Rovio Delists Last Paid ‘Angry Birds’ Game Because The Free Version Is More Profitable
from the but-free-can’t-work dept
You have to love a story that comes full circle after all these many years. For a long, long time, we at Techdirt have been advocating for business models that make use of free content. The idea, which can certainly be counterintuitive, is that if you make parts of your product free to the customer, particularly the parts that are reproducable at zero marginal cost, then you can build in value-adds one way or another that you can charge for. Whatever you lose in not charging for some content, you can make it up via an increase in reach and/or market share, assuming you do it well. At this point, the examples of such business models are ubiquitous, but it wasn’t all that long ago that you would hear executives from various industries flatout state publicly that “nobody can make money from ‘free’.”
Ah, the irony. Rovio, the company behind the Angry Birds franchise, just shut down its last remaining paid version of the games. Why? According to Rovio, the paid version was interfering with the much more profitable free versions of its games.
In a tweeted statement earlier this week, though, Rovio announced that it is delisting Rovio Classics: Angry Birds from the Google Play Store and renaming the game Red’s First Flight on the iOS App Store (presumably to make it less findable in an “Angry Birds” search). That’s because of the game’s “impact on our wider games portfolio,” Rovio said, including “live” titles such as Angry Birds 2, Angry Birds Friends, and Angry Birds Journey.
All of those other Angry Birds games are free-to-play titles in which players can earn extra lives or helpful items by purchasing in-game currency or watching short video ads. Those changes were roundly criticized when they were introduced into the Angry Birds universe, but that didn’t stop the free-to-play games from becoming highly lucrative for Rovio.
How far we’ve come, from “you can’t make money from free” to “our paid apps are keeping us from making even more money from free!” And it’s not for lack of the paid product being popular. According to Ars Technica, Rovio Classics: Angry Birds is currently the 2nd best-selling app that requires payment in Apple’s App Store, except:
But that chart-topping position translates to just $30,000 in estimated monthly revenue, according to Sensor Tower estimates. The free-to-play Angry Birds 2, meanwhile, attracted 900,000 new free-to-play downloads last month and raked in over $9 million in revenue, according to those same Sensor Tower estimates. But that strong revenue number is only enough to make Angry Birds 2 the 74th highest-grossing iOS game on the current iOS charts.
The post notes that this shows that the general public is not willing to pay for these kinds of apps at scale… but that’s really only part of the story. It is true that the public has become accustomed to freemium-style mobile games, but that’s only because so many of them have worked so well from companies that have pulled off the business model equation correctly.
Put another way, if these games were absolute garbage, no amount of free content would be enough to get the public to play them. In addition, if the paid-for portions of the game didn’t provide enough value, or if the embedded advertising were too intrusive or annoying, then people would likewise not play these games. To make $9 million in revenue from just one of these games requires those sweet-spots to have been hit, which Rovio did.
So much so, that asking the public to pay for the base content hurts the bottom line.
Filed Under: angry birds, business models, free, free to play, video games