Apple Maintains Its Edge Over Android With Plants vs. Zombies 2

Electronic Arts (NASDAQ: EA  ) has finally released the long-awaited sequel to the indie smash hit, Plants vs. Zombies.

The sequel, Plants vs. Zombies 2, was released on Apple's (NASDAQ: AAPL  ) iOS last week, and already, it has risen to become the top free app in the store, beating out Candy Crush.

With the sequel, EA has embraced a free-to-play model, and this decision could reap rewards for the struggling video game publisher.

But more importantly, it serves as a potent reminder as to why Apple's mobile operating system is still number one.

Making money from free games

If you've never played Plants vs. Zombies, you've been missing out. There's no shortage of tower defense games on mobile platforms, but Plants vs. Zombies stands above the rest as the king of its genre.

The first game was a hit for its developer, PopCap games, which was subsequently acquired by EA for over $1 billion.

That bet could pay off.

The fact that the game has managed to shoot up the app charts, and earn nearly universally positive reviews, says a lot.

As someone who has played both games, I can say that the sequel has kept the core components that made the original game so successful, while adding new twists.

But the biggest twist is an entirely different business model.

The first game carried an up-front cost. Pay X dollars, and you can have the whole game. But the sequel is free. Anyone can download it and play for dozens of hours without forking over a single dollar.

But if you're an addict, you're free to spend your money buying upgrades.

This is the same model that's been used so successful in games like Candy Crush, which is currently the top grossing iOS game. By some estimates, it brings in over $600,000 per day from US players alone (over $200 million per year).

By forgoing an upfront cost, and instead encouraging in-app purchases, games like Plants vs. Zombies 2 should actually see more success than their for-cost competitors.

And for EA, it could just be the beginning. The company has already planned a console spinoff, not to mention the revenue it could bring in from licensed toys (the purchase of which it encourages in-game).

Apple's declining market share

Some investors may have watched in horror as Apple's share of the mobile operating system market declined.

Google's (NASDAQ: GOOGL  ) Android has taken the world by storm, and now accounts for 80% and 60%, respectively, of the smartphones and tablets sold.

But although Android still dominates when it comes to market share, it continues to lag in apps. For the most part, successful iOS apps make it to Android -- eventually. But would be owners of Android phones and tablets have to accept the fact that they'll have to wait for the best the app community has to offer.

No doubt EA will eventually port Plants vs. Zombies 2 to Android. But for now, the game is only available for Apple's iOS, and it might stay that way for quite some time. EA has yet to set a definitive release date for the Android version of the game.

Google knows it needs to catch up in game development

But what's a stupid video game? Certainly, a game shouldn't influence a person's decision to purchase a mobile device.

If you think that, you'd be wrong. Playing games takes up a large percentage of the time people spend on mobile devices—as much as 43%, according to a study done by Business Insider.

Google understands that, while it might have market share dominance, it still lags when it comes to app development. If Android is really going to crush iOS, it will have to become the platform of choice for developers.

At Google's I/O Conference in May, it did much to make Android development easier, including announcing Android Studio, a mobile development environment with helpful tools.

It also encouraged greater Android game development. Google has enhanced its Game Center with new features to support online and cross-platform play.

What a game about plants and zombies means to investors

At first glance, a game about cartoon plants and zombies might not seem like a major investment catalyst.

However, the game is already showing signs of becoming the next great mobile hit. If it takes off, could provide a boost to EA, bringing in hundreds of millions in revenue and establishing a valuable intellectual property -- a key source for future EA earnings.

But Plants vs. Zombies 2 is important to the entire mobile space. By electing to make iOS the first (and for now, only) platform to receive the game, EA has shown that when it comes to app development, Apple's mobile operating system is still dominant.

Although Google's Android has far surpassed Android in terms of market share, the search giant still has work to do in selling developers on making its platform the preferred choice.

If, many years from now, Plants vs. Zombies 3 is an Android exclusive, Apple investors should hope they're long gone. But until then, all is fine for the Cupertino tech giant.

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 21, 2013, at 12:05 PM, speculawyer wrote:

    I HATE these games that nickel and dime you. I'd rather just buy the game and get rid of these pay-for-upgrades. How do you let your kid play without them racking up a bill that surprises you!

  • Report this Comment On August 21, 2013, at 1:12 PM, Junkyfour wrote:

    Apple continues to obtain these exclusives yet Android continues to significantly increase its market share. So why is this important? Of course Apple and EA will make buckets of cash but I cannot imagine someone in an emerging market deciding to pay 500 dollars for a phone just to play PV2. They'll fork over 200 dollars for an Android phone. Now imagine how much more cash EA would make if PV2 were available for Android. My guess is Apple paid for exclusivity which is something it can do all day every day.

  • Report this Comment On August 21, 2013, at 3:51 PM, deasystems wrote:

    @Junkyfour: It obviously does not work that way: Android phones are the new feature phones—the default phones, the buy-one-get-one-free phones. That is the sole reason for their market share. People that buy Android phones are not interested in apps, especially not apps that cost money to use…

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