Freemium is a business model that offers the possibility to use a free version of the software that contains basic functionality or a paid version with extended features.
Freemium has evolved and this turned into the appearance of some of its types:
- paying for one product leads to receiving the second one for free;
- receiving a product for free but together with advertisements because the service depends on advertisements;
- receiving a product for free and a company that offers it receives an income from premium products;
- using a free product but a user needs to provide services such as intellectual property.
This model is widely used by game developers as a method to receive an income.
- free games with a feature to buy something using it. This purchase encourages users to continue using a game. An example of such a game is Candy Crush;
- using a free version of a game with limited functionality. A paid version needs an additional payment. Primary versions of the App Store that changed it to the In-App functionality represent this type.
Freemium-based products mostly provide their users with limited functionality and features and this encourages them to purchase something.
The Freemium model helps engage numerous users, estimate the popularity of the suggested products, and identify users who wish to use paid versions of a product or a game.