How EA is jumping on the 'freemium' bandwagon

Electronic Arts, best known in the mobile world for its stable of premium franchises such as "Madden NFL" or "Need For Speed," is increasingly trying its hand at free games.

The company is offering four games for free in the Apple App Store right now, but plans to expand that number to between 10 and 14 by March, an EA executive told me. Rather than an upfront payment, it's looking to generate revenue through in-app purchases.

The shift in strategy is emblematic of the growing trend of "freemium" games, which are free to download and play, but then require players to pay extra for upgrades such as new levels, more energy, better weapons, and other enhancements. It's interesting to see EA, which is dominant in mobile with by far the largest market share, play follower when it comes to this trend.

"Freemium is the future of where mobile gaming is going," Barry Cottle, executive vice president and general manager of EA Interactive, which deals with online, social and mobile gaming, said in an interview.

But Cottle told me he's a big believer in the freemium model, and as a reluctant buyer of apps, I have to agree. I'm continually surprised at how many people are willing to pay for that extra power-up or gun--yet it happens all the time.

Cottle said the market for mobile games now consists of three major categories: free, 99 cents, and anything above that. "Need For Speed: Hot Pursuit," for instance, costs $4.99, while simple games such as Tetris costs 99 cents.

The company is working on a freemium version of its hit "Battlefield" franchise, although Cottle said the game wouldn't work like the traditional first-person shooter version on consoles and the PC. He said that EA plans to make more freemium games that work as an offshoot of well-established franchises. Unfortunately (for me and gamers all around), games such as Madden NFL 12 will still command their premium pricing.

EA has a bit of an advantage when it comes to the developer game. Given its breadth, the company has little trouble providing exposure to new games. The company has a strong partnership with Apple, and uses its existing network of games to promote original titles. Cottle said EA's acquisition of PopCap will pay off in original intellectual property. He called the company "the Pixar of the casual gaming space."

EA hopes to have a balance of freemium versus pay games, Cottle said. The market is currently split with 60 percent pay and 40 percent freemium, and he said the company would invest according to where the market goes.

"It's about getting a huge audience," Cottle said.