The fall of Angry Birds

The fall of Angry Birds

Last year I held a special webinar with an in-depth analysis of Angry Birds VS Tap Pet Hotel and how premium .99 games were going to be overtaken by free to play games.  That sounds obvious now, but remember, this was 12 months ago and at the time I held the webinar Tap Pet Hotel was only a few months old.  Many people on the webinar didn’t really know how social games worked.

So far the the app store has gone through two phases.  The second phase completely took over about 6 months ago.

Phase 1 of app store monetization was Premium games (.99 titles)

Phase 2 is “Free to play” and it’s RULING the app store.

Phase 2 of the App Store:  The fall of angry birds

Angry Birds currently doesn’t have ANY of it’s games in the top 50 grossing iPhone charts.  The closest is the original title at #52:

iPad is a similar story.  Right now the highest grossing Angry Birds game is sitting in the #55 top grossing position:

What’s interesting about the iPad version, is it’s currently NUMBER 2 in the paid charts:

If the #2 best selling paid iPad game is not in the top 50 grossing, then what type of apps are currently dominating the app store in terms of profits?

As you probably guessed, free to play:

Now, I knew free to play games were dominating the scene before I started this post, but I did not know it was THIS bad.

Right now, 18 of the top 25 grossing of all apps are Free To Play Games (72%).  Also, it should be noted that 22 of the 25 top grossing apps are in the games category (88%), confirming the fact you need to be into games if you want to have the biggest potential payout.  The reason for this is people have a stronger emotional attachment to games than any other type of app, therefore they are more likely to spend money.

How are these Free to Play games crushing it?

After digging deeper in these top grossing apps, you can see they consist of nearly every free to play genre there is… Social games, click games, gambling games, turn based games, card games, etc but all of these have TWO things in common:  They each have lots of in app purchases and they encourage the user to buy stuff (a call to action).

This is the basics, but it’s SUPER IMPORTANT, here’s how:

A very small percentage of people buy stuff in games.  Of this small percentage you have people who will spend a LOT.  These are your die hard fans. I know, because I am one of them and won’t bat an eye spending $50 in a game I like.

Now, in Animal Mall for example, our call to action is very simple.  When a user tries to buy something and they are out of money, we simply say “You don’t have enough coins for that, would you like to buy some?”.  We do the same in every game we have.  I’ve tested this and it increases revenue a TON.

I recently read an interesting game development article that got me thinking about writing this post.  It was about a game called Gasketball that was from the same two man indie studio that made Solipskier, which was a pretty big hit.

They discuss how this new game bombed and even attempt to blame free to play games which the developer later retracted, saying he was upset at the time of interview.  After reading the article I immediately knew what went wrong:

1. They had limited in app purchase options

2. They didn’t have a call to action

They literally had friends trying to support the game and didn’t know how.  Also, they didn’t have mass in app purchases, just a few including one to unlock the game.  This is a bad in app purchase that has no emotional attachment and doesn’t give the player something to strive for.  I could go on about this forever, but basically you either want an in app purchase to solve some curiosity for the player or benefit gameplay.  Boring in app purchases like “full game” or “remove ads” are not as effective.

Let’s discuss more proof that multiple in app purchases increase revenue:

Remember above when I showed that Angry Birds was #52 grossing in the iphone app store?  Remember, that was the ORIGINAL version of Angry Birds.  If you look at the top paid charts, you’ll see Angry Birds SPACE is ranked higher than Angry Birds ORIGINAL… if that’s the case, then why is the original making more money?

Yup, they recently added a ton of in app purchase options:

It’s pretty simple really… the more options you give your customers to purchase things the more money you will make.

This is because there are only a small percentage of users out there who spend money in games (like me).  Even though the percentage is small, typically those customers are interested in spending a LOT if they like the game (again, like myself).

Of course, this only works if you provide VALUE and things they are interested.

How much are these games making?

Let’s talk about how much money some of these games are making at the top.  On last years “NDA Webinar” I figured out it was about $2,000,000 – $3,000,000 a month.  Well, let’s just say the landscape is vastly changing with extreme speed.

CSR Racing (currently ranked #9 on the grossing charts) just released some data on their top grossing numbers.

In the last month, this single game generated over $12,000,000 on iOS alone.  They have not ported the game to Android yet.

That is $400,000 PER DAY and they aren’t even in the top spot anymore.  Pretty awesome.

Now let’s take an app that has done even better, Dragon Vale.

In the past 3 months, it has not dipped below TOP 5 grossing a single time on the iPhone or iPad.  This is outperforming CSR racing, but let’s say it’s making $300,000 per day on the safe side.  25% less than CSR claimed with lower rankings.

If this is the case and it holds ranking for the rest of the year, then this single game is worth $109,500,000 PER YEAR on the low side.

Amazing.  Hat’s off backflip studios, it’s a great game that innovated with theme and design instead of copying everyone else which is common in the marketplace.

Does this mean that paid premium games are DEAD?!

No, not at all.  We are releasing Milo and the Shadow as a paid game in a couple months.  I do think trying to compete in the market without in app purchases will be tough, but there will be many independent developers able to gain traction and break the top 25 charts now that bigger developers are focused on free to play.

In closing, that leads us to one final question… what is Phase 3?

I’ll write more on this later, but I think this will be the phase when we start seeing games go TRULY social with increasingly awesome online abilities.  It always bugged me the first wave of free to play facebook and mobile games called themselves “social” as there was not much social communication going on.  I think we’ll see a big shift in this and we’re already planning changes for future projects.

Thanks for reading and take care,

Trey Smith

P.S. – I would also like to clarify that I don’t think the Angry Birds brand is going to die out.  I am sure they will be around for ages and have many different games, merchandise and all sorts of crazy things.  The point of this post is show how Free To Play has taken over the once “king of grossing” and changed the landscape dramatically.



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