The discussion in mobile is over, Free-to-Play has won

A look back at the year in mobile shows F2P sealed a comprehensive victory, the top-grossing charts were set in concrete, and traditional publishers fell out of the frame

Editor's Note: This is one in a series of year-end content to be published daily leading up to Christmas that includes analysis, opinion and insights into the biggest news and trends of 2015.

It's been another banner year for mobile games. Market research firm SuperData reckons that by the time Auld Lang Syne is being butchered on December 31st, around $25.3 billion will have been generated by mobile games worldwide in 2015 - a healthy 20 percent year-on-year growth rate. As the market has grown and matured, though, it's taken on a radically different form from the "traditional" games market. A different business model dominates, while an almost entirely different line-up of companies control the upper reaches of the charts. The demographics are different (though more overlapping than many core gamers like to acknowledge), the measures of success are different and the strategies that work are different - leaving lots of developers and publishers flailing to figure out how to make mobile work for them.

So, yet another year in which mobile revenue boomed and growth outstripped the rest of the market, while almost paradoxically, the list of fallen and failed studios who impaled themselves on the unforgiving sword of the mobile market also grew at a faster clip than ever before. How does the mobile market look now, as the end of 2015 looms? Even if there's still no flawless gem of insight that tells us, once and for all, how to be successful in mobile gaming, are there at least some core trends we can identify, and some notion of where things might be going in 2016?

Success is the Best Indicator of Success

Want to know how to have a hit mobile game in late 2015? Actually, it's pretty simple - the main thing you need to do is make sure you already had a hit mobile game back in January. In a pretty clear sign of the maturation of the market, the vast majority of the world's top-grossing mobile games today are exactly the same games that were topping the charts a year ago. I compiled data from the excellent and comprehensive App Annie database, and found that only two of the top ten top-grossing games in the most recent chart were actually released in 2015 - both of them in the rapidly growing Chinese market.

"If you're making a mobile game that isn't free-to-play - or which implements free-to-play in a naive, ill-considered way... then you're probably going to lose your shirt in the mobile market"

The dominance of older games on mobile in 2015 is extraordinary - as is the solid position of the market leaders. Four of the top five games haven't been out of the top five since the start of the year, and all of them are at least two years old; Monster Strike (released September 2013), Clash of Clans (June 2012), Game of War (July 2013) and Puzzle & Dragons (February 2012). New title Fantasy Journey to the West is at number five (although it's based on a PC MMORPG that already had millions of players in China, so "new" is a relative term here), and then it's straight back into the golden oldies with November 2012 release Candy Crush Saga. A corollary to this, incidentally, is that the "top downloads" charts are increasingly irrelevant; although of course it's important to be downloaded a lot so that people have the opportunity to pay you money down the line, the download charts teem with games which never trouble the top-grossing charts.

Of course, the games people are playing now have evolved significantly since they first launched - mobile games that aren't regularly updated are unlikely to keep bringing in high revenues - so while this lock-in of the top of the charts may be disheartening, it's not really all that terribly difficult to the traditional games business in some regards. Franchises like FIFA and Call of Duty reliably dominate sales charts every year, after all. Still, the sheer difficulty of elevating a new game into the upper reaches of the mobile charts is undoubtedly significant, and increasing. It doesn't help that those top games are supported by absolutely enormous marketing budgets, with leading mobile games now supported by expensive TV and outdoor advertising campaigns that traditional game marketers can only dream of.

This isn't to say that there aren't still runaway indie success stories in mobile - Crossy Road, released in November 2014, is probably the biggest one of 2015 - but these are black swans, increasingly rare outliers in a field otherwise littered with corpses. Revenue from mobile games drops off dramatically as you slide down the charts; you make billions in the top 10, millions in the top 20, but by the time you're outside the top 100 you may be struggling to pay staff unless you have a very large slate of games and minimal overheads on maintaining them. The window of opportunity for plucky upstarts on mobile is slamming shut, if it hasn't already; there are ways and means for niche developers to make a living, but barring a lottery-winning stroke of luck, the only way to get to the top of the charts today is with enormous financial investment.

You're F2P, or you're Minecraft, or you're bust.

