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Xbox 360: Freemium games' next frontier?

Freemium games are all the rage in the mobile space right now, but according to some stakeholders, the Xbox 360 might be their next destination.


The world of mobile gaming and console gaming might soon converge on one area of the market: freemium games.

Speaking to VentureBeat in an interview published today, Todd Harris, chief operating officer of online-game developer Hi-Rez Studios, said that although consoles have by and large failed to deliver free-to-play games, his company is currently in talks with Sony and Microsoft "about how best to support free-to-play on consoles."

Freemium games have become all the rage in the mobile-gaming space. Just yesterday, research firm NPD released a study finding that 40 percent of those who downloaded an upgradable freemium game have made an in-game purchase. That followed a study from research firm IHS in January, which found that in-app sales reached $970 million last year and could grow to $5.6 billion by 2015.

"In 2012, it will become increasingly difficult for app stores and developers to justify charging an up-front fee for their products when faced with competition from a plethora of free content," said Jack Kent, an analyst at IHS. "Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases."

Although console games have historically come at a cost, and then customers can buy digital upgrades for an additional fee, Harris told VentureBeat in the interview that the freemium model makes sense for the Xbox 360 too, since it allows consumers to "choose how much they want to pay."

It's not immediately clear how freemium games might be implemented on consoles. Standard big-name titles cost far too much for developers to justify giving them away with the eventual hope of making some cash at a later date. And on the digital side, it might be difficult for developers to change tactics, when it seems that Xbox Live Arcade games are performing relatively well with their pay-to-play model.

Microsoft did not immediately respond to CNET's request for comment on the VentureBeat report.