On Monday, ngmoco released worldwide its latest game for the iPhone and iPod Touch: Eliminate Pro. It’s been downloaded 500,000 times so far at a rate of about 25,000 an hour, currently making it the top free app in iTunes. The top paid app, Skeeball, also happens to be affiliated with ngmoco through its Plus+ social game network. ngmoco has had it’s own top paid apps as well, like Rolando, but CEO Neil Young says that Eliminate Pro is more “representive of where we have been moving our business—free applications, that we monetize with in-app purchases.”
Ever since Apple opened up in-app purchases for free apps two weeks ago, it’s been catching on. In general, free apps are downloaded 10 to 20 times as much as comparable paid apps. Now, says Young, the payments can be “built into the compulsion loop of the game.” In other words, developers will get consumers to try their apps and then ask them to pay only once they are hooked.
This model works particularly well for games. Eliminate Pro easily could have been a paid app for which ngmoco could have charged $7.99 or $9.99. It is the first multiplayer first-person-shooter for the iphone. You play against other people on their iPhones around the world, and can connect to the server-based game via WiFi or the 3G cellular data network.
In order to advance or level up, your battle suit needs to be powered, and you need to buy power cells to charge up your suit. Power cells are the currency of the game. The game comes with 30 free power cells, and then you can buy them in increments going from $0.99 to $39.99. You can still play the game without buying power cells, and your suit gets trickle-charged, but some people are really impatient and they’d rather pay to play.
It only takes a small percentage of hardcore gamers who opt to pay for their power-ups to exceed the revenues ngmoco could have made with an all-paid app being bought by fewer people. Ngmoco has three more games it is planning to release before Christmas, and they will all follow the same freemium model. “We think at the end of the day this is the best way to build a big business on the iPhone,” says Young.
Both Eliminate and Skeeball are also part of ngmoco’s Plus+ social gaming network, which allows players to send out game challenges to their friends via push notifications on the iPhone 9the most effective method), as well as Facebook and Twitter. Add the multiplayer aspect to Eliminate, and what we’ve got here is a realtime game on the iPhone. No wonder it’s so popular.
Ngmoco is part of Kleiner Perkins’ iFund portfolio of iPhone startups. The company also announced today that back in July it acquired another iPhone game developer, Miraphonic, creator of the Epic Pet Wars game.
If you spend more than $10 on power cells, you’re doing it wrong.
In-App purchases will make it so that there is no scammy virtual currency offer business in iPhone apps. Apple is notoriously more restrictive about their policy and won’t let the kind of stuff that erupted in FB/MS land happen in iPhone apps.
RPUs of iPhone applications going up will mean more money for promotion, and then more money for application developers. In which case, Apple figured out the ecosystem properly, whereas FB/MS left a wasteland.
power cells are not considered virtual currency (not allowed with in-app purchases)?
Hmmm.. yeah its a bit strange. Their power cells function exactly as a virtual currency. Apple chose to look the other way in this case? Any other virtual currencies available on the iPhone using in app purchases you guys know of?
Yeah there is papaya pro 3. They explicitly state in their app description you can use in app purchases to buy the virtual currency papaya’s.
I believe the restriction on virtual currency was only noted for in app purchases… What about the apps like zynga poker and imob which create seprate app store sku’s of the exact same app with the only difference being price & # of chips or respect points…
Apple needs to clear this up before it becomes more and more ambiguous.
I guess the real question is whether any apps have been rejected for virtual currency?
Grammar police–really, guys?
“ngmoco has had it’s own top paid apps as well”
wow this game has really become big!
Isn’t it right, that you are loosing your in-app purchases after deleting the app and reinstalling it?
Consider how much is a normal iPhone app is, this game is costing a whole lot more.
Just like how MMORPG charges you.
My god, I REALLY am a gamer/geek.
The picture you chose is the only thing that made me read the (interesting, btw) post!
I didn’t even read the title
i think there will be a huge backlash to this model.
who wants to be nickel and dimed everytime they play a game?
fail.