The discussion over what business model to use on mobile is over. Free-to-Play has won. If you're making a mobile game that isn't free-to-play - or which implements free-to-play in a naive, ill-considered way, like the large number of games which have a single, cheap in-app purchase to unlock all their content - then you're probably going to lose your shirt in the mobile market. In the 2015 charts, in every single month, every single top-grossing app was free-to-play. You have to go a really long way down the charts to find a game that's making money from an up-front price tag.

"It's worth knowing that Japan's dominance of the charts is largely down to big wins at home; the country's mobile gaming firms still aren't doing well at away games"

There's one exception - Minecraft, which is the only premium game that's consistently in the top-grossing charts (and almost always on top of the downloads chart). The success of Minecraft is pretty amazing, but it's important to stress just what an outlier it is. No other game has matched this pattern of success, perhaps because Minecraft was a bona fide cultural phenomenon long before it ever existed in mobile form. The sheer momentum of Minecraft has arguably never been matched by any other game (it still almost single-handedly supports the vast revenues of gaming-related YouTube, for example), a fact which I fear is regularly ignored by people making arguments for non-F2P business models on mobile. "Well, Minecraft manages it" is the 2015 games business equivalent to saying "Well, Superman does it" prior to being crushed under a truck.

This isn't to say, however, that all F2P is born equal - or that all F2P strategies are fair game. It's notable, certainly, that energy mechanics (whereby players can spend real money in order to play the game for more than a certain amount each day) feature pretty heavily in most of the top-grossing games. Many developers from traditional game backgrounds seem to find these systems especially distasteful; players, it seems, feel differently.

Japan Rules the Mobile Market

Just as the top games in the mobile space changed little over the course of 2015, so too did the top players in mobile entrench their positions. Supercell's performance was extraordinary; despite Boom Beach and Hay Day dropping out of the top ten over the course of the year (Supercell being the only company to have three titles in the top-grossing top ten simultaneously during 2015), it never shifted from its monthly No.1 position in App Annie's aggregated data.

Supercell, though, belongs to Japanese mobile network SoftBank - which also owns Puzzle & Dragons publisher GungHo, another company that never left the top 10 mobile publishers chart during 2015 (though it did dip in the rankings as its sole hit title, Puzzle & Dragons, continued to slowly decline). In fact, while SoftBank is the daddy, being easily the largest publisher of mobile games in the world, Japanese companies dominate the top-grossing charts. Mixi (formerly a social network firm, now publisher of chart-topper Monster Strike), LINE (a hugely popular messaging platform with a gigantic gaming arm attached) and COLOPL (publisher of White Cat Project among others) round out a top ten top-grossing publishers chart for 2015, fully half of which is made up of Japanese, or Japanese-owned, companies.

So much for Japan's fading influence in games, right? Don't throw away all those handy allusions to Japan's "Galapagos" nature just yet, though, because the figures belie just what an enormous market Japan itself is - and just how tough Japanese publishers find it to make their local market mega-hits work in other territories. Per capita, Japan is easily the biggest market for mobile games in the world - SuperData reckons it'll account for $6.2 billion in mobile game revenue this year, an extraordinary 24.5 percent of the world market. Although some western games have done reasonably well in this market, it's largely dominated by home-grown products - and while Japan alone is big enough to propel games like Monster Strike and Puzzle & Dragons to the top of the global charts, this hides the fact that they don't do terribly well in overseas markets. That probably doesn't do much to disturb executives at Mixi and GungHo as they slumber comfortably in beds made out of ¥10,000 notes, but it's worth knowing that Japan's dominance of the charts is largely down to big wins at home; the country's mobile gaming firms still aren't doing well at away games.

... But China is Rapidly Catching Up

If you have a market as big and profitable as Japan to exploit at home, international expansion probably isn't your top priority - and the same goes for China, whose impact on global mobile market stats soared in 2015. The Chinese market still isn't as big as Japan's (SuperData estimates it to be $5.2 billion this year) but it's still big enough to see several top ten games that will be entirely unfamiliar to anyone outside the country. New entries Fantasy Journey to the West and Journey to the West Online propelled publisher NetEase into the top ten, while Tencent (parent company of League of Legends creators Riot Games) was also comfortably among the world's top mobile publishers this year.

