While it is no secret that gaming apps for mobile devices are popular, the business models used by them vary and recently one of the most popular models has taken a hit. One of the more popular business models is a freemium game, where the basic game is free but then there are purchase options available. The most popular Zynga games, Farmville and Cityville, are examples of this business model. Freemium games also draw in money by using ad servers to render small ads in a non-obtrusive manner. This is why the social media agency needs to take note of the recent court happenings concerning freemium games.
A San Jose court recently denied a motion to dismiss a class action suit against Apple. Children are playing some of these games and then making purchases in the Apple Store which later sends parents the bill. What is at issue is how the Apple Store functions for its purchases. Instead of changing the Apple Store’s mechanics Apple is instead taking the fight to the courts and is, so far, losing.
If the courts hamstring the business model, then it could go either way for the
social media agency. Apps will rely more and more on advertising or move to a user purchase model. The overall change, however, might be a drop in the number of games being developed because of the apparent superiority of the freemium model. The industry might keep up with a slackening of new projects in development, but there will be less diversity for digital advertisers to work with.