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Virtual Economy, Real Money
CNBC.com | March 08, 2012 | 03:19 PM EST

While it seems counterintuitive, the hottest trend in the video game industry is giving away games for free, then offering a deeper-level of interaction — for a fee.

Whether it's new titles, like "Smurfs' Village" on iPhone or old standards like "EverQuest," publishers are in a race to offer free-to-play games — sometimes known as "freemium" games — and in many cases, it's making them a fortune.

By offering well-known games — or new titles (generally featuring popular franchises) for free, publishers are tapping into people's bargain-hunting nature. And in fishing for those new players, they often find a whale.

A recent survey by Park Associates found that while only 5 to 10 percent of the player base of social and free-to-play games regularly pays out of pocket, those who do pay are generous. The average Facebook gamer who spends money on games spends about $29 per month, according to the report. And those who pay for virtual goods and upgrades in free-to-play games average about $21 per month.

And that adds up quickly when your player base is in the millions.

One area where free-to-play has seen tremendous success is on Apple'siPhone.

Capcom's "Smurfs' Village" and "Snoopy's Street Fair" have had a regular presence on Apple's list of the top grossing apps since their release. ("Smurfs' Village," released in 2012, still holds the sixth spot.)

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