The Chinese market appears to be more volatile and open than Japan or the West is right now; new titles enter and leave the top-grossing charts relatively regularly, with most of the movement in the global top ten being down to shifts in the popularity of games within China, including Raven, MU: Origin and Legend of Mir 2. Like Japan, though, much of the success of Chinese developers comes from within China itself; only Clash of Kings, heavily marketed overseas by publisher Elex Technology, made significant inroads into overseas charts.

Despite China's economic slowdown, it's almost certain that the country's impact on mobile revenues will continue to grow in 2016 - and combined with the phenomenal strength of the mobile market in Japan and signs of rapid growth in south-east Asia and India, it's pretty clear that Asia is going to be an increasingly dominant force in mobile. Already, SuperData estimates that 55 percent of the global mobile game market is concentrated in Japan, China and Korea alone. Doing business in these markets isn't easy, given local tastes and often complex business environments, but any publisher that wants to be on top of the mobile game can't afford to ignore Asia.

Traditional Publishers are Struggling

Speaking of being on top of the mobile game, that's officially what traditional game publishers were not in 2015. Electronic Arts, by far the most successful of the traditional publishers who have made a move to mobile, dropped out of the top ten highest grossing mobile publishers chart in April; Namco Bandai, the only other traditional publisher that's been in that top ten all year, only made brief appearances at the bottom of the pile in January and September.

That's not to say that traditional publishers aren't doing well and making money on mobile; merely that even the most successful traditional publishers are a long way behind the "upstarts" who dominate this market. The publishing landscape has shifted dramatically; companies most of us have never heard of are now significantly larger than the firms generally considered to be the "mainstays" of videogames. Over 2016 and beyond, expect to see what we mean by the term "top publishers" - and to whom that category extends - to be significantly redefined.

"Over 2016 and beyond, expect to see what we mean by the term 'top publishers' - and to whom that category extends - to be significantly redefined"

Of course, as 2015 drew to a close one traditional publisher did make inroads into the top ten - Activision Blizzard, which by its acquisition of King becomes a top ten mobile publisher. It joins Machine Zone (publishers of Game of War) as the only American company to be ranked in the top ten publishers by revenue in the latter half of 2015. For other companies hoping to join the fray by similar means, though, the window of opportunity is closing. As previously mentioned, SoftBank owns two of the top ten; Activision Blizzard now owns another. Even if acquiring Chinese firms weren't extremely challenging legally, Tencent is out of the question unless you have a quarter of a trillion dollars lying around, while the Korean/Japanese firm behind LINE is also well beyond the price range of even most very large firms. There are a handful of acquisition targets still on the market (COLOPL could probably be had for less money than King cost, while Machine Zone is probably in the same ballpark) but any giant firms who want to buy into mobile gaming need to do it sooner rather than later.

Desktop Class Games are here - in China

Given that the top ten mobile titles shifted little during 2015, it's unsurprising that the kind of games people played also remained largely consistent - with one exception. Desktop class games, primarily MMORPGs and MOBAs, started to make serious headway on mobile this year. The Journey to the West titles which entered the top-grossing charts are ports of NetEase's hugely popular PC MMO titles, while Tencent's We MOBA, though it didn't trouble the top-grossing charts, did immensely well on downloads and may yet build up to becoming the first seriously commercially successful mobile MOBA (US-based Super Evil Megacorp's Vainglory having won plaudits, but fallen far short of the top of the charts).

Note that both of these developments happened in China. It would appear, in fact, that the long-predicted explosion in PC quality games on mobile devices is actually happening right now, but only in the Chinese market; pretty much everywhere else in the world, including neighbouring Asian market Japan, the focus remains on very distinctly "mobile-first" style games. I defer to experts much more versed in the Chinese market for why this may be, although I would speculate that it's at least partially rooted in the smartphone, not the PC, being the primary internet device for many Chinese users, and the country's significant preference for large screened phones (thought to be a considerable impetus for Apple's creation of the iPhone 6 Plus models, for instance).

Whether this trend will break out beyond China remains to be seen; certainly, the games which are leading the charge within that market are largely titles which were previously successful as PC games in China and enjoyed little overseas success, which makes it highly unlikely that their mobile incarnations will set the western world alight. Western developers may, however, look with interest at what's happening there; as more powerful phones with larger screens become de rigeur in the west as well, perhaps 2016 may see some hit western PC titles getting a new lease of life on mobile as well.

