as they can to build, say, a $50 Xbox game.

But the Times piece examines how the establishment of the freemium model creates yet another hurdle for mobile game makers. Charging even a dollar or two for a game limits its appeal when so many free games are available, and monetizing those users by putting a price tag on extra levels and power-ups is no easy task. So publishers are being forced to experiment with all kinds of premium extras during the life-cycle of a game, analyzing what works and what doesn’t to wring as much money out of each title before its popularity declines. And that’s a very different strategy than simply building a game, releasing it and then moving on to the next one.