Free, ad-supported games are killing 'try-buy' model

The days of the "try-buy" gaming model are limited thanks to the onslaught of free and ad-supported mobile gaming apps available.

In the old days, most cost-free games, especially those available on cell phones and PCs, were only free for a few levels of gameplay. After those levels were completed, users would be prompted to pay up to continue playing. Essentially, the developers are relying on the hope that the gamer will be enticed enough to purchase the full game.

That try-and-buy scheme has been outplayed by newer ad-supported games, which produce three to seven times more in revenue.

According to research conducted by Exent, owner of FreeRideGames.com:

...While traditional purchase pricing was historically the strongest, it is no longer the case. Large distributors began to exert strong downward pressure on pricing in an attempt to grow their market share, and as a result, publisher's revenues have suffered. Average prices for new games fell from $20 in 2005 to an average price today of below $7.

Since only a small fraction of users actually choose to upgrade from the free trial to purchase, try-buy has been declining as a revenue engine for the casual games market.

It's not hard to understand that this is the new truth for PC and mobile phone gaming. Just look at iTunes and the Android Market. Only a few gaming apps repeatedly reach the tops of the Paid Apps charts. (See: Angry Birds.)

But there are already thousands of games available on the ad-supported business model on smartphones and Facebook. Consumers are already inundated with ads so much these days, it's become normal and almost easy to ignore. Thus, if the only way to get a free game is deal with a few advertisements, it doesn't sound like much of a problem.