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Latest comments (14)

Nicholas Lovell Founder, Gamesbrief3 years ago
Fabulous and fascinating insight, Rob. Thank you very much.We do keep hearing about a backlash against F2P games, but the games market doesn't seem to be bearing that out.
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Anthony Gowland Director, Ant Workshop3 years ago
If you're making a mobile game that isn't free-to-play - or which implements free-to-play in a naive, ill-considered way, like the large number of games which have a single, cheap in-app purchase to unlock all their content - then you're probably going to lose your shirt in the mobile market.
To be fair, if you're making a F2P game you're also probably going to lose your shirt in the mobile market. Unless you've got $500k - $1M for your marketing budget.
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Christopher Bowen Editor in Chief, Gaming Bus3 years ago
All I read out of this is "games development is dead as a career choice unless you hate yourself".
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Show all comments (14)
Jamie Read 3D Artist, Neon Play Ltd3 years ago
@Anthony - I agree. Needs for big budget marketing have gone up and up. The way the App Store is structured only makes it a million times more difficult for smaller games (F2P or premium) to have any visibility and get a sniff at breaking into top charts against the top dogs with the lion's share, without that money for marketing. There are exceptions to this, but these are few and far between and it's only getting tougher.
I would love to see a bit of a shake up to the current system, as lots of potentially great games are getting lost in the sea of mobile through lack of marketing money and/or the structure as is.
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Klaus Preisinger Freelance Writing 3 years ago
I have yet to see a successful f2p game that is not trying to condition its players as if they were dogs. For that reason f2p is less a triumph of a business model and more a victory for psychology. After all, once you do have your audience hook and sinker, which business model would you lead them to? The one where customers buy the game for $5 in a humble flash sale? f2p is nothing but a business optimization build on an entirely different foundation of developing ethics and standards.

This is also f2p biggest weakness, it needs that foundation of psychological entrapment. That is something which can be attacked and dismantled far better than any $110 price tag on a Star Wars game. More yearly revenue will not make that go away, it will ultimately increase that pressure on the underlying concepts of f2p in an escalating power struggle between publishers and consumer advocates, featuring the publishers' 'best' customers being described as addicts. How much public pressure until turning on that IAP parental lock is as hip as parsnip among all those target demographics?

There is a the reason why a Tim Schafer can go on Kickstarter and expect to receive parts of his funding, while a f2p developer cannot. It has nothing to do with "how do you sell something on Kickstarter that has a 0$ pricetag". It already is an image problem f2p has and Double Fine has not.
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Alfonso Sexto Lead Tester, Ubisoft Germany3 years ago
The top 10 F2P chart has barely changed in months. Their market model is still heavily dependent in whales in most of cases and in a heavy monetary investment in marketing that, (this being my opinion), beats the purpose of their low cost production in most cases.

I don't call that "victory"; I call it "being stuck". Both mobile and F2P are suffering from it, F2P just got stuck in a higher place.
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Robin Clarke Producer, AppyNation Ltd3 years ago
@Anthony - I think that number is a tad high. But I suppose getting to the point where you can make an effective F2P game isn't cheap either.

@Klaus - Really? I can think of many successful F2P games that aren't fixated on the casino model. There is a tendency among some 'traditional' developers to assume that because a game doesn't appeal to them personally, the only way it can be making money is through hypnotising players with poor impulse control.

Consumer expectations have shifted and whenever that happens I think you ultimately have to acknowledge it or gradually get left behind.
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Nicholas Lovell Founder, Gamesbrief3 years ago
Robin, those are great points.

@Klaus, @ Christopher I find it sad that the two of you have a blinkered, narrow perception of F2P that belies the range of games and the enormous expansion of gaming audiences that F2P enables. I do accept that some games have bad practices that will, I hope, die out. IAP is highly unlikely to be one of them, because it is a great model that speaks to a service ethos of gaming.

