Freemium games raking in big bucks for companies

What's the Deal? with Conor Knighton

Temple Run 2, released earlier this year, is the fastest downloaded mobile game in history.  The game is free, but that the genius of it and other games like Temple Run. They're "freemium" games.  Free to download, but full of ways to charge you more money inside the game.

Draw Something is free.  But it's hard to draw some things with only 5 colors.  Want more colors?  It's going to cost you.

The top grossing app in the iPhone app store is Clash of Clans -- which is free.  All of their money comes from in-game purchases such as upgrades that make the game more fun or customizable. As a matter of fact, most of the top grossing apps are free. People are buying extra moves, extra lives and unlocking new episodes.

Later this month, when Real Racing 3 hits the US app store, it will be free to play.  For an iPhone app, this is a big budget game, and yet developers are giving it away, knowing they can make more money in the long term.

Not everyone is thrilled with the switch.  Some loyal fans would rather cough up the cash up front rather than be constantly pestered for money to actually enjoy the game to the fullest. But based on the success of freemium games, you're going to be seeing a lot more of them. 

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