Free-to-play games dominating paid games in the App Store

According to a report published today by Flurry, an independent analytics company, free-to-play games are now bringing in more revenue than traditional paid games. Free-to-play games require no up-front fees to play, you can simply download the game and start playing immediately. Paid games require the app to be purchased from the App Store for a minimum of $0.99 each.

In January of 2011, 61% of the revenue from the top 100 highest grossing games in the App Store came from paid apps. This number has now dropped to only 35%, with the other 65% coming from free-to-play titles like Smurf Village or Tap Zoo. It would appear that all forms of gaming are quickly trending to the freemium model, a business model that has proven successful for many developers including PopCap Games (who release free versions of all of their casual games). Facebook games have been using the free-to-play model exclusively, including the titan Zynga who reported over 90 million dollars in profit in 2010. Traditional games have been trending in this direction for years, despite hardcore gamers' best efforts to push back.

Free-to-play games feel like a win for everyone. Those who want to play without paying can do so, and those who want to pay have no theoretical cap on how much they can spend. It feels like a no-brainer to launch games as free-to-play on the App Store and Android Market.

What would inspire you to pay for goods inside a free-to-play game? Would you prefer a one time up-front fee?