But by all means shout and scream about how evil it is. I'm not sure it will change anything because, as Robin said, consumer expectations have shifted.
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I couldn't agree more with Rob, unfortunately. The paid game market has been in slow decline since 2010 and as long as the great majority of the industry (and its money) backed F2P that descent was predictable and inexorable. As mobile device sales grew, each premium smash success sold not more than the last but less. Over time free games as a model has devoured everything. Cut The Rope and Angry Birds were not the beginning of a trend but the zenith of it. In 2012 it was arguably past its prime but when we released The Room, topping the paid charts at least meant top ten grossing in a few countries. By the time we released The Room Two in December 2013 we were #1 in paid charts everywhere yet barely cracked the top 100 grossing anywhere. With The Room Three our considered view is that if we can equal the sales of The Room Two that's actually a definitive victory as we are swimming way the fuck uphill. So I always raised an eyebrow when I heard stories of premium coming back as a force. Even as we would like it to happen we never saw any evidence of it. I think where Fireproof may diverge from most is we also raise an eyebrow to claims that current F2P games are mobile gaming perfected, that there is no room for anything other than what we already know, or that F2P designs do not have serious issues to overcome in the future.

This is not to say premium games can't sell, don't sell, don't suit the platform or hardware, or even that a revival isn't possible - in theory the platform remains perfect for videogames of many stripes. At Fireproof we've been beneficiaries of this 'declining' market years after it was supposed to be dead. But when you look at the sum total of what gaming has become on mobile - free games everywhere, the app stores as gaming portals, the focus on comically similar designs (and of a 'snacking' nature) & all industry money chasing F2P - mobile is unsuited to premium games to the point of hostility. I'd disagree with some who say the dominance of F2P is purely down to audience taste, the "we only responded to market demands" line, mainly because I've seen with my own eyes nearly every branch and limb of our industry pick up its skirts and run hell for leather after Candy Crush and Clash of Clans. No hidden hand was necessary, this was a stampede. Forget the charming yarn about being governed by the whims of our audience, nothing gets this industry off the couch and spending like the success of our peers. The 90's / 2000's were dominated by cloned MMO's and FPS's because of World Of Warcraft and Call Of Duty, not because we took a player survey. If we had, we would have learned that nobody wanted to play anything except WoW and CoD. Nothing has changed since then. Four years in Clash Of Clans remains No.1 just like fifteen years later Call Of Duty remains the best selling FPS, though we keep remaking games in their image in case players wake up confused one day and accidentally switch. Definitions of insanity aside, students of history we are not.

Mobile as a platform remains flexible and as the winds inevitably change, it remains capable of supporting whatever tastes our developers or audience requires. Where the market is at now is real, it should be reckoned with but it's not fixed. We'd do well to remember it's always changing and always open to change, and that sometimes trends come in waves, crashing all before them. So to assume what's dominant now is the way of the future is dangerous. In fact I think F2P will learn much more from premium games in the near future than the other way around and hope to see the barriers between the two disappear. Certainly after five years we need to stop babying mobile gamers and start opening them to newer ideas and worlds. To assume that market tastes cannot be changed by the actions of developers is also false - you may hate hearing about Markus Persson but if you shoot him into space rather than deal with what he has achieved you're living in a world built on matchstick foundations. Nobody should ever say 'do this and you will be Notch' but to carry yourself as if he never existed is to shut yourself off from a huge and tangible piece of evidence of what works. By all means ignore it but accept you are now an ideologue. To focus on the extent of his cash pile is utterly wrong, pay attention instead to the path he trod to make it - it was well worn then and is furiously busy to this day. There are many small developers doing very well for choosing to not make F2P or casual or otherwise marketing-driven games. As long as the PC, console and indie markets exist, interesting paid games (and F2P hybrids) will keep being released even when there's no money in it. As long as a trickle exists, a future tidal wave is possible. And as long as Clash Of Clans remains on top of the hill, I'd scan the horizon for black swans.
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Klaus Preisinger Freelance Writing 3 years ago
I agree that there is more to f2p than the casino model. At the same time, a f2p game needs more mechanisms in place than your average $60 game. Let's remove marketing and IP from the equation, since every game can go that route. A good game selling for $60, just needs to be that, a good game. The same good game handed out for free needs a little bit more than a tip jar to make its sales. This very article calls the single unlock strategy "free-to-play in a naive, ill-considered way". Which lesson does that leave us with? If we are honest, that means coercion, subterfuge and manipulation.

I am the first to admit that those words sound too strong, but in the end, the successful f2p will have watered them down and repackaged them into a mechanism that turns players into (hopefully) happy customers. The strategies have become plentiful.

