There has been quite some discussion (on our blog as well) about business models that work for app developers and the influence that In-App Purchase for free iPhone apps may have on these. Ever since Apple made this functionality available, not much has really happened or at least we haven’t heard of a major breakthrough so far. This might change with ngmoco and its recent release of Eliminate Pro.

ngmoco offers the program for free and asks the user to pay for additional ”power cells”, which can be used to power your battle suit. The price range? $0.99 to $39.99, depending on the amount of “power cells” you’re buying. The ratio behind this? Get the free version out to as many people as possible and then have them pay for additional goods they need to advance (more quickly) in the game – and when they are most prone to buy. This may lead to only a small percentage of players or buyers of the game to be responsible for the bulk of the revenues made from the game, but it seems clear that for games this model will probably work very well, as games have a way of getting people hooked on them, leading to impulse buying.

Time will show if this is the way to go for ngmoco and gaming apps in general, but the more interesting question to us is, if will this work for the bulk of overall apps. If only a small percentage of users buys and drives revenues, can this also work for, let’s say a cooking app, a running app or a language app? The good news is that in general niches will have the potential for high revenues, if a group of core users is willing to pay for a service. The challenge with these other apps then lies in providing the user with a basic version and on top of that finding something that can be charged for and that really enhances the functionality of the particular app. In our opinion, this will need a lot of creativity and probably just won’t work in every category and every app. What do you think?