Google Checkout limited mechanisms of adding funds and its impact on monetizing freemium Android games
Mobile analytics firm Flurry has an interesting chart showing the rise of freemium games and its impact on the list of Top Grossing Games.
According to them, at the end of June 2011 65% of the revenue generated by the Top 100 Grossing games in the US App Store were freemium games. This is in large part due to Apple having access to over 200 million credit card on file. Apple also makes it convoluted to activate an iOS device without providing a credit card. There is also the ability to buy iTunes gift cards as well as link the iTunes account with Paypal
Compare this to the Android Market where Google provides in-app billing service via Google Checkout. Android usage is booming and activation requires a Google account. However there is no need to create or associate a Google Checkout account during activation.
Also, prior to it use for Android Market the only reason one would have funds in a Google Checkout account would be to pay for extra storage for Gmail or Picasa or buy a premium plan for Google Apps. That’s a fraction of the Android userbase.
If freemium gaming is going to be one of the big drivers for increased Android apps and particularly ports from iOS thereby increasing usage of Google Checkout then it becomes very important to have lots of mechanisms to add funds to Google Checkout in a relatively frictionless manner.
Facebook has spent a lot of effort partnering with alternative top-up mechanisms and now Facebook Credit pre-paid cards are available in a ton of places particularly in South East Asia where credit card penetration is very low and there are established infrastructure for topping up funds to use for micro-transaction payment. Carrier billing is very expensive and this can easily be seen when buying Facebook Credits which cost 3x as much via mobile payments compared to walking to the neighbourhood shop and buying a scratch card.