There are free characters that combine best with purchasable ones. There are loot systems designed to frustrate until you relieve loot stress by just buying some guaranteed loot in the shop. There are microtransactions specifically for those who pray at the altar of efficiency and seek to optimize it at all costs. There are resources limiting the amount you can play in one session. And somewhere in there is also your lottery ticket, your casino, your random card booster pack or whatever.

On the bright side, none of those things have to be implemented in such a way that they make a good game turn bad. A f2p game can have all of those and still be good. At the same time, a good $60 does not need to waste one thought on all these additional mechanisms required for f2p cash flow. Sure, season pass, DLC and what have you are also seeping in and the borders are starting to get rather blurry (Ultimate Team anyone?). But ideologically speaking, the full price game has less concerns.

Finally, why don't we blame Apple's metrics? They list everything by the amount of money it made this month, or how many sales it achieved. Why not list apps by the amount of time people spent with them? That way, a good game does not need high prices or high sales to enjoy the boost of the top shop position. All it needs is be a lot of fun for a long time. Raptr and Steam list games in that fashion. They do not tell the story of f2p having won. They tell the story of good games winning no matter their business model.
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Nathan Richardsson Executive Producer 3 years ago
I wish F2P actually meant "Fun to Play" and that the criteria of success wasn't solely based on gross revenue, and therefore a hybrid of a business model is determined to be a winner here. I find success to be ample when I've more than enough to feed my family and I can make a living, with other families on my team, doing what I love - and that other love (our games).

You know, like because the future of all entertainment will be determined by their business model, not whether it's actual entertainment people feel compelled to and happy to pay for. Because everybody knows we watch House of Cards on Netflix because of their business model, and not because we find it an ok show and their value proposition, on top of just House of Cards is compelling.

So I'd rather say "free to play" is long dead. Everything you see out there is using hybrid business models that are optimized to cater to an audience and certain experience. The fact that you don't need to pay for the first fix is a pretty ancient "business model" and deciding afterwards how and what to pay for isn't new either. And I don't just mean drugs, I mean, you can call 1996 and ask them about how free trials and shareware works ;)

And to quote some dude;
There is no such thing as a free lunch
Unless I missed something and the top 10 grossing games are actually charity institutions what want to make a better fun world.

Edited 1 times. Last edit by Nathan Richardsson on 15th December 2015 8:24pm

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Florian Dhesse Producer, Crytek3 years ago
Great article Rob, thanks. It's worth noting that Tencent is also a very prolific publisher, when compared to other big companies. As of today, Tencent has 31 games placed in the China top 100. I can't think of another publisher that releases so many games so quickly and so successfully. Their dominance is greatly helped by their social app WeChat from which most Chinese players discover games nowadays.
I agree that F2P has clearly won the mobile top charts, and apparently the revenue ranking across any game company. I don't think there is a war to be won, just the right to exist in a diversified market. Clearly F2P has proven that it's here to stay.
I only heard young F2P studios talk so much about the top charts and their strategy to get there. They tend to use a lot of buzz words that attract VC. Meanwhile, young premium studios talk about making fun games and may mention that they hope to earn a decent revenue. I don't think any new premium studio starts with the goal to overthrow EA.
So certainly if you dream to make millions every day, you should pick the F2P model. That's the battle that the F2P model has won over the Premium model. I know a lot of people who dream this way. That's fortunately not the only dream available.
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Robin Clarke Producer, AppyNation Ltd3 years ago

I think premium mobile games will stick around (if vinyl can make a comeback, who knows ;), but I agree that it won't get any easier.

Current F2P designs are definitely a transitional form. Already we're seeing designs that offer real gameplay depth having the most staying power - the handful of whale-chasing games parked at the top of the grossing chart distract from the steady successes.

I do think that whatever developer-led new idea(s) reshapes mobile games in the next few years, players won't be paying for them up front. While there's plenty to criticise about lazy and exploitative uses F2P has been put to in some quarters, it's simply not credibly arguable that it's not a better distribution model.
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@Robin yep, the best thing that can happen is that F2P stops being a 'genre' and starts being the payment model for a million ideas like it's supposed to be. Dodgy monetisation is an issue but to me the F2P 'debate' has always been more about the amazingly narrow spread of games the industry backs on mobile. We just can't stop ourselves copying the top games, though getting around that will take some work. If more developers are able to take risks with a free model, the paid vs. premium debate disappears as an issue.
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