Facebook Paid Apps: Will It Have An Effect On The Social App Economy?
You may recall yesterday’s announcement of the Facebook App Center. For lack of a better definition, it is essentially Facebook’s own app store. The only real difference is that it will cater to mobile apps that are integrated with Facebook’s Open Graph software. There was a little nugget tucked away at the end of the post that Facebook really didn’t spend much time on though – paid apps.
According to the original post, Facebook says that paid apps is just another way to support more types of apps. If you’ve been through the current crop of Facebook apps, they all support themselves through in-app purchases. It’s been a wildly successful business model that has helped jumpstart the growth of giants like Zynga. The question now is whether or not paid apps on Facebook have the potential to revolutionize social app growth that in-app purchases also had.
We first went straight to the source to ask what brought about the new option in app delivery. Facebook told WebProNews pretty much the same thing that the original post told us. They said that it’s “another option for developers who are interested in growing their business in that way.” This now makes the question whether or not paid apps could do as well as free apps that are supported by in-app purchases.
For the purpose of this article, let’s keep the focus strictly on games. Facebook games are the apps that push in-app purchases the most and are the most likely to go paid once Facebook starts offering the option with the App Center. If you look at the top ten free apps on both iTunes and Google Play, the majority of them are regular apps like Instagram, Facebook and Google Maps with some dinky games thrown in. The paid apps paint a picture of higher quality apps with games leading the quality charge.
Now, what’s to stop developers from going the paid app route with their games once they hit the App Center? Sure, there might be more money coming from in-app purchases, but what happens when games start to become more sophisticated? Even though more and more people are accessing Facebook via mobile devices, there are still a lot of users using Facebook on desktops to play games. Create games that leverage the power of the desktop using either Flash or HTML5. If there’s one thing that people like more than simple, mind-numbing entertainment, it’s graphics. Create a beautiful Web-powered game for Facebook and people will flock to it.
If this proves to be popular among Facebook players, developers can start introducing more traditional models of monetization. Imagine a paid app that goes for $4.99, but then supplements the experience with DLC that can be paid for as in-app purchases. Create an RPG and add new areas to the game at a later date for a small fee. It has the potential to bring traditional games to Facebook and increase the audience for Facebook games.
I’m not going to argue against free – free is good. I would like to think, however, that people understand the value of the work that goes into a game. That’s why the majority of the top ten paid apps on both major mobile platforms are games. They’re not only good games, but they also push represent the best of what you can do with the platform. Now imagine that on Facebook, but with something on the level of say Skyrim where players can become totally immersed in rich single-player fiction while keeping the social spirit of games alive.
While I may lament the downsizing of traditional retail gaming markets in favor of social and mobile games, I think Facebook now has the power to really shake things up. With the addition of paid apps, it might encourage more developers to bring sophisticated experiences to the platform. I like to think that a paid app instills confidence in a user that the game they are about to experience is of higher quality than the free-to-play games that make their money through in-app purchases.
The final piece of this puzzle all comes down to Facebook though. Currently, they take a 30 percent cut of all in-app purchases through the use of Facebook credits. The company never clarified if paid apps purchased through the App Center will also require Facebook Credits, but I’m willing to guess that they will. Now, will Facebook still take that much of a cut or will they lower the cut they take, at least initially, to draw interest?
The fact of the matter is that nobody knows anything yet. The App Center is still weeks away and we don’t know when Facebook will even start offering paid apps. Facebook said that developers can sign up for a beta, but the sign-up page just asks for a description and a picture of the app’s home page. It tells us nothing in regards to when paid apps will be available. It’s safe to assume that App Center will service only free-to-play at its launch which means paid apps will have quite the hill to climb.
Regardless, paid apps can always compete with free if the value is apparent. People are willing to pay for something if they feel that the product is worth it. I think that Facebook gaming, and Facebook apps in general, are about to get far more exciting when paid apps are introduced. Beyond just the reputation of an app, quality will be considered when it comes to what is paid and what is not. It could also lead to trial apps which then lead to more features being unlocked once the user goes paid. Offering both free-to-play and paid apps drives up the quality across the board.
Facebook just has to cultivate this quality before they are overcome by the likes of Google+ games or any platform that may rise up to take on the veritable master of social gaming in the near future.
Do you think paid apps on Facebook are going to have a major effect on the app economy? Will game and other apps’ quality start to increase once they have to compete with paid apps? Let us know